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Telecom Industry Measures Success Through Data and KPIs

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It seems like there is no end of buzzwords in business. From synergy to sustainability to retargeting, the list goes on and on. As we move to a more automated and data driven workforce, there’s one buzzword that seems to rise above the rest, Key Performance Indicator (KPI). It’s consistently driven home that you need KPI’s, and you need to monitor them, but no one ever seems to say what they really are and how they can help your business.

What is a KPI

Per the Oxford Dictionary a KPI is “a quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance”. Put more simply, it’s a measure that shows how well a company is doing at reaching their goals. An example in your personal life would be weighing yourself if you are attempting to lose weight. Your weight would be a measure of how well you are doing at attaining your goal.

Benefits of KPIs

A benefit of a KPI is an immediate measure showing progress towards a goal. Since KPI’s are generally numbers, they’re hard to argue with. If one product or service line produces less income than another (a KPI example) it’s hard to argue with a closer review of the product line or service may need to be done. A KPI makes evaluating outcomes and performance much easier. Using a KPI to evaluate is great, but if the KPI doesn’t inspire action it is practically useless. Going back to the example about weight, it’s not enough to just step on the scale and weigh yourself. Unless you change your lifestyle, your weight is nothing more than a number. The same is true for businesses.

Telecommunications and KPIs

This all sounds great, but how can it be useful in the telecommunications industry? There are obviously KPIs that are useful in every industry, such as net profit margin, net sales, and employee satisfaction rating. Metrics more specific to telecommunications include average revenue per user (ARPU), subscriber acquisition cost (SAC), customer churn, and subscriber growth. Companies can use ARPU to evaluate how well they are using resources and to measure the benefits of bundling services and pricing strategies. SAC can help to measure the impact of marketing and advertising strategies, to better identify what works best for obtaining new customers compared to the cost. Customer churn may help identify problems within your business. If customers are rapidly leaving, that could signify slow and spotty service, along with price sensitivity. Subscriber growth is near and dear to most telecommunication company’s hearts. It’s a strong predictor of future success and thus should be closely monitored.

What’s Next? We can help?

Maner Costerisan can help you through the whole KPI process. We can assist you in identifying which KPI’s should be monitored and by implementing software to measure the KPI’s. Once we establish the KPI’s, we can help you set your goals and offer solutions so you can meet the goals. In almost no time you will get better insight into your business and start making more informed decisions. Contact us to learn more about how Maner can help your business with KPIs.

Dave Henson

dhenson@manercpa.com

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