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KPI Discussion: Measure Performance and Achieve Goals
- 1. K P I Prepared by: Rio Raditya Prepared for: SalvoStampd A DISCUSSION SESSION ABOUT 1
- 2. TODAY’S DISCUSSION 1. BACKGROUND HISTORY 2. THE DEFINITION 3. KPI PLANNING 4. Q&A SESSION 5. THE GAME OF KPI ©RioRaditya 2
- 3. RULES 1. NO PHONE / LAPTOP ALLOWED. 2. IF THERE’S URGENT WORKS/TASKS, PLEASE DO IT OUTSIDE THE ROOM/KEEP YOUR MIC ON MUTE. (PLEASE RESPECT OTHERS) 3. THE DECK WILL BE SHARED LATER, TAKE NOTES TO STIMULATE YOUR BRAIN, NOT TO RE-WRITE. 4. GOT QUESTIONS/OPINIONS? TAKE NOTES AND DISCUSS IT ON Q&A PART LATER ON ©RioRaditya 3
- 5. HISTORY ©RioRaditya PART 1 setting up the context why we need to learn this skills 5
- 6. ©RioRaditya The story of KPI begins from the Industrial Revolution in Birmingham, England in 18th century... 6
- 7. ©RioRaditya James Watt, invented a steam engine that revolutionized how human live. We transform our life from human & animal centric power into a machinery power... 7
- 8. ©RioRaditya This new system creates a new culture to be more productive & people are being demanded to be a ‘specialist’. As work & task become more specific due to the clarity of organization & role. 8
- 9. DEFINITION PART 2 get to know the real meaning of KPI ©RioRaditya 9
- 10. ©RioRaditya A measurable value that demonstrates how effectively a plan achieve its objective. 10 The issues that we’re aiming to solve, the ambition to achieve. Marketing Objective The performance result against the KPI that has been forecasted before. Evaluation The process of forecasting the performance with measurable indicators KPI Setup The implementation of plan while optimizing the performance Execution The how to tackle and overcoming the issues & achieve the goals Marketing Plan
- 11. PLANNING PART 3 step by step to set up your KPI ©RioRaditya 11
- 12. ©RioRaditya Two Types of KPI Planning Methods: 12 Benchmarking Method Funneling Method Counting by the previous pattern of similar plan. Counting by the audience journey mindset.
- 13. ©RioRaditya Do you have the previous report of the project? 13 Benchmarking Methods YES NO Do you have several performance report from similar project? YES Analyze & proxy the pattern into your project NO Can you map the consumer's or business’ journey? NO Discuss it with your planner YES Funneling Methods
- 14. ©RioRaditya Two Types of KPI Planning Methods: 14 Benchmarking Method Funneling Method Counting by the previous pattern of similar plan. Counting by the audience journey mindset.
- 15. ©RioRaditya How the benchmarking method works? 15 Finding the baseline of performances through logical ratio Cost/submissions Reach/engagement Cost/submissions YoY Growth Month to Month Growth Cost/Sales Etc Count it with your plan!
- 16. ©RioRaditya Example of benchmarking methods: 16 Situation: You are the marketing manager for a fashion retail shop. The Plan: The marketing team have put 50 mio/month ads to increase the traffic. Question from the owner: Traffic forecast each day for the next 3 months.
- 17. ©RioRaditya Example of benchmarking methods: 17 Data: Previous year, with 5 mio/month ads budget, the traffic are 3 person per day. Benchmarking: Meaning that the estimation of 1 person cost IDR 55.555. Forecast: With IDR 50.000.000 per month, we can get 30 traffic per day.
- 18. ©RioRaditya Example of benchmarking methods: 18 3 person/day = 90 person/month 90 person/month resulted from IDR 5.000.000 5.000.000/90 = 55.555 (Cost per person) IDR 50.000.000/55.555 = 900 Person/months 900 x 3 = 2700 per 3 months 2700/90 = 30 person/day
- 19. ©RioRaditya Example of benchmarking methods: 19 3 person/day = 90 person/month 90 person/month resulted from IDR 5.000.000 5.000.000/90 = 55.555 (Cost per person) IDR 50.000.000/55.555 = 900 Person/months 900 x 3 = 2700 per 3 months 2700/90 = 30 person/day From 5mio to 50mio per month, the budget increase is 10 times bigger (900% increment) By scale, our traffic will also increase 10 times bigger which: 3 x 10 = 30 person/day
- 20. ©RioRaditya Example of benchmarking methods: 20 3 person/day = 90 person/month 90 person/month resulted from IDR 5.000.000 5.000.000/90 = 55.555 (Cost per person) IDR 50.000.000/55.555 = 900 Person/months 900 x 3 = 2700 per 3 months 2700/90 = 30 person/day From 5mio to 50mio per month, the budget increase is 10 times bigger (900% increment) By scale, our traffic will also increase 10 times bigger which: 3 x 10 = 30 person/day Using the “cost per” as a benchmark Using the % growth ratio as a benchmark
- 21. ©RioRaditya Two Types of KPI Planning Methods: 21 Benchmarking Method Funneling Method Counting by the previous pattern of similar plan. Counting by the audience journey mindset.
- 22. ©RioRaditya How the funneling method works? 22 By breaking down the consumer journey, we can forecast the conversion between each funnel. Two things needed to enables this methods: 1. The absolute target for each funnel 2. The conversion rate from one to another funnel Crucial steps: 1. Create or discover your funnel 2. Discover the ideal conversion for each funnel
- 23. ©RioRaditya Example of funneling methods: 23 Situation: You are the marketing manager for a fashion retail shop. The Plan: The marketing team have commit to generate 30 person/day for our store traffic. Question from the owner: How many transaction will happen in a day? Challenge: You are disabled to access the historical transaction data
- 24. ©RioRaditya Example of funneling methods: 24 TRAFFIC / VISITORS SALES 30 person Daily Funnel XXXX
- 25. ©RioRaditya Example of funneling methods: 25 TRAFFIC / VISITORS SALES 30 person Daily Funnel XXXX ?
- 26. ©RioRaditya Example of funneling methods: 26 https://www.getdor.com/blog/2019/12/17/how-to-calculate -and-increase-retail-conversion-rate/ According to dor, a retail analytics company, for a conventional offline stores, the average conversion rate from traffic to transaction is around 20%
- 27. ©RioRaditya Example of funneling methods: 27 TRAFFIC / VISITORS SALES 30 person Daily Funnel 6 transactions 20%
- 28. ©RioRaditya Example of funneling methods: 28 TRAFFIC / VISITORS SALES 30 person Daily Funnel 6 transactions 20%
- 30. ©RioRaditya POP QUIZ!!! 30 “Mungkin gak sih kita menggunakan dua metode tersebut secara bersamaan? Di project yang kayak gimana tuh?”
- 31. ©RioRaditya ANSWER: 31 Sure! Biasanya di project yang multi-objective dan multi-activities. Disini kita di-expect untuk mengukur setiap activity dan juga bagaimana activity tersebut berimpact pada total funnel.
- 32. ©RioRaditya Please note: strong KPI plan always comes with... 32 High Relevance Easy to Measure Simple to Read How relate and representative the indicators with the goals? How easy & accessible the data to analyze after the campaign? Do people easily understand the KPI formulation?
- 33. Q&A PART 4 Got questions & opinions? Let’s discuss~ ©RioRaditya 33
- 34. GAME PART 5 fun exercise to make us remember ©RioRaditya 34
- 35. ©RioRaditya 35 RULES: Prepare a note. Write down the questions. Submit the answers to Rio by today directly in powerpoint. The most interesting answers will get prizes!
- 36. ©RioRaditya Game #1: The Concept 36 Situation: You are a CEO of a company. You are able to lead 3 crucial department: 1. Finance 2. Sales & Marketing 3. Human Resource The Objective: You are asked by the investors to get IDR 10.000.000 revenue per month The Question: You need to write down each division KPIs to achieve the goal.
- 37. ©RioRaditya Game #2: The Counting 37 Situation: You are a brand manager of a cigarette brand. You need to increase your awareness. Objective: Currently, you are on 30% awareness and need to boost it up to 90% in 3 months Data: 5.000.000 reach equals 10% awareness. Questions: How many reach/week you need to achieve to ensure the 3 months objective?
- 38. THANKS~ Prepared by: Rio Raditya Prepared for: SalvoStampd 38