Why Established Businesses Focus on Key Performance Indicators (KPIs)

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As businesses grow and mature, they begin to prioritize different metrics to measure their success. While startups may focus on revenue growth and customer acquisition, established businesses often turn to Key Performance Indicators (KPIs) to track their progress and make informed decisions. In this article, we will explore what KPIs are, why established businesses focus on them, and some examples of KPIs that businesses use.

What are KPIs?

KPIs are measurable values that demonstrate how effectively a company is achieving its objectives. They are often used to evaluate performance and progress towards specific goals. KPIs can be applied to different aspects of a business, such as marketing, sales, customer service, or operations, and can vary from industry to industry.

KPIs provide a clear picture of a company’s performance over time, which helps managers make data-driven decisions. By tracking KPIs, businesses can identify areas that need improvement, make strategic changes, and measure the impact of those changes. KPIs also help businesses stay focused on their goals and align their efforts towards achieving them.

Why do established businesses focus on KPIs?

Established businesses have already achieved a certain level of success, and their priorities shift towards maintaining and optimizing their operations. KPIs help these businesses identify areas of improvement and measure the effectiveness of their strategies. Here are some reasons why established businesses focus on KPIs:

1. To improve efficiency

Efficiency is crucial for established businesses as they look to optimize their operations and reduce costs. By tracking KPIs, businesses can identify inefficiencies and take steps to improve their processes. For example, a manufacturing company may track KPIs such as production cycle time, defect rates, and inventory turnover to identify areas where they can streamline their operations.

2. To maintain quality

Established businesses often have a reputation for providing high-quality products or services, and maintaining that reputation is essential for their long-term success. KPIs help businesses track their performance against quality standards and identify any areas where quality may be slipping. For example, a software company may track KPIs such as customer satisfaction, bug rates, and response times to ensure that they are delivering high-quality products and services.

3. To measure growth

As businesses grow and expand, they need to track their progress towards achieving their goals. KPIs help businesses measure their growth and identify areas where they need to invest more resources. For example, a retail company may track KPIs such as revenue per square foot, customer retention rate, and new store openings to measure their expansion efforts.

4. To make informed decisions

Data-driven decision-making is essential for established businesses that have complex operations and multiple stakeholders. KPIs provide businesses with the data they need to make informed decisions about where to invest resources, which strategies to pursue, and how to allocate their budget. For example, a marketing department may track KPIs such as cost per lead, conversion rates, and customer lifetime value to determine which campaigns are most effective.

Examples of KPIs used by established businesses

Here are some examples of KPIs that established businesses may use to measure their performance:

  • Customer satisfaction: Measured through surveys, customer reviews, and feedback, customer satisfaction is a critical KPI for businesses that want to maintain a loyal customer base.
  • Employee productivity: This KPI measures the efficiency and output of employees, which is crucial for businesses that want to maximize their workforce’s potential.
  • Sales growth: Measuring sales growth helps businesses identify their most profitable products or services and make strategic decisions about pricing, marketing, and distribution.
  • Cash flow: This KPI measures the amount of cash flowing in and out of a business, which is crucial for maintaining financial stability and making informed decisions about investments and expenses.
  • Website traffic: Measuring website traffic helps businesses evaluate the effectiveness of their digital marketing efforts and identify opportunities to improve their online presence.
  • Inventory turnover: This KPI measures how quickly a business is selling its inventory, which is important for managing cash flow and avoiding excess inventory.
  • Return on investment (ROI): Measuring ROI helps businesses determine the profitability of their investments and make informed decisions about future investments.
  • Net promoter score (NPS): This KPI measures customer loyalty and satisfaction and is often used in service-based businesses to identify areas where they can improve their customer experience.


Key Performance Indicators (KPIs) are critical for established businesses that want to maintain their competitive edge and continue to grow. By tracking KPIs, businesses can identify areas of improvement, measure their performance, and make data-driven decisions. KPIs help businesses stay focused on their goals and align their efforts towards achieving them. Examples of KPIs that established businesses may use include customer satisfaction, employee productivity, sales growth, cash flow, website traffic, inventory turnover, ROI, and NPS. As businesses continue to evolve, the KPIs they prioritize may change, but the importance of measuring and tracking their performance will remain essential for their long-term success.

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