Key Performance Indicators, or KPIs, are an important component of CPM and can help executives and management understand how the business is performing against its goals to help drive decision-making.
The panel included senior executives from Comcast Ventures, Eyeview Digital, Silicon Valley Bank, and NetSuite. The main focus of the panel discussion was on the role KPIs play in various stages of a company’s growth.
Here’s a brief summary of the key points made by the panelists:
- Keep KPIs Simple: When it comes to metrics, there is such a thing as too much information. The panel recommended that high-growth, early stage companies track 3-5 KPIs at a time. Anything more will dilute the value of the information you’re presenting to your board and executive team.
- Let KPIs Evolve: As your company evolves, so too should your KPIs. In the early stages, your board and executive team should focus on your growth drivers (i.e. Recurring Revenue will usually trump everything in a subscription-based business). Over time, you’ll open the lens to understand new KPIs (such as CAC, churn, etc.)
- Stay wary of ‘hot’ KPIs: for example, LTV (Lifetime Value) for an early-stage company needs to be taken with a grain of salt as the model may not have proven itself out yet. Your board may drill down into CAC (Customer Acquisition Cost), as this number is usually presented as an average, and they’ll want to understand particular campaigns and tactics.
- Get Out of Your Spreadsheets: The panel agreed that you cannot scale your business in Excel. While it certainly works for very early-stage companies, the amount of data that you will need to process in order to arrive at your KPIs will quickly outpace the capabilities of a spreadsheet. Luckily, according to the panel, there are SaaS vendors out there that are enabling CFOs to do their jobs better.
If you would like to learn more about this topic, here’s a link to an article on the CFO Leadership Council web site with more details from the panel discussion:
To learn more about how Planful can help your organization reduce reliance on spreadsheets and gain better control over your KPIs, visit our web site at www.hostanalytics.com.