Posts tagged "KPI of the Month"

KPI of the Month: monitoring revenue growth rate for business success

June 14th, 2023 Posted by KPIs, Research 0 thoughts on “KPI of the Month: monitoring revenue growth rate for business success”

Measuring financial performance in today’s dynamic and competitive business landscape goes far beyond traditional metrics. Aside from profitability and cash flow, the revenue growth rate is a vital indicator for companies striving for success. 

Monitoring revenue growth rates help the business make strategic decisions, attract investors, and maintain market competitiveness by comprehensively understanding their financial performance, whether it decreased or increased. It is also important to identify the factors influencing the revenue growth rate, such as choosing the right market, product and services pricing strategy, and customer retention rates.

Choosing the right market focus can help businesses narrow their target market and identify high-quality leads in their chosen segment, pursuing the most profitable customers. Moreover, narrowing market focus can effectively customize products or services to match the market segment’s unique demands and preferences. 

However, even the most profitable segments can lead to lower revenue rates because of the product and service prices as more business competitors enter the market. Hence, the right products and services pricing strategy is essential. According to research, “accurate and effective pricing” is vital for a company to become profitable. All products and services should have pricing plans based mainly on the knowledge of the demands and values of the target market. Based on the same study, value-based pricing is the best method to assess an item’s right price based on the value it generates for clients and their perceived worth. 

With reasonable products and service prices and the best quality value, satisfied customers are more likely to become repeat customers, refer the business to others, and drive long-term revenue growth. A study conducted on businesses in Kurdistan suggests that pricing strategies have a strong and significant impact on customer retention. Based on the study’s results, customers prioritize product pricing over product quality. It was also discovered that implementing an aggressive pricing strategy is more effective in customer retention.

A thorough comprehension of these elements equips organizations to adjust to shifting market conditions, streamline processes, and promote long-term revenue development. But what are the ways in which businesses can monitor their revenue growth rate? There are a few of them such as analyzing revenue trends by regularly reviewing financial statements like income statements, balance sheets and cash flow statements, tracking sales quantity and value over time by monitoring sales reports, and using key performance indicators (KPIs) related to revenue.

The KPI Institute’s infographic titled “KPI of the month: % Revenue growth rate” is an easy guide for businesses to determine whether their revenue has grown or dropped over time and measure the level of its change. Specifically, the % Revenue growth rate calculates the revenue variance percentage over a designated time frame. This can be calculated on a quarterly or annual basis. 

To get a picture of the overall revenue performance, it is essential to monitor the % Revenue growth rate alongside other KPIs, such as $ Net income and $ Financial expenses. Moreover, organizations should take competitive aims and industry standards into account when defining targets as part of the annual budgeting process to make sure their goals are realistic and achievable.

Download the free infographic on the slot thailand TKI Marketplace today and unlock the power of KPI in monitoring your business revenue growth rate.


Impact of environmental sustainability on businesses

April 26th, 2023 Posted by KPIs 0 thoughts on “Impact of environmental sustainability on businesses”

With the world facing many environmental challenges, including climate change, pollution, and resource depletion, companies acknowledge the need to prioritize sustainability in their operations. 

According to a survey conducted by the United Nations Global Compact and Accenture, almost 98% of CEOs recognize the importance of sustainability and see it as a core part of their role. Moreover, a report by the Global Reporting Initiative found that 73% of the world’s largest companies are now reporting on their sustainability performance. Additionally, over 25% of businesses reported cost savings as a result of their sustainability investments.

Not only is it a moral imperative but it is also increasingly becoming a business essential as consumers, investors, and governments demand more sustainable practices from businesses. The Global Sustainable Investment Alliance reports that sustainable investments reached $35.3 trillion globally in 2020, up 15% from 2018. Furthermore, a survey revealed that over one-third (34%) of the population is willing to pay a 25% premium on average for sustainable products or services.

But there is still much progress to be made. Monitoring performance using key performance indicators (KPIs) can provide insights into environmental performance and aid in monitoring waste reduction and management.

One example is The KPI Institute’s KPI of the Month: % Waste reused, recycled, and recovered. This KPI helps businesses identify the proportion of reused, recycled, or recovered from the total waste generated during the reporting period. Its purpose is “to provide an indication of the performance management efficacy and commitment to corporate social responsibility and sustainability actions.”

This KPI of the Month endorses the Zero Waste Hierarchy framework, which aims to promote sustainable choices, minimize waste, and conserve resources. The framework is divided into seven parts: redesign, reduce, reuse, recycle, recover, residuals and unacceptable. 

To know more about how to use the % Waste reused, recycled, and recovered indicator, download the free poster through The KPI Insitute Marketplace

The KPI of the Month Infographic features a KPI by providing its definition and presenting the challenges of using the KPI in terms of calculation, Balance Scorecard focus, data profile, targets, and recommendations for implementation. It is a valuable resource for practitioners, academics, and consultants working in performance management.

Employee Turnover Rate: Why It Is Important to Your Organization

November 11th, 2022 Posted by Uncategorized 0 thoughts on “Employee Turnover Rate: Why It Is Important to Your Organization”

The Great Resignation made front-page news globally in 2021 and continues to be a contentious workforce issue this year. In a survey conducted by Gartner, results show that annual employee voluntary turnover in the United States is expected to increase by nearly 20%, of which 37.4 million employees are quitting their jobs until the end of 2022. 

Evaluating turnover is one of the key matters in Human Resources (HR) management because it has a significant impact on determining employee availability in the future. According to Forbes, having replaced an employee is more expensive than maintaining them as the entire recruitment procedure must be restarted, which takes more “time and resources.” Moreover, a high turnover rate leads to extra costs for finding a replacement, decreased productivity, a scarcity of experienced and efficient workers, and a lack of faith in the team’s abilities.

Employee turnover is unavoidable, regardless of industry or sector. But how can it be reduced? There are a lot of ways to reduce turnover but it should start within the organization. Promoting healthy company values and culture increases the motivation of employees to stay. Based on surveys, 46% of job seekers believe that company culture is essential and 15% reject job offers relatively because of the culture. In addition, 35% of American workers would not accept a job offer if the culture is not right even if the job offer is perfect for them. 

Once the company culture is established, choosing the right employee to join the organization is essential. Business Development Bank of Canada (BDC) Consultant Irene Lis believes that the first step in the employment relationship is recruitment. Also, Irene mentioned that organizations should hire employees not only for their skills and experience but also for their compatibility with the team and desire to be a part of the company.

If an organization aims to retain its employees, it should investigate and evaluate the reasons for employee retention and work to strengthen these. Forbes shared, “turnover rate is an excellent indicator of what is wrong or right with your human resources policies and the organization in general.”

The KPI Institute has released its key performance indicator (KPI) of the Month, which is % Employee Turnover. This indicator “measures the rate at which employees leave the organization in a given period.” Its goal is to demonstrate the effectiveness of employee management strategies and an organization’s recruiting process. 

To know more about this indicator and clarifications and its application in terms of profile, calculation, Balance Scorecard focus, data profile, targets, and in-practice recommendations, download your copy HERE

KPI of the Month is a collection of infographics focused on spreading The KPI Institute’s valuable knowledge about the application of KPIs in performance measurement.

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