Revenue Is Not A Kpi
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With a hierarchy of measures we can see why revenue is not a good kpi.
Revenue is not a kpi. I bet most of us learning about key performance indicators kpis and business metrics are doing it to complement our jobs. Everything on the bottom level in red is an individual kpi. Everything in black type in the third diagram is an aggregate measure compiled from the measures below it. Revenue growth as the name implies is an increase in your company s sales usually compared to your previous quarters revenue performance.
We re just folk looking to take accountability for our performance. Revenue is an aggregate measure. This is different from profit is something you should always be tracking. In other words we re not data or business analysts.
The revenue number can hide successes as well as problems and it tells you little about your customers.
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