KPI reporting is the last step or end to any successful analytics strategy. Finding the right analytics tools, implementing them and setting them up are just means to an end.
The problem is that creating great KPI reports isn’t easy. With so many potential KPIs to choose from, and the different ways of displaying them, it’s no wonder that most reports are simply ignored.
This article came after I got a question from one of my clients:
“I would like to setup a weekly KPI dashboard that lets me to see the health of my business at a glance but it also allows me easily send emails/PDFs to other members in my companies so they can see the progress on our core KPIs.”
This is a pretty common request. In fact, every single one of the companies that I talk to have asked a similar question at some point. In this article, I want to cover 3 principles that I share with my clients when working on creating reports.
Before that, let’s get some definitions out of the way. The folks over at Scoro have a great description for what makes a great KPI report:
“A well-defined KPI report could be described as visually attractive, informative and actionable” – Source
Let’s look at the 3 principles that you can use to create KPI reports that will actually get read and get people to take action.
Principle 1: Start with the End in Mind
If you read any of my other articles, you know how much I love the idea of starting with the end in mind. It’s not a revolutionary idea and even Einstein had this quote:
“If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” – Albert Einstein
The point here is that spending some time figuring out what you want your outcome to be or what problem you’re trying to solve can be extremely beneficial ensuring you actually solve the problem.
When it comes to KPI reports, skipping this step means you’ll spend some time creating a report that no one will read. It will simply be just another to-do item that never gets done.
We want to avoid that by getting crystal clear with the role your KPI report will serve. To do that, let’s run through the following questions:
- What business goal is this KPI report helping you with? More revenue? Decreased marketing spending? Improved user retention?
- What actions would you like this report to inspire?
- What decisions would be easier if you had perfect data?
- What decisions aren’t happening because of a lack of data?
Once you know what actions you want this report to inspire, you can start to find the metrics that will help you do this. 2-3 great metrics can be much better than 10 crap metrics. If a metric isn’t going to help you change your actions, skip it.
Keep Reports to One Page
Don’t try to create a single report for your entire company. The best KPI reports are short and sweet. In fact, most people would prefer to have the report be one page which means you can’t possibly include every metric under the sun.
It is much better to have multiple KPI reports that tackle different problems than having a 12 page report that is trying to do too much.
Multiple reports will be needed since great reports can usually be summarized in 1 page limiting the number of metrics you can show
Once you know what actions you want to inspire, we need to figure out who will be reading this report.
Principle 2: Who will Read the KPI Report?
The audience of the report matters a lot. A CEO cares about different things than a COO and even a Marketing Manager. This is also why you will need different reports since the audience will change and you need to change the metrics that you show to them.
Once you know who will read this report, you need to understand what they care about. Questions below should help you with that:
- What decisions or actions can this audience take? A CEO is able to take different actions than what a Marketing Manager can.
- What decisions keeps them up at night? Your report can help them get better sleep (seriously).
- What do they spend most of their day thinking about?
If you don’t know the answers to these questions, ask them. Don’t just assume that you know what they care about.
The last thing you want is to increase the choice overload or overchoice for the audience of your report. Choice overload is defined as:
“The phenomenon of overchoice occurs when many equivalent choices are available. Making a decision becomes overwhelming due to the many potential outcomes and risks that may result from making the wrong choice” – Source
We are all busy so having to read yet another report can either be a chore or a blessing. To ensure that your report is well received, think about how to make it easy for your audience to say to the right things and how data can help them make better and faster decisions.
This means distilling your to the metrics that they care about while removing all the fluff. This differs for different people but the overall goal here is for your KPI report to make it easy for your audience to make a decision.
The Format of Your KPI Reporting Matters
A minor point on the format of the report. Choose a format that is easy for your audience.
If they are always on the go, then make a report that can be easily accessed by email and looks great in mobile devices. Don’t send an Excel spreadsheet that is a pain to view on their phone.
The format of the report matters. It should be easy to consume and access for your audience – Image Source
If they prefer to dig through the data and work with it, then a more interactive dashboard would work here. Again, your audience dictates the format of your report.
Now that we know the outcomes for our report and who our audience will be, let’s move on to the last principle: tracking progress.
Principle 3: Tracking Progress & Improvements
Most KPI reports are created on a regular basis which means that you need to track the progress or change in your key metrics.
To do this, you need two things: targets and progress tracking.
The first one, targets, is simply a number that you’re aiming to hit. If the current CAC (Cost of Acquisition) is $100 then you could define a target of $90. Every report, you can then show your current number against the target of $90.
Good targets are realistic within a specific time frame.
The second thing here is progress tracking. As your targets get bigger, you want to have a way of showing your improvements from week to week or month to month.
Besides simply showing your current number against your target, you can also show how this number has changed against past numbers. This can be done by using different date periods such as:
- This Month vs Last Month
- This Month vs Last Month Last Year
- This Month vs Average of Past 3 Months
In all cases, you’re showing your number against a past number and hopefully seeing an increase. You want to be able to show a positive trendline towards the target your defined.
This progression tracking is what let’s you consistently tackle big problems until you solve them. The minor improvements you achieve will provide momentum and motivation. There’s a great quote that fits this mentality perfectly:
“Success is neither magical nor mysterious. Success is the natural consequence of consistently applying basic fundamentals.” – Jim Rohn
As you can see, creating great KPI reports isn’t just about randomly putting together different metrics into a KPI dashboard or other tool. It is about thinking of what data is needed to make the right decisions within your company.
It requires a thoughtful effort to understand what the audience of this report cares about and what actions this report is supposed to help them take.
If you have any questions or comments, please feel free to comment below or message @ugarteruben
I find most companies are stuck with high-level metrics and they aren't able to properly understand what actually drives user growth for their web and mobile products. To do that, you need the right data and the right tools.
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