Essential KPIs for analyzing data in key job sectors
Learn the importance of KPIs in data analysis and key performance indicators for industries such as sales, human resources, marketing, e-commerce, healthcare and others.
In today’s increasingly digitized world, data is the lifeblood that fuels business growth and innovation. Being able to interpret and analyze this data correctly is critical to the success of any business. In this article, we will explore the importance of choosing the right KPIs (Key Performance Indicators) in data analysis and how these KPIs differ across business sectors.
The importance of KPIs in data analysis
KPIs are quantitative measures used to evaluate the effectiveness of an organization’s strategies and actions in achieving its goals. Choosing the appropriate KPIs is essential to ensure that resources are used effectively and that decisions are evidence-based. An effective KPI must be:
Relevant to the goals of the organization
Measurable and based on accurate data
Communicable and easily understood
Practical and action-oriented
Job sectors and related KPIs
Below are some of the main areas of work and the most important KPIs for each.
Agriculture and food production
Productivity per hectare: measures the amount of product obtained per unit of land (e.g., kilograms per hectare). Higher productivity per hectare indicates that the farm can use resources efficiently and produce more food in a smaller area.
Crop yield: represents the amount of product obtained per unit of agricultural input, such as seeds, fertilizer and water. Higher crop yields suggest that the farm can produce more food with fewer resources, contributing to greater sustainability.
Average production cost: measures the total cost incurred to produce one unit of food product, taking into account various factors such as material costs, labour, energy and equipment maintenance. A lower average cost of production indicates greater efficiency in resource management and greater profitability for the company.
Resource utilization rate indicates the percentage of available resources used in production A higher resource utilization rate suggests that the company can maximize available resources and reduce waste.
Food quality and safety: measures the level of quality and safety of food products produced by the company. This KPI can include various indicators, such as compliance with food safety regulations, the number of product recalls, and customer satisfaction with product quality.
By closely monitoring these KPIs, agriculture and food production companies can assess the effectiveness of their operational strategies, identify areas for improvement and make changes to optimize sustainability, efficiency and quality in the sector.
Trade in goods and products
Total sales: refers to the total number of products sold in a given period. It indicates a company’s sales performance and can measure growth, set sales targets, and identify trends over time.
Sales by product: this KPI analyzes sales broken down by individual products. It helps identify which products perform best and which need improvement or more effective marketing strategies. It can also provide information on market demand for specific products and help guide production and inventory decisions.
Sales by region: measures sales by geographic area. It helps identify regions where the company has a strong market presence and those where marketing and distribution efforts must be intensified. It can also provide insights into consumer preferences and regional differences in product demand.
Average customer acquisition cost (CAC): represents the average cost incurred by the company to acquire a new customer. Includes marketing, advertising, promotions and other costs associated with attracting new customers. A lower CAC indicates more efficient customer acquisition, while a higher CAC may suggest optimising marketing and customer acquisition strategies.
Lead conversion rate: the percentage of potential customers (leads) who become paying customers. A higher conversion rate indicates that the company successfully turns leads into customers. In comparison, a lower conversion rate may indicate problems in the sales process or the quality of the information generated.
Number of orders: refers to the total number of orders received in a given period. This KPI can be used to monitor customer demand, evaluate promotional campaign effectiveness, and set sales volume targets.
By closely monitoring these KPIs, companies in the goods and product sales industry can make informed decisions about product development, marketing and sales strategies, and resource allocation, contributing to their success and growth.
E-commerce
Total online sales: indicates the full value of sales generated through a company’s e-commerce website in a given period. Monitoring total online sales helps to understand sales trends and evaluate the effectiveness of marketing and promotion strategies.
Visitor conversion rate: measures the percentage of website visitors who take a desired action, such as purchasing a product. A higher conversion rate suggests that the Web site effectively turns visitors into paying customers and that the site’s marketing and optimization strategies are working.
Average order value: represents the average value of transactions made on the e-commerce website. It is calculated by dividing total sales by the number of orders placed. Monitoring average order value can help understand customer buying behaviour and identify opportunities to increase the transaction value, such as cross-promotions or upselling.
Shopping cart abandonment rate: indicates the percentage of customers who add products to the shopping cart on the e-commerce website but do not complete the purchase. A high cart abandonment rate may signal problems with the checkout process, such as a complicated user interface or unexpected shipping costs. Reducing the cart abandonment rate can increase total online sales.
Average time spent on the site: measures visitors’ average time on the e-commerce website. A longer dwell time suggests that visitors find the site interesting and engaging, increasing the likelihood that they will make a purchase. Monitoring the average time spent on the site can provide information on improving the user experience and increasing conversions.
Customer return rate: represents the percentage of customers who make repeat purchases on the e-commerce website compared to the total number of customers. A high customer return rate indicates that customers are satisfied with the products and services offered by the company and are more likely to become long-term loyal customers.
By closely monitoring these KPIs, companies can assess the effectiveness of their e-commerce strategies and make changes to improve their online presence and achieve their business goals.
Energy and utilities
Energy consumption: measures the total amount of energy used by a community, business, or individual household over a given period. Energy consumption can be monitored to identify usage trends and promote adopting more sustainable and energy-efficient practices.
Energy efficiency: means the ability of a system, building or device to use energy efficiently to perform its functions. Higher energy efficiency reduces the required energy and can lead to energy cost savings and lower greenhouse gas emissions.
Service interruption rate: measures the frequency of energy service interruptions (e.g., power outages) in a given period. A low service interruption rate indicates that the company can provide reliable service and maintain continuity of service for its customers.
Energy loss rate: represents the percentage of energy lost during the transmission and distribution of power from the source to the end consumer. A lower energy loss rate indicates that the company can manage infrastructure and operations efficiently to reduce losses and improve the sustainability of the energy system.
Safety Index: measures the safety of operations in the energy and utilities sector, considering various factors such as labour accidents, regulatory violations, and public health risks. A higher safety index indicates that the company is taking appropriate measures to protect its employees, customers and the environment.
By closely monitoring these KPIs, companies in the energy and utilities sector can assess their operational strategies’ effectiveness, identify improvement areas, and make changes to optimize the industry’s sustainability, reliability, and safety.
Telecommunications industry
Customer attrition rate: indicates the percentage of customers who terminate their relationship with a telecommunications company in a given period. A low attrition rate suggests that the company can keep customers satisfied and retain them long-term.
Average problem-solving time represents the company’s average time to solve customer problems and requests. A shorter resolution time indicates efficient and responsive customer service.
Market penetration rate: measures the percentage of customers who use a telecommunications company’s services relative to the total number of potential customers in the target market. A high penetration rate indicates a significant market share and a strong presence in the industry.
Signal quality indicates the quality and reliability of the signal the telecommunications company provides. Signal quality can be measured regarding signal strength, connection speed and latency. High signal quality is an indicator of efficient and reliable telecommunications services.
Number of new subscriptions: represents the number of new customers who subscribe to a telecommunications company’s services in a given period. Monitoring the number of new subscriptions can help a company evaluate the effectiveness of its marketing and customer acquisition strategies.
Customer satisfaction: measures customer satisfaction with the services the telecommunications company offers. Customer satisfaction can be assessed through surveys, online reviews, and other sources of feedback. A high level of customer satisfaction indicates that the company is providing high-quality services and meeting the needs of its customers.
By closely monitoring these KPIs, telecommunications companies can assess the effectiveness of their strategies and operations and make changes to improve service quality and customer satisfaction.
Video game industry
Number of daily/monthly active users: indicates the number of users interacting with a game on a given day or month. This KPI indicates a game’s popularity and ability to maintain user interest over time.
The average play time per user: represents the average time users spend playing a game. A longer play time suggests that the game is engaging and can keep users’ attention.
Free-to-paying player conversion rate: measures the percentage of users who switch from a free-to-play experience to a paid version. A high conversion rate indicates that the game offers added value for users, encouraging them to make in-game purchases.
The average revenue per user: represents the average amount of money a company earns from each user over time. Monitoring average revenue per user can help a company assess its monetisation strategies’ effectiveness and identify growth opportunities.
Player abandonment rate: indicates the percentage of users who stop playing a game after a certain period. A low abandonment rate suggests that the game can keep users interested and retain them long-term.
User ratings and reviews: measure user feedback and satisfaction with a game. High ratings and positive reviews indicate that the game is well-designed, provides an engaging gaming experience, and meets users’ expectations.
By closely monitoring these KPIs, companies in the video game industry can evaluate the effectiveness of their development, monetization, and marketing strategies and make changes to improve the gaming experience and user satisfaction.
Entertainment industry
Total revenue represents the sum of all earnings an entertainment company generates over a given period. Total revenue may include ticket sales, season tickets, merchandise sales, and other sources of income.
Number of spectators/visitors: indicates the number of people who attend an event or visit an entertainment venue in a given period. Monitoring the number of viewers or visitors can help a company gauge the popularity of its offerings and identify trends in audience behaviour.
Seat occupancy rate: measures the percentage of occupied seats relative to the total capacity of an event or entertainment venue. A high occupancy rate suggests that the entertainment offerings are widespread and can attract a broad audience.
Merchandising sales: represent the total sales of promotional products, such as T-shirts, caps, posters, and other items related to an event or entertainment company. Monitoring merchandising sales can provide information on audience engagement and brand loyalty.
Average visitor length of stay: indicates the average time visitors spend at an entertainment venue or during an event. A longer duration suggests that the entertainment experience is engaging and able to maintain the audience’s interest.
Customer satisfaction: measures customer satisfaction with the entertainment experience provided. Customer satisfaction can be assessed through surveys, online reviews, and other sources of feedback. A high level of customer satisfaction indicates that the company is providing a high-quality entertainment experience and meeting the needs and expectations of the public.
By closely monitoring these KPIs, companies in the entertainment industry can assess the effectiveness of their marketing, development, and event management strategies and make changes to improve customer experience and industry profitability.
Financial industry
Investment returns: represent the economic return generated by investments made by a company or investor. Investment return can be expressed as a percentage and is used to evaluate the effectiveness of investment strategies and compare different investment opportunities.
Operating margin: indicates the percentage of profits generated by a company’s operations compared to its total revenue. A higher operating margin suggests the company can manage costs efficiently and generate profits from its core activities.
Portfolio value represents the total value of investments a company or investor holds at a given time. The portfolio’s value can be used to monitor investment growth over time and evaluate the effectiveness of portfolio management strategies.
Earnings growth rate: measures the percentage change in a company’s earnings over time. A high earnings growth rate indicates that the company is increasing its profits and can be a sign of good financial performance.
Credit risk: represents the probability that a borrower will be unable to meet payment obligations. Companies in the financial sector, such as banks and lending institutions, must closely monitor credit risk to manage risk exposure and maintain financial stability.
By closely monitoring these KPIs, companies in the financial industry can assess the effectiveness of their investment, risk management, and financial performance strategies and make changes to improve the profitability and sustainability of the industry.
Education
Graduation rate: indicates the percentage of students who complete an education program and obtain a diploma or degree. A higher graduation rate suggests that the educational institution can effectively support students in achieving their academic goals.
Percentage of students promoted: measures the percentage of students who pass exams and advance to the next level of education. A high percentage of students promoted indicates that the institution provides quality education that enables students to acquire the skills and knowledge they need to succeed.
Graduate employment rate: represents the percentage of graduates who find employment in their field of study within a given period after completing their education. A higher graduate employment rate suggests that the institution provides relevant and practical education that prepares students for the job market.
Student satisfaction: measures students’ level of satisfaction with the education and services provided by the institution. Student satisfaction can be assessed through surveys and feedback, including aspects such as the quality of teaching, available teaching resources, and student support.
Investment in training and research: indicates the number of financial resources an educational institution devotes to developing training programs and academic research. Investment in training and research can help improve the quality of education offered and promote innovation in the field.
By closely monitoring these KPIs, institutions in the education sector can assess the effectiveness of their educational strategies and practices, identify areas for improvement, and make changes to ensure high-quality education that prepares students for academic and career success.
Logistics and transportation
Average delivery time: indicates the average time taken to deliver a package or shipment from its origin to its final destination. A shorter average delivery time suggests that the company can manage shipping operations efficiently and meet customer expectations.
On-time delivery rate: measures the percentage of deliveries that arrive at the destination within the promised time. A high on-time delivery rate indicates that the company can keep its customer commitments and provide reliable service.
Transportation capacity represents the percentage of transportation capacity used compared to the maximum available capacity. A high rate of utilized transport capacity indicates that the company uses resources efficiently and reduces waste.
Cost per kilometre: measures the total cost incurred to transport goods or passengers for one kilometre. The cost per kilometre may include fuel, vehicle maintenance, drivers’ salaries, and other operating expenses. Lower cost per kilometre indicates greater operational efficiency.
The goods damaged rate indicates the percentage of goods damaged during transportation. A low freight damage rate suggests that the company can handle shipments safely and minimize losses due to damage.
By closely monitoring these KPIs, companies in the logistics and transportation industry can assess their operational strategies’ effectiveness, identify improvement areas, and make changes to optimize service quality and profitability in the industry.
Human Resources
Employee turnover rate: measures the percentage of employees who leave the company in a given period relative to the total number of employees. A high turnover rate may indicate problems with employee dissatisfaction, company culture, or management. In contrast, a lower rate suggests that the company can retain staff for the long term.
Cost per hire: represents the average cost incurred by the company to hire a new employee. Includes costs such as advertising vacant positions, interviews, selection, and training. Monitoring this KPI can help identify inefficiencies in the hiring process and reduce associated costs.
Average time to hire: indicates the average time it takes to hire a new employee, from when the vacancy is posted to actual hiring. A shorter intake time may indicate an efficient intake process, while a more extended time may suggest a need for process improvement.
Absenteeism rate: measures the percentage of working days lost due to employee absences (such as sickness or personal leave) relative to total available working days. A high absence rate can affect productivity and business costs and may indicate problems with employee welfare or absence management.
Internal promotion rate: represents the percentage of employees promoted internally to the total number of available promotions. A high internal promotion rate may indicate a commitment to investing in employee development and professional growth within the company.
Employee satisfaction: measures employee satisfaction with factors such as compensation, work environment, work-life balance, opportunities for growth, and company culture. Employee satisfaction is crucial to maintaining a positive and productive work environment and can be assessed through internal surveys or interviews.
Closely monitoring these KPIs can help the human resources department evaluate and improve its policies and practices, contributing to the success and growth of the company as a whole.
Healthcare
Bed occupancy rate: indicates the percentage of occupied hospital beds to the total number of available beds in a given period. A high occupancy rate may indicate a high demand for healthcare services and a need to increase hospital capacity or improve efficiency.
The average length of hospitalization: represents the average time patients spend hospitalized. A shorter average length of hospitalization may indicate more efficient health care and a lower risk of complications for patients.
Readmission rate: measures the percentage of patients admitted back to the hospital within a certain period (e.g., 30 days) after discharge. A high readmission rate may suggest problems in health care quality or patient discharge management.
Nosocomial infection rate: indicates the percentage of patients contracting infections during their hospital stay. A low nosocomial infection rate indicates good hygiene and infection control practices within the health care institution.
Patient satisfaction: measures patients’ level of satisfaction with the health care they receive. Patient satisfaction can be assessed through surveys, online reviews, and other sources of feedback. A high level of patient satisfaction indicates that the healthcare institution is providing high-quality care and responding to patient needs.
Average waiting time for appointments and surgeries: represents the average time patients wait before receiving a license or surgery. A shorter wait time indicates a more efficient healthcare system and greater accessibility of services for patients.
By closely monitoring these KPIs, healthcare institutions can assess the effectiveness of their practices and policies and make changes to improve healthcare quality and patient satisfaction.
Social media marketing
Several followers and fans: indicates the total number of people who follow or like company profiles on various social media. A high number of followers and fans suggests greater brand visibility and a broad base of potential customers.
Engagement rate: measures the interaction between users and the content posted by the company on social media. Engagements include likes, shares, comments and other forms of interaction. A high engagement rate indicates the content is relevant and exciting to the audience and can help build a closer relationship with customers.
Visitor conversion rate: represents the percentage of visitors to the company’s social media profiles who take a desired action, such as purchasing a product or signing up for a newsletter. A higher conversion rate indicates that social media marketing strategies are succeeding in turning visitors into paying customers.
Post reach: indicates the number of unique users who viewed the content posted by the company on social media. The reach can be organic (i.e., without using paid ads) or promoted (through paid ads). Greater reach means that the company’s content reaches a broader audience.
Impressions: measures the number of times content posted by the company was viewed on social media, regardless of whether it was read. A high number of impressions can indicate higher brand visibility and a greater likelihood that potential customers will see the content.
Click-through rate (CTR): represents the percentage of users who click on a link or ad posted by the company on social media compared to the total number of impressions. A higher CTR indicates that the company’s content and ads effectively generate interest and prompt users to take a desired action.
By closely monitoring these KPIs, companies can assess the effectiveness of their social media marketing strategies and make changes to improve their online presence and achieve their business goals.
How to choose the right KPIs
Choosing the right KPIs depends on your organization’s specific goals and the characteristics of the industry in which you operate. Here are some tips to help you choose the KPIs that best suit your needs:
Identify your organization’s main goals and ensure that KPIs are directly related.
Choose KPIs that are measurable and based on accurate and reliable data.
Avoid using too many KPIs, as this may make it difficult to focus on critical areas for improvement.
Share KPIs with your team and make sure they are understandable and easily communicated.
Review KPIs periodically to ensure that they remain relevant and valuable.
Example (dental implant industry)
A company engaged in marketing dental implants may be associated with the health and dental industry. Some of the most critical KPIs for this type of company might include:
Total sales: the total number of dental implants sold in a specific period.
Sales by product: the breakdown of total sales for each type of dental implant the company offers.
Sales growth rate: the percentage of sales growth from a previous period.
Market share: the percentage of the company’s sales to total sales in the dental implant industry.
Average customer acquisition cost: the average cost incurred to acquire a new customer (e.g., through marketing and advertising).
Lead conversion rate: the percentage of potential customers who become paying customers.
Customer satisfaction: an index that measures customer satisfaction based on product quality, customer service, and value for money.
Repurchase rate: the percentage of customers who make a further purchase after the first one.
Number of new customers: the number of new customers acquired in a given period.
Carefully observing these KPIs can help the company assess its performance, identify areas for improvement, and make informed decisions to achieve its goals.
Monitor and adjust KPIs over time.
Monitoring KPIs regularly to assess progress and identify improvement areas is essential. In addition, as organizational needs and market conditions may change over time, KPIs may need to be updated or adjusted to reflect these changes. Be sure to:
Establish a regular process for reviewing and monitoring KPIs.
Communicate results and progress to team members and stakeholders.
Be willing to modify or update KPIs if circumstances require it while maintaining a flexible and adaptive outlook.
How to analyze business performance with Tableau
This dashboard provides a comprehensive view of the business performance of a fictitious company (Northwind), a gourmet food supplier. KPIs presented include:
Annual and daily revenue;
Annual and daily shipping costs;
Total and daily order count;
Best-selling and most expensive products;
Highest revenue-generating and most costly-to-serve customers.
Additionally, Country, Category, Manager, and Employee filters are available for more detailed analysis.
To access the dashboard, click on the following image:
Conclusion
In conclusion, choosing the right KPIs is critical to success in any business where data analysis is required. KPIs must be relevant, measurable, transferable and practical. Each work area has specific KPIs, and understanding these indicators can help an organization make informed decisions and achieve its goals. Remember to monitor and adjust KPIs over time to remain relevant and valuable.
FAQ
How can I choose the right KPIs for my organization?
To choose the right KPIs, identify your organization’s main goals and select KPIs that are directly related to these goals. Also, ensure KPIs are measurable, based on accurate data, and easily communicated.
Is it necessary to constantly monitor KPIs?
Yes, it is essential to monitor KPIs regularly to assess progress, identify areas that need improvement, and ensure that KPIs remain relevant over time.
What does “adjusting KPIs over time” mean?
Adapting KPIs over time means being willing to change or update KPIs according to the needs of the organization and market conditions. This may include adding new KPIs, modifying existing ones, or eliminating obsolete ones.
Are the KPIs the same for all areas of work?
No, KPIs vary depending on the business sector. Each sector has specific KPIs that reflect the needs and goals of that sector.
If you are interested in learning more about this topic or have specific questions, please get in touch with me using the references on my contact page. I will happily answer your questions and provide more information about my work as a Data Analyst. Thank you for visiting my site and for your interest in my work.
