What Are Key Performance Indicators?
Key performance indicators or KPIs are essential for businesses of all sizes to quantify their progress against key goals. By measuring success against KPIs, businesses can see the impact of their strategies over time and identify areas of weakness or opportunity, with insights that are backed up by actual data rather than assumptions. KPIs allow managers to better focus their employees work and adapt if certain goals are not being met, and the more often they are measured, the more quickly businesses can see if they are off track and change course. Common KPIs for marketers might include website metrics such as unique visitors and bounce rate, while sales-focused KPIs often include revenue numbers, lead conversion rate, and sales cycle length.
Of course, KPIs are also tailored to industries, with certain industries placing more emphasis on certain metrics than others. Humanitarian aid groups, for example, may measure vaccination levels in a specific region, or the accessibility to clean water, while brands focus on their awareness and perception among key audience groups.
FMCG And CPG KPIs
Fast-moving consumer goods (FMCGs) and consumer packaged goods (CPG) such as snack foods, soft drinks, cleaning products, and cosmetics, make up more than half of all consumer spending, and FMCG companies have a huge number of KPIs to track – each product they sell, region they sell in, and even store location may have unique KPIs. FMCG companies also examine the supply chain that gets their goods from the raw materials to the store, in order to identify inefficiencies, costs, and other issues within the supply chain. FMCG KPIs often include metrics such as:
- Stock levels per store
- Average time to sell
- Product margins
- Shelf visibility and availability
- Supply chain costs
- Fulfilment metrics
- Brand preference vs competitors
- Sustainability information
Measuring these metrics includes detailed analysis of point-of-sales data from stores and regions, deploying secret shoppers to take pictures of goods and note expiration dates of products, and gathering data on every part of the supply chain. In order to measure some KPIs, such as those around sustainability, FMCG and CPG brands may even need to reach those farming the raw ingredients for their product, such as coffee, tea, and cocoa beans. Gathering data from this last mile of the supply chain can often be challenging due to how disconnected individual farms often are from the brands selling their goods- and this is especially the case in regions such as Africa, where smallholder farmers make up the majority of the farming population.
Measuring Fast-Moving Consumer Goods KPIs In Africa
The FMCG market is huge in Africa: Two-thirds of the continent’s $1.4 trillion retail spend in 2016 was on FMCG, and brands such as Unilever, Diageo, and Coca Cola are investing heavily in the region. Africa is reported to have the fastest-growing beer market in the world, and Diageo recently announcing a $200 million investment into breweries powered by renewable energy across Africa.
But with this investment have come unique challenges associated with quantifying progress against FMCG KPIs in countries such as Nigeria, Kenya, and South Africa. Many goods in Africa are sold through informal trade markets and street hawkers who do not have the advanced point of sales systems that are present across the US and Europe, so large brands have little insight into where their products are sold, how much inventory each vendor is carrying, and how their products are placed compared to competitors. Rather than relying on data reports from chain stores, they must gather data themselves from thousands of individual sellers.
Until recently, this has been a nearly impossible feat due to the lack of communication with these sellers, but as mobile penetration has grown in cities such as Lagos and Nairobi it has become more feasible to collect data on KPIs from dispersed sellers. Through mobile-phone surveys, FMCG brands can gather data directly from informal traders by sending regular surveys asking about stock levels and pricing. GeoPoll can also deploy consumers to store locations to take pictures of goods as they are on shelves, giving brands a more accurate depiction of their goods than they have had before. Focus groups, traditionally conducted in-person, can also be conducted via the mobile phone so that FMCGs can get rich, qualitative data on how consumers are using their products.
As technology adapts and improves across Africa and the rest of the globe, FMCGs will have even more data points with which to measure their key performance indicators. To learn how GeoPoll can deploy innovative solutions for KPI tracking in Africa and other emerging regions.