How is your Product Portfolio? Which KPIs are you using?

A Product Portfolio (including services) is like fruit, it rots if neglected.

Unlike this 'well-known' artist's portfolio! OK, Nick's watercolour won't set any auction records, but you get the point 👨‍🎨 😊 

A firm's product KPIs, must be monitored and reviewed continuously, along with their marketplace. This ensures they remain relevant for the changing market, to customers' requirements and needs, and the firm's strategic priorities.

Monitoring the competitive environment, supply chains, regulations, and all the other PESTLREEM factors, risks and stakeholders, is essential to the portfolio maintaining its market position.

The government ONS 2024 survey of 287,863 UK firms, confirms UK SMEs are poor at using KPIs, many monitoring none or only half a dozen. These will typically be the most basic, the firm's monthly revenue, cash flow balance, profit margins, and maybe average order value. 

The ONS survey reports leaders claim the biggest barriers to improve management is a lack of time. However without 'knowing your numbers', improvements are guesswork. This is the basis of Quality, Environmental and H&S management, yet neglected for the individual products.

However the process of recording these numbers for each product and service, will often get staff making small improvements unprompted.

In addition to high-level financial KPIs, which accountants should be monitoring, there's a large selection of Product Management KPIs, dependent on the products, including:

KPIs for each Service Product:

Revenue Growth Rate

Gross Profit Margin (%)

Net Profit Margin (%)

Customer Retention Rate (%)

Customer Churn Rate (%)

Net Promoter Score (NPS)

Average Contract Value (ACV)

Billable Utilization Rate (%)

Time-to-Value (Days from sale to first delivered benefit)

Support Ticket Volume per 100 Customers

KPIs for each Tangible Product:

Sales Volume (Units Sold)

Revenue Growth Rate

Gross Profit Margin (%)

Inventory Turnover (COGS ÷ Average Inventory)

On-Time Delivery Rate (%)

Defect Rate per 100 Units

Customer Complaint Rate (Complaints ÷ Units Sold)

Average Selling Price (ASP)

Market Share (%)

New Order Intake (Value of Orders Received)

There a many more, these being just a taster. It's key to select the most appropriate to your business. Just a important is that gathering, calculating, storing and retrieving them is simple, so that doing so is easy and even a pleasure. That way, you're most likely to use them, at a minimal cost to the business.

Which are your top Product KPIs?