I’ve probably had ten people in the last week ask me “what does the KPI (in your name) stand for?”.   No, it’s not our initials, nor does it stand for Knowledge, Power, Income (not sure how they came up with that one).  It actually stands for Key Performance Indicator (well, there are a few others like Kuwait Petroleum International).  Wikipedia defines KPIs as:

Financial and non-financial metrics used to help an organization define and measure progress toward organizational goals.

We at KPI Direct are firm believers in the use of KPIs or what we’ll call metrics-based management (so much so that we put the acronym in our name).  You could even go so far as to call us the metrics dorks (that’s how much we like this stuff).   So, after I answer the first question about what KPI stands for, in many cases the next question is “what is a key performance indicator.”

One of my favorite examples is found in Good to Great in the discussion of Walgreens.  One of their keys to success was the fact that they had a clearly defined central metric for their business:  Revenue per customer visit.  Every strategy, every initiative, every department strived to maximize this core metric.  Now, that’s not to say they didn’t look at many other metrics like rev/square foot, merchandising efficiency, repeat visitor revenue, etc. but all of these metrics tied back to their core metric of revenue per customer visit.  From the CEO down to the cashier, everyone knew that if they maximized that core metric, then the business would be in good shape.

I’ll admit that some of this may seem very much like consultant speak - all great in theory, but not useful. I would argue the opposite: clearly defined business metrics allow not only crystal clear insight into your business, but are incredibly practical.  Why? Because every person, vendor, or initiative now can clearly be looked at through the lens of the core metrics.  Whether you are hiring/firing, selecting vendors, or launching a new program you can carefully evaluate, measure, and manage based on your clearly defined metrics.  Believe it or not, your employees and vendors will work better when they know exactly how they’re being measured and how the organization overall is being measured.

What we hope to do over this series of blog posts is dig deeper into what are the metrics (KPIs) by which to manage a direct response business and show how clearly defined metrics make management easier.   Some of the areas we hope to cover include:

• Call Center Metrics
• Media Metrics
• Fulfillment Metrics
• LTV Metrics
• Web Metrics
• Benchmarking Metrics

This list is subject to change - feel free to share your thoughts.

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So here we are.  Post #1 on the KPI Blog.  I’m sure there are many questions bubbling up in your head right now (there are in mine) so let’s just start at the beginning:

Who is KPI Direct? 

We’re a small firm that works with direct-to-consumer marketers.  Kind of a fancy way of saying we work with (some of) the companies who have the 3am TV infomercial where you can “get a free bottle of our fountain of youth supplement just for calling!”  We run campaigns on TV, Radio, Web, Mail and Print.  Generally we stay in the health and beauty category although we’ve chosen to steer clear of certain products within the space (we don’t do the sketchy e-mails that promise to make certain appendages bigger or longer…just not our bag).

Why the heck do you have a blog? 

Good question and I can’t say we have the perfect answer (yet).  What I do know is that there are massive changes in HOW marketing is done as technology continues to evolve.  Part of this shift is the move from outbound (the marketer finds you via TV, Radio, Print, Mail) to more inbound (you find the marketer via web search, blogs, word of mouth, etc.).  Yes, at this point you might be baffled that we (KPI) as true outbound marketers are starting a blog (the epitome of inbound/opt-in marketing).  Well, I guess that’s the whole point - we believe outbound marketing is going to change dramatically with the advent of efficient inbound marketing tools.  We believe a lot of traditional outbound marketers are going to be SOL if they don’t embrace the change.  And we’d like to be at the center of the discussion as the whole thing continues to develop.  We also believe that success in marketing is driven more and more by deep analytics and disciplined execution.  Marketing is becoming much less art and much more science.  If you don’t believe me then look at just a few of the companies succeeding today.

What can I expect from reading the blog? 

Well, hopefully we’ll provide some worthwhile food for thought, some practical case studies of marketing in action.  We plan to share interesting things in our space as well as the general marketing space and hopefully not take ourselves too seriously along the way. Also, please do join in on the discussion (note the little link below that says “comment”- we put it there just for you).

So there it is.  Post #1.  Hopefully many more (and better ones) to come.

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