Whether you are a data scientist, analyst or business analyst, it is useful to understand what the individual departments actually do. What are their goals, how do they earn their money directly or indirectly, and how can success be measured? It helped me to understand the key figures of the individual departments. This enabled me to help the department in a more targeted way and, above all, to derive further analyses in addition to these standard KPIs. I would like to explain a few of these KPIs and how you can obtain data for them.
Market Analysis
In order to make sales opportunities and decisions for the company, the following key figures are of great importance. One of the most important key figures is the market share. This is calculated by:
dividing the company’s own market share by the total market
Although this is one of the most important key figures, it is of course difficult to calculate. Here, you probably have to resort to sources like statista [1] or something similar. However, if you have found a value for the sales of the total market, for example, you can calculate your own market share approximately with the help of internal data, e.g. an ERP system.
Of course, the same applies to sales growth. Here, the path is the same but measured over a period of time.
Sales Key figures
Sales is, of course, a very important tool. After all, this is where turnover is generated. There are also some common KPIs to measure the success of sales. For example, the success of the offer. This is calculated by the:
success of the offer = number of orders received / the number of offers submitted
Another good indicator is the calculation of the cancellation rate:
Cancellation rate = cancelled orders / total order value
To measure your success of Marketing activities you can calculate advertising success:
Sales growth / advertising costs
This of course are just a few measures you can apply on Sales data but one of the most interesting. To dive deeper you can start for example here. Where can you get the data? If your company uses an CRM system it’s the way to go but also ERP or Order Management systems could be the sources you are looking for.
Online Marketing KPIs
As marketing is becoming increasingly digital, it is possible to extract key figures from the systems. Here some examples:
- Cost per lead
- Order value – What is the average shopping cart value?
- Click-through rate – Is your content getting the attention you want?
- Conversion time: How fast do visitors convert?
- Average time of the visit on the website, etc.
While most of the figures are often already generated by newer systems like online shop software or can be extracted from a database KPIs like Cost per lead will be a bit harder to calculate because you will need in addition the cost of resources used – here, the ERP system and financial module is probably a possible place to start. You can draw inspiration on how to extract and analyze financial data from this article.
Conclusion
Of course, these are only a small number of possible analyses. As a data scientist or analyst, it is certainly helpful to memorize them in order to understand the field of marketing and, above all, to develop possible new approaches.
Sources and Further Readings
[1] statista, Search for Market Share Statistics (2021)
[2] Lucidchart, What’s in your pipeline? The 13 most important KPIs for sales success