Types of Statistics Used to Measure Key Performance Indicators

Types of Statistics Used to Measure Key Performance Indicators
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Data Reporting

The data reporting process is a system that helps to generate reports using various project related statistics. Project managers rely on this system to monitor, deploy and convert data into reports. Data analysts present the data in a written format with graphs, diagrams and charts so that the managers can read them clearly. The processes are automated to retrieve periodic reports from the system. These reports help to determine the key performance indicators. These KPIs help the managers to understand how the projects work. Through this article,you will learn about different types of statistics used to measure key performance indicators. You can also create project team organizational charts using various tools like Visio which can be connected with this reporting system.

Average Order Value

The average order value is a type of statistic used to measure the key performance indicators, especially in the retail industries. The sum or the total of revenue generated and the number of orders taken are used to calculate the average order value.

Average Order Value = Total Revenue / Number of Orders Taken

This value will help you to analyze the cost spent by customers per order where you can identify the quality errors, if any, in your business. If you notice the average order value drops, it is high time for you to make the necessary changes to improve the quality of your product or a service.

Items Per Order

This statistic is used to determine the average number of the items sold during each order transaction. For example, while purchasing a mobile phone, the customer also ends up buying the supporting accessories like the pouches, tags, covers, cases, hand frees, car charges and travel charges. The high number of items per order means a high revenue generated for the seller. The items per order statistic helps to measure the cross sell endeavor to the customer.

New vs. Returning Customers

The new vs. the returning customers is the statistic used to measure the key performance indicators such as the sales, the marketing activities, and the amount spent on the promotional initiatives. The percentage of new vs. the returning customers from the overall customer count is used here. Depending on the result, the organizations make the changes to their marketing activities. For example, if the number with respect to the returning customers is less,the organization must focus on improving their post sales activities. There are various business research methods which can help you find ways on how to improve the post sales activities. This statistic measure is used as a key tool to determine the value of businesses.

Hold Time

The average response time for the customers put on hold is the commonly known statistic used to measure certain key performance indicators, especially in the call center and support service businesses. If the average response time is high, it will result negatively in the business. The customer frustration towards the company’s service practice increases and in turn leads to customer attrition.

Success vs. Stated Business Goals

Business Goals, svilen001, sxc.hu

The bigger or global organizations use success vs. stated business goals as the important statistic to measure the key performance indicators. For example, an organization aiming at increasing their sales by 25% in 2012 (or by a specific timeframe) uses this statistic to periodically analyze how far the organization is from reaching its goal. Depending on the result, the organization aims at improving or making changes in its sales activity. Entrepreneurs use this statistic as a key tool in measuring the performance and in assessing the inventory KPIs.

Conversion Rate

The percentage of customers involve with your business through some action is known as the conversion rate. It could be anything ranging from ordering goods online, signing up for the offers, newsletters, using coupons online or in stores and many more. The conversion rate is the statistic used to measure the key performance indicators, specifically in e-commerce and online businesses.

Open Rate

An open rate is the statistic used to measure the key performance indictors by the professionals responsible for an email marketing. As you know, the processes are defined with a targeted lead time. The open rate helps to analyze the number of orders processed within a specific lead time. The email marketers commonly use it to measure the effectiveness of the email subject line.

KPIs for Your Organization

The KPIs have become the universally accepted tools to measure how organizations perform. Understand the different types of key performance indicators used in project management. Make sure to choose the right methodology or the combination of the statistics used to measure the key performance indicators for your organization. Choosing the right one is very important to achieve the expected results.