If the car of a roller coaster’s functionality shows any questionable signs, the car is removed, scanned for issues, fixed and returned. Meanwhile, the rest of the cars are left to function as intended and the roller coaster’s performance carried on. The same can be said about relying on key performance indicators (KPIs) in business – analyze, adapt, excel.
“A good KPI should act as a compass, helping you and your team understand whether you’re taking the right path toward your strategic goals.” Ted Jackson, the founder of ClearPoint Strategy, explained in a recent blog post.
So, when guiding your teams on how to measure success, what better place to start than a product’s metrics? The lifespan of a product is long and complex, and having a goal to direct focus can not only improve the overall product quality but serve as a beacon on where to exude energy for the greatest payoff.
At well-known grocery retailer Whole Foods, products’ financial outcomes take center stage to guide key decision makers through everything from customer experience improvements to security and legal compliance.
“Every tech initiative we prioritize is tied to a specific business outcome we are aiming to achieve,” Jeff Hartreeve, executive leader of technology services, said.
Looking to weave KPIs into your success strategies? Built In Austin caught up with Hartreeve for more insight on picking the right targets to deliver the best results.
Defining Success for a Product Team
I define success in several ways, the most important being the business outcomes that we drive. Every tech initiative we prioritize is tied to a specific business outcome we are aiming to achieve. These outcomes are typically financial metrics that roll up to either increasing revenue or reducing costs, but may also align to security, legal compliance or customer experience improvements that may not directly tie to financial outcomes.
Our primary measure of success is how well and how quickly the solutions we design and build achieve the business outcomes we set out to achieve. In addition to business outcomes, we also measure success in softer ways such as the health of our working relationships with our business and engineering stakeholders and the satisfaction and growth within our team itself.
Success Metrics
For stakeholder and internal team satisfaction measurement, we use internal surveys to measure our effectiveness. The specific metrics we use to measure business outcome success will vary by project, but the metrics we most typically use to measure success are within our point of sale, supply chain and merchandising space are:
POS
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Cost per transaction: This KPI measures the labor, hardware and support costs needed to process each transaction. It is a good indicator of our checkout efficiency.
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Speed per transaction: This KPI measures the average duration of a transaction of the same basket size over time. Reducing transaction time can lower cost per transaction (less labor for the same throughput) and improves our overall customer experience and the likelihood of repeat visits.
Supply Chain and Merchandising
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Out of stocks percentage: This KPI measures the percentage of products in the store that are not available on the store shelves at designated times during the week. When products are out of stock, we lose sales opportunities and we disappoint customers who may choose to shop elsewhere over time.
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In-store department labor levels: This KPI measures the number of TMs required to perform in-store tasks such as receiving and stocking.
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