Key performance indicators (KPIs) are specific and quantifiable measurements of performance in a business. They can provide critical business insights and illuminate opportunities for greater success.
Without KPIs, many small businesses fall into the trap of treating the symptoms of problems rather than understanding the root causes. The same holds true when it comes to evaluating successes; they respond in an ad-hoc manner, attempting to replicate positive results and avoid repeating negative ones, without a clear picture of the key factors that produced those results.
KPIs
Once you’ve established and started monitoring KPIs, you can identify hurdles to meeting your business objectives and gain insight about potential improvements to your practice. They help give you a clear picture of the variables impacting your success. Specific KPIs are typically determined by the core stakeholders of an organisation and, when applied effectively, they serve as a compass for navigating strategy to meet goals. One of the most revealing metrics for eye care professionals is revenue per exam.
Revenue per examination
Comparing the revenue per eye examination to a nationwide benchmark, such as the current median of $306 per complete eye examination,1 can help you determine whether you need to drill more deeply into the variables and processes that underpin it, including the type of spectacle lenses, frames, and contact lenses used, exam fees, and the sales performance of staff.
Revenue per staff hour
Another valuable KPI is gross revenue per staff hour, calculated by dividing your gross revenue for a specified time period by the total number of non-lab staff hours worked in that same period. The result will demonstrate top performers and staff efficiency with patients, and help you determine the optimal number of staff.
Consistency and application
To unlock the power of KPIs, use them consistently and be diligent about communicating findings to staff, as well as articulating how those findings map back to goals and strategies. Sporadic temperature-taking will do little to enhance your (or your staff’s) understanding of the state of your business. Similarly, failing to incorporate KPIs into actionable items will render those actions futile. However, when applied consistently and integrated into a strategy, KPIs can become insightful tools that set expectations for performance, cultivate transparency, and ensure that you and your team are working together toward shared goals.
1 Management & Business Academy for Eye Care Professionals. Key metrics: assessing optometric practice performance. Practice Advancement Associates, sponsored by Essilor. 2015. Available at: http://ecpu.com/media/wysiwyg/docs/paa_keymetrics_0415.pdf. Accessed July 5, 2016.