What Is a KPI & Why KPI Tracking Matters

Goals and metrics are crucial to the success and growth of your business. But if you’re not sure how to track these items in a meaningful way, all that data isn’t very useful. This is where key performance indicators, or KPIs, come into play.

At SpeedPro, we believe that KPI setting and monitoring is imperative to the health of every franchise in our national network. We help our franchise owners identify and track their metrics against specific goals to ensure both individual Studios and our overall business system are doing well in the industry. If you’re new to KPIs, there’s no need to fret! Take a closer look at what KPIs are and why they’re so important to monitoring your business’s performance.

What is a KPI?

By definition, KPIs are quantifiable measurements that gauge business performance over time. KPIs go beyond numbers; instead, they capture the essence of a business’s goals. Whether they’re measuring sales, marketing or customer satisfaction, KPIs provide a tangible way to assess progress toward what will have the biggest impact on your Studio.

It’s important to understand that KPIs are not the same as metrics. They are similar in function—measuring performance—but KPIs are more impactful than metrics because they are tied to specific goals for your business. While metrics are useful, they’re not always weighed equally; some matter more than others. The KPIs you set should always reflect the most important indicators of your business’s success.

This distinction matters because it sharpens your focus. Consider an example. All B2B companies track metrics related to leads, customers and sales. One metric might be “lead to conversion ratio,” or how many sales leads turn into paying clients. But the number of paying customers might not matter as much as the volume of sales your business generates from those customers.

If you have a goal to increase sales by 20%, you might set KPIs to track “sales growth per quarter” and “sales volume per customer.” These KPIs look at data over time to measure the growth or decline in your overall and per-customer sales—demonstrating how close or far you are to reaching your goal.

There are different types of KPIs your business can track. Two of the most important to understand are “leading” and “lagging” indicators. Leading indicators help predict outcomes, using current/planned data to project what will happen in the future. Lagging indicators identify past success, looking at what has already happened to measure patterns and results.

KPIs will look different across business types and industries. While many companies track similar metrics, they each assess performance and growth uniquely. This is why it’s important to set specific and achievable goals and use KPIs that closely relate to them.

SpeedPro encourages Studio owners to set KPIs related to certain business growth areas, including finance, sales and marketing. These include:

  • Sales Performance
  • Sales Product Mix
  • Cost of Goods Sold
  • Gross Profit
  • Net Operating Income
  • Owner’s Discretionary Profit
  • Digital Marketing Data
  • Financial Health Compared to Other Studios

Why should you monitor KPIs?

At their core, KPIs are important for tracking the success of your business. They indicate what’s going well and what’s not working as it relates to your strategic goals. If you’re trying to help your Studio grow, but your KPIs indicate stagnancy, you’re not headed in the right direction.

But more than assessing whether you are or are not on track to meet your goals, KPIs serve as a compass that guides decision-making. They provide real-time insights into where, specifically, you should turn your attention in order to hit your targets. By understanding the story that KPIs tell, franchise owners can make adjustments and seize opportunities with greater confidence.

KPIs can also serve as early warning systems, helping you detect potential issues before they escalate. Using this proactive approach gives you the opportunity to intervene quickly and navigate uncertainties more easily.

Most importantly, KPIs serve as a continuous feedback loop, allowing franchise owners to identify areas of strength and weakness. These insights become catalysts for continuous improvement, allowing you to adapt, innovate and ultimately enhance your business’s overall performance.

How to implement and track KPIs in your SpeedPro Studio

Setting and tracking KPIs isn’t as complicated as it may seem. The main thing to remember is that each KPI you set should be directly related to your business objectives. Use these steps to determine the KPIs that make the most sense for your Studio:

  1. Consider your strategic goals. Identify the most important objectives for your business and what kind of results you want to see. These results should be measurable to indicate success.
  2. Identify the metrics that relate to these goals and intended results. What kind of indicators will show you how close or far you are from reaching those results? Aim to include a mix of lagging and leading indicators to inform each strategic goal.
  3. Choose just a handful of KPIs. You don’t want to overload yourself with data or include indicators that are irrelevant to your goals. This could result in wasted time and energy tracking the wrong things.
  4. Set targets for each KPI. This gives you and your team something to work toward and measure against within a specific period of time.
  5. Ensure your KPIs are SMART: Specific, Measurable, Attainable, Realistic and Time-bound. Each of these things is necessary to make tracking KPIs easier.

Once you have your KPIs set, you’ll need to use software and systems to help you track data. SpeedPro’s turnkey business package provides owners with everything they need to monitor performance and keep close tabs on their KPIs. Our corporate support team will also check in regularly and help you set and monitor indicators to ensure you hit your Studio’s goals. By working together, we ensure each franchise is positioned for growth and success!

Interested in launching your very own large-format printing business? Explore SpeedPro’s franchise opportunity! Contact us to learn more.