What are KPIs in business development?
KPIs are measurable values that indicate an organization’s progress toward its strategic goals.
In business development, KPIs help to:
- monitor the success of sales and marketing activities,
- evaluate the efficiency of internal processes,
- identify opportunities and risks in the market at an early stage.
Key KPIs in business development
1st key figure: Revenue growth
Revenue growth is one of the key performance indicators.
It shows how successful the company is in acquiring new customers and expanding existing customer relationships.
Calculation:
Revenue Growth (%) = (Current Revenue − Previous Revenue) / Previous Revenue × 100
2nd key figure: New customer acquisition
This KPI measures the number of new customers within a specific period.
It is particularly important for assessing the effectiveness of lead generation and sales strategies.
3r key figure: Customer Lifetime Value (CLV)
The CLV indicates how much revenue a customer generates during their entire relationship with the company.
It helps to understand the profitability of marketing and sales investments.
Calculation:
CLV = Average revenue per period × Purchase frequency × Customer lifespan
4th key figure: Conversion rate
The conversion rate shows how many leads actually become paying customers.
It is a measure of the efficiency of sales and marketing activities.
Calculation:
Conversion Rate (%) = (Number of Conversions / Number of Visitors) x 100
5th key figure: Churn rate
The churn rate measures how many customers leave within a certain period of time.
A high churn rate can indicate weaknesses in the product, service, or customer management.
Calculation:
Churn Rate (%) = (Customers lost during a period / Customers at the start of the period) x 100
6th key figure: Market share
Market share shows how strongly the company is positioned in comparison to its competitors.
A rising market share is an indication of successful strategies in business development.
Using KPIs correctly
- SMART goals: KPIs should be specific, measurable, achievable, relevant, and time-bound.
- Regular review: Weekly or monthly reviews help to identify trends early on.
- Supplement with qualitative analysis: Numbers alone do not tell the whole story. Customer feedback, market trends, and competitive analyses are important additional information.
- Data visualization: Dashboards and reports facilitate the interpretation of KPIs and improve communication within the team.
Conclusion
KPIs in business development are indispensable tools for measuring the success of strategic measures.
They provide guidance, highlight areas where action is needed, and help to use resources efficiently.
Companies that regularly analyze their KPIs and make decisions based on them ensure sustainable growth and long-term market success.
