By monitoring KPIs, managers can identify high-performing products that deserve further investment and underperforming ones that may need reevaluation or discontinuation. This enables efficient allocation of resources across the portfolio to maximize ROI and ensures alignment with the overall business strategy. Furthermore, KPIs facilitate communication with stakeholders by offering clear, data-driven insights into portfolio performance, fostering transparency and accountability within the product management process.
KPI |
Definition
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Business Insights [?]
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Measurement Approach
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Standard Formula
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After-Sales Service Satisfaction More Details |
The level of customer satisfaction with the service and support provided after the sale of a product.
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Reveals customer satisfaction with support services post-purchase, highlighting areas for improvement in customer care.
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Considers customer feedback scores, resolution times, and number of issues resolved on first contact.
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Average customer satisfaction score from service surveys or feedback forms
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- An increasing after-sales service satisfaction may indicate improved customer support processes or product quality.
- A decreasing satisfaction level could signal issues with post-sale support, product performance, or customer expectations.
- Are there common themes or recurring issues in customer feedback regarding after-sales service?
- How does our after-sales service satisfaction compare with industry benchmarks or competitors?
- Implement customer feedback mechanisms to identify areas for improvement in after-sales service.
- Invest in training and development for support staff to enhance their ability to address customer needs effectively.
- Utilize technology to streamline after-sales service processes and provide timely support to customers.
Visualization Suggestions [?]
- Line charts showing the trend of after-sales service satisfaction over time.
- Pie charts to visualize the distribution of satisfaction levels across different product categories or customer segments.
- Low after-sales service satisfaction can lead to negative word-of-mouth and impact brand reputation.
- Consistently low satisfaction levels may indicate systemic issues that require significant organizational changes.
- Customer relationship management (CRM) software to track and manage customer interactions and feedback.
- Survey and feedback tools to gather and analyze customer satisfaction data.
- Integrate after-sales service satisfaction data with product development processes to address recurring issues in future product iterations.
- Link customer satisfaction metrics with employee performance evaluations to incentivize a customer-centric approach.
- Improving after-sales service satisfaction can lead to increased customer loyalty and repeat purchases.
- Conversely, declining satisfaction levels may result in customer churn and reduced lifetime value.
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Average Margin per Product More Details |
The average profit margin across all products in the portfolio, giving a sense of overall profitability.
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Indicates profitability of individual products, helping prioritize sales focus and production resources.
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Accounts for the selling price minus the cost of goods sold, divided by the selling price.
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(Selling Price - COGS) / Selling Price
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- Increasing average margin per product may indicate successful pricing strategies or cost-saving measures.
- Decreasing margin could signal increased competition, higher production costs, or pricing inefficiencies.
- Are there specific products with significantly higher or lower margins than the average?
- How does our average margin per product compare with industry benchmarks or historical data?
- Regularly review and adjust pricing based on market conditions and cost fluctuations.
- Focus on cost reduction initiatives such as improving operational efficiency or renegotiating supplier contracts.
- Invest in product innovation and differentiation to justify premium pricing and maintain healthy margins.
Visualization Suggestions [?]
- Line charts showing the trend of average margin over time.
- Pareto charts to identify products contributing the most to overall margin and those with the lowest margins.
- Declining average margin may lead to reduced profitability and financial instability.
- Overreliance on a few high-margin products may pose a risk if market conditions change or competition intensifies.
- Financial management software like QuickBooks or Xero for tracking and analyzing product margins.
- Cost accounting systems to accurately allocate costs and assess the true profitability of each product.
- Integrate with sales and marketing systems to understand the impact of pricing and promotions on margins.
- Link with procurement and supply chain systems to optimize sourcing and production costs.
- Improving average margin per product can lead to increased overall profitability and financial stability.
- However, aggressive margin improvement efforts may impact sales volume and market competitiveness.
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Cost of Goods Sold (COGS) More Details |
The direct costs attributable to the production of the goods sold in the product portfolio, including materials and labor.
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Reflects the cost efficiency of production processes, and impacts pricing and profitability.
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Sums direct costs related to production including labor, materials, and manufacturing overhead.
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Sum of all direct costs related to production
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- Increasing COGS may indicate rising material or labor costs, impacting profit margins.
- Decreasing COGS could signal improved production efficiency or cost-saving measures.
- Are there specific products with disproportionately high COGS that need to be addressed?
- How does our COGS compare with industry benchmarks or cost trends in raw materials and labor?
- Regularly review and negotiate supplier contracts to manage material costs.
- Implement lean manufacturing principles to reduce waste and improve production efficiency.
- Invest in automation technologies to streamline labor-intensive processes and reduce labor costs.
Visualization Suggestions [?]
- Cost breakdown pie charts to visualize the proportion of COGS attributed to materials and labor.
- Trend line graphs to track changes in COGS over time and identify cost-saving or cost-increasing trends.
- High COGS can lead to reduced profitability and competitiveness in the market.
- Significant fluctuations in COGS may indicate supply chain vulnerabilities or production inefficiencies.
- Enterprise resource planning (ERP) systems to track and analyze production costs and material usage.
- Cost management software to monitor and control expenses related to production processes.
- Integrate COGS data with financial systems to understand the impact on overall profitability and cost structure.
- Link COGS analysis with product lifecycle management to make informed decisions about product pricing and development.
- Reducing COGS may improve profit margins but could require upfront investments in technology or process improvements.
- Significant increases in COGS may necessitate price adjustments or strategic shifts in product offerings.
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CORE BENEFITS
- 39 KPIs under Product Portfolio Management
- 15,468 total KPIs (and growing)
- 328 total KPI groups
- 75 industry-specific KPI groups
- 12 attributes per KPI
- Full access (no viewing limits or restrictions)
FlevyPro and Stream subscribers also receive access to the KPI Library. You can login to Flevy here.
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Cross-Selling Ratio More Details |
The effectiveness of efforts to sell additional products to existing customers within the portfolio.
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Shows the effectiveness of marketing and sales strategies in selling additional products to existing customers.
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Measures the number of cross-sell products sold per transaction.
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Number of Cross-Sell Products Sold / Total Number of Transactions
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- An increasing cross-selling ratio may indicate successful marketing efforts or a growing product portfolio that meets diverse customer needs.
- A decreasing ratio could signal ineffective cross-selling strategies or a lack of new products to offer existing customers.
- Are there specific customer segments or product categories that respond better to cross-selling efforts?
- How does our cross-selling ratio compare with industry benchmarks or competitors?
- Train sales and customer service teams to identify cross-selling opportunities and effectively communicate additional product benefits to customers.
- Regularly update and expand the product portfolio to provide more cross-selling options for existing customers.
- Implement customer relationship management (CRM) systems to track customer preferences and purchase history for targeted cross-selling.
Visualization Suggestions [?]
- Line charts showing the trend of cross-selling ratio over time.
- Pie charts to visualize the distribution of cross-selling success across different product categories or customer segments.
- A low cross-selling ratio may lead to missed revenue opportunities and underutilization of the existing customer base.
- Overly aggressive cross-selling tactics can lead to customer dissatisfaction and potential churn.
- CRM software with cross-selling modules to track and manage customer interactions and opportunities.
- Data analytics tools to identify patterns and preferences that can guide cross-selling strategies.
- Integrate cross-selling ratio analysis with customer relationship management systems to align sales efforts with customer preferences and behaviors.
- Link cross-selling data with inventory and supply chain management to ensure the availability of additional products for cross-selling.
- Improving the cross-selling ratio can lead to increased customer lifetime value and overall revenue growth.
- However, overly aggressive cross-selling may impact customer satisfaction and brand reputation.
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Customer Churn Rate More Details |
The percentage of customers who stop using or do not renew their use of a product within a given period.
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Identifies customer retention issues and can point to reasons behind customer turnover.
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Calculates the percentage of customers lost over a specific period.
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(Number of Customers at Start of Period - Number of Customers at End of Period) / Number of Customers at Start of Period * 100
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- An increasing customer churn rate may indicate issues with product quality, customer service, or competitive offerings.
- A decreasing rate could signal improved customer satisfaction, product innovation, or effective retention strategies.
- Are there specific products or features that are leading to higher customer churn?
- How does our customer churn rate compare with industry benchmarks or with competitors?
- Enhance customer support and engagement to address issues leading to churn.
- Regularly gather and act on customer feedback to improve product features and overall experience.
- Implement loyalty programs or incentives to encourage customer retention.
Visualization Suggestions [?]
- Line charts showing the trend of customer churn rate over time.
- Pie charts to visualize the distribution of churn reasons or customer segments.
- High customer churn rates can lead to revenue loss and damage to brand reputation.
- Consistently high churn may indicate fundamental issues with the product or customer experience that need urgent attention.
- Customer relationship management (CRM) software to track and analyze customer interactions and feedback.
- Customer feedback and survey tools to gather insights into reasons for churn.
- Integrate customer churn data with sales and marketing systems to identify patterns and triggers.
- Link churn rate with product development and quality assurance processes to address underlying issues.
- Reducing customer churn can lead to increased customer lifetime value and overall revenue growth.
- However, efforts to reduce churn may require additional resources and investments in customer retention strategies.
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Customer Lifetime Value (CLV) More Details |
The total revenue a company can expect from a single customer account throughout the business relationship, considering the product portfolio.
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Helps in understanding the long-term value of customers and informing marketing spend and customer service strategies.
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Estimates the total revenue a business can expect from a single customer account throughout the business relationship.
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(Average Purchase Value * Purchase Frequency) * Customer Lifespan
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- Increasing CLV may indicate successful customer retention strategies and product portfolio expansion.
- Decreasing CLV could signal declining customer satisfaction or ineffective product offerings.
- What factors contribute to the increase or decrease in CLV for different customer segments?
- How does the CLV of new customers compare to that of long-term customers?
- Implement personalized marketing and customer loyalty programs to increase CLV.
- Regularly review and update the product portfolio to meet changing customer needs and preferences.
- Invest in customer service and support to enhance overall customer experience and retention.
Visualization Suggestions [?]
- Line charts showing CLV trends over time for different customer segments.
- Pie charts illustrating the contribution of different products to overall CLV.
- Low CLV may indicate a high customer churn rate and the need for improved customer relationship management.
- Over-reliance on a few high-value customers may pose a risk if they are lost or reduce their spending.
- Customer relationship management (CRM) software to track customer interactions and purchasing behavior.
- Data analytics tools for customer segmentation and predictive modeling to forecast CLV.
- Integrate CLV data with sales and marketing systems to align efforts with high-value customer segments.
- Link CLV analysis with product development to prioritize offerings that align with high CLV customer preferences.
- Increasing CLV can lead to higher overall revenue and profitability.
- However, focusing solely on CLV may neglect the needs of lower-value customers and impact overall market share.
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In selecting the most appropriate Product Portfolio Management KPIs from our KPI Library for your organizational situation, keep in mind the following guiding principles:
It is also important to remember that the only constant is change—strategies evolve, markets experience disruptions, and organizational environments also change over time. Thus, in an ever-evolving business landscape, what was relevant yesterday may not be today, and this principle applies directly to KPIs. We should follow these guiding principles to ensure our KPIs are maintained properly:
By systematically reviewing and adjusting our Product Portfolio Management KPIs, we can ensure that your organization's decision-making is always supported by the most relevant and actionable data, keeping the organization agile and aligned with its evolving strategic objectives.