Are your KPIs measuring your association’s most critical challenges?
As the challenges facing your organization change, so must your approach to strategic decision making to stay relevant in today’s environment. A study by ASAE Foundation found that 89% of association leaders considered performance measurement important to an association’s success.
Measuring the right key performance indicators (KPIs) for you organization is critical. Your KPIs should be directly related to your strategic competitive advantage and your current challenges. Some KPIs currently used by associations include:
membership retention, satisfaction, and engagement
participation in education programs
event attendance
non-dues revenue
content, communications, and marketing effectiveness
net operating ratios, revenue, reserves, profits, and liquidity
By taking a more business-mined approach to analytics and intelligence, you will be able to identify new opportunities to:
improve member engagement.
increase member acquisition and retention.
get more non-dues revenue.
Findings from the 2018 Strategic Measurement Global Executive Study and Research Project by MIT Sloan Management Review and Google offers insights that can be used by nonprofit organizations and associations. More traditional marketing performance measures, such as campaign effectiveness or click-through conversions, are giving way to more customer experience- and advocacy-oriented metrics.
The study revealed six behaviors common to advanced users of KPIs:
Use KPIs to lead, as well as manage, the enterprise.
Develop an integrated view of the customer.
See KPIs as data sets for machine learning.
Drill down into KPI components.
Share trusted KPI data.
Aim for KPI parsimony.
Associations can create distinct competitive advantages by making the shift to data-driven, customer experience- and advocacy-oriented metrics.
Key performance indicators are defined as “the quantifiable measures an organization uses to determine how well it meets its declared operational and strategic goals.” To get the most value from your KPIs, the first step is to keep in mind the “K” for “Key” and create an organizational cultural focused on measurable and actionable KPIs that align with your overall strategy. Identifying 3-5 KPIs that align to your mission and objective will help communicate and guide organizational decision-making.
Mukul Deoras, chief marketing officer, Colgate-Palmolive says there’s a need to winnow down to the few indicators that will help drive growth:
“The biggest challenge that we have today is to sift through tons of meaningless KPIs, focus on really those few, and not get carried away. Just because we can measure everything does not mean we need to measure everything. We just need to focus on a few things that are really going to make a big difference to our business.”
Shifting focus to member-oriented key performance indicators can effectively align employees and processes to serve your membership and brand purpose. Some of these KPIs to help create a holistic view of your target member include:
Net promoter score (NPS)
Member lifetime value
Brand equity
Churn
These are high-level KPIs that help align the entire organization and help drive strategic planning. Equally important to being able to use these KPIs to drive day-to-day decision making is the ability to drill down into the KPI components and have them collected in real-time.
In this increasingly noisy and customer-centric environment, your members will only engage with those organizations that bring them value. Associations that take these lessons from the business world and apply them in way that aligns with the mission and goals of the organizations will be able to reap the benefits of higher membership engagement and increased revenues.