The Most Important KPI in Modern Tech
When Intel first incorporated in 1968, its business plan consisted of three very short and very vague paragraphs, but it was enough to secure them $2.5 million in funding to get the company started. Since then, the tech landscape has exploded with visionaries and enterprises with more specific goals and endeavors, like bringing digital efficiencies to governments, businesses, and consumers around the world. That exponential growth continues today as tech companies are increasingly occupying a larger fraction of the GDPs of many developed countries.
The KPIs driving these businesses have remained relatively consistent and in lockstep with other industries. Any space, from energy to materials to agriculture, demands solid fundamentals coupled with a significant addressable market and financial strength. The principles of capitalism haven’t changed too much, even if the world has. Business analytics, however, have evolved significantly, and companies are able to analyze their performance across a vast array of modern metrics, charts, and tables.
Tech organizations have the capacity to track all sorts of data to establish benchmarks and measure progress. Some of these include YoY revenue growth, EBITDA, forward looking projections, and P&L statements. It’s a friendly and collaborative industry on the surface, but companies are constantly competing for market share, consumer spending, and investment capital. Identifying areas of strength or weakness at any time can give companies an edge over competition.
While financial professionals can generate endless amounts of data-driven insights, the most successful tech giants allow only a handful of key parameters to guide their activities. In fact, one in particular stands out as an indicator of a company’s potential: customer success.
Customer success has been, and will continue to be, the most important KPI to assess a company’s performance, viability, and potential to effectively innovate and expand. Even if P&L’s are attractive, unless a company consistently demonstrates their value to customers, they will not have long-term viability.
When Apple released the Macintosh in 1984, its popularity propelled user-centric technology. The focus of companies shifted from simply creating cutting edge technologies to first identifying consumer demand and figuring out how to deliver it in the simplest way possible. This gestated the tech industry as we know it today: Fitting your product to meet existing customer needs instead of telling consumers why they need your product. The most successful enterprises are those solving unique consumer and business challenges.
I’ve encountered a sentiment in my industry that suggests only KPIs are concretely measurable while customer success is more abstract or qualitative. I respectfully disagree. Of course, KPIs are measurable. Find out where your customers were successful as a direct result of being your customer, and create KPIs to measure this success. Here are a few questions to get you started:
- What percentage of your customers are truly benefiting from the core value of your technology?
- How satisfied are they with the value you are providing them?
- How many hours / how much money did your product or services save them?
Unfortunately many new companies aren’t unlocking their fullest potential because they’re too focused on peripheral and often self-fulfilling metrics.
Many companies are founded on grandiose visions to improve the world, but how many of them can maintain that vision when confronted with bottom lines? Sources of investment and funding demand baseline expected ROIs which can run in direct conflict with a company’s initial values. Prioritizing customers is imperative, even if that demands investing more in areas such as UX and product development over branding and marketing.
In an industry whose sole existence is to enhance lives with software, customer satisfaction should be the primary driver of business operations. Whenever I’m asked about how business is doing, my immediate response is some variation of, “All of our customers are happy.” It’s the only answer that matters. Successful customers will lead to a successful business.
Finnovate.io is a technology company focused on helping organizations build unique digital experiences on web, mobile and blockchain. Finnovate.io offers development services, training, consulting, as well as a platform that rapidly turn paper based content into interactive experiences.
