Key performance indicators - Google Cloud Platform Tutorial

- Before we dive right into dashboards, let's take a step back and figure out what we really need to know about our business. The best way to understand how well the company is performing is to create metrics that we can track over time. These metrics are important when it comes to making decisions quickly. Metrics can be a part of key performance indicators for your company. According to KPI.org, key performance indicators are the critical keys of progress toward an intended result. And they provide focus for strategic and operational improvement. You may have heard of the phrase being data driven. The goal of data driven decision making is to use these important metrics and KPIs to guide strategic business decisions that support the goals of the company. So what are some examples of key performance indicators? Well, that varies a lot depending on your industry. Let's take a look at some examples. We definitely want to keep track of how much money we make. Why else are we in business? So we may want to track revenue per month. This is the amount of money the company has received for each month, and most likely, we will want to see this trend over time. You may want to look at customer acquisition costs. These are the marketing costs associated with attaining a new customer. We can store this information by keeping a log of our marketing activities and costs and the number of new customers during a specified period of time. We'll definitely want to see how these change over time as well. You may also want to track the number of potential clients you gain each month. So we'll look at new customer referrals. This is the number of new referrals from different sources within a specified time period. For example, we may get new referrals from our website or social media or maybe referred by another customer. With this metric, you can also track the conversion rate or how many referrals turn into customers. By looking at this metric, we can tell if we need to improve existing relationships or find new referral channels. All of your key performance indicators can be compared to a benchmark. The benchmark may be your past performance, competitors' performance, or another important metric in your industry. KPIs will also change over time as your business grows, as well as from changes from external factors, like the economy and world events. Later in the course, we'll discuss how to create measures and dimensions to support these metrics in our business intelligence software, including Google Data Studio.