Thursday, March 23, 2006

Key Performance Indicators for eBay ….. Staying Focused .

How's the business doing ? Was a question often asked of me when I was General Manager of a £16 million business. I was accountable to a number of people not least of which was the Chief Executive who summoned me down to HQ near London every month for an assessment of the KPI's ( Key Performance indicators)

Having a set of indicators ( or Measures ) certainly kept me focused on the task . Measurement is vital if you are to track your success . Even more vital though is having the right set of indicators , it is pointless measuring something if it has little effect on the Mission of the business .

So I bet you have guessed already where I am going with this . How about a set of KPI's for my eBay business adventure . Over the next few days I will be formulating some indicators , broken down into four quadrants .

Financial Indicators ( Aimed my monetary targets)

Customer Care Indicators ( Is my customer completely satisfied )

Process Indicators ( The efficiency of my eBay processes)

People Indicators ( For me this will be the balance between eBay/work/family...or if you have an eBay business with staff, then it will be about their motivation & development)

I am proposing to publish these indicators on my blog in the first week of every new month ...So you ,the reader will be my Chief Executive ... I will be accountable to you ...

If you like the idea ..and fancy setting up your own set of indicators .Then why not join in the fun and do the same either in the comments section or on your own blog ( Mark/Andrea/ Pamela are you up for it ...Linda I know you don't have a blog but you are welcome to my comments section ...there is no nicer commentator than you :-)


Linda said...

Rob, there is no nicer blogger than you, and if I respond nicely, it's because you definitely know how to treat people - this trait should help you reach your "customer care" indicator with no problem!

About KPI's...the hardest thing in establishing these is the "benchmark." The financial benchmark should be relatively simple since it will probably be an arbitrary determination, but the others aren't so transparent. Another easy one for the eBay environment is "customer care" in that you can use your positive feedback percentage as your benchmark...right now you're at 100% positive, and you've established that as your benchmark. Could you enhance that by getting people to add you to their favorite sellers list? (as one example)

Another eBay benchmark could be number of hits your auctions receive. You can click on the Andale free counters and stats link, and it'll show you whether you're getting average, above average, or below average hits. This might speak to a KPI of "quality" - using accurate descriptions, good photos, good titles, and so on.

Benchmarks are so important because if you don't have them, you can't measure KPIs. Let' take Process Indicators - what benchmark are you measuring against? How will you know that you've reached the level of efficiency that you need? Will that level of efficiency tie into your profit margin? For instance, if your profit is X pounds, and your time is X minutes per auction, and you've assigned yourself a monetary hourly rate, what then is your profit margin? If you decrease the time it takes to post an auction, you should then increase your profit margin.

For productivity measures, the first thing I had to do (a long time ago) was find that benchmark amongst a group of people by measuring their known output against time so I could establish realistic KPI's (or KRA's). It took me a year to do that. But, in the end I had come up with a set of benchmarks for a variety of functions that were reasonable, and "average." It was this average that people had to beat in order to move up the scale. This forced an attention to technique and created an environment where people were always looking for ways to improve in both efficiency and "quality," which is yet another KPI. (I wouldn't go the Zero Defects route though - I think that's an absurd KPI to have, although the Japanese seem to do very well at this).

One final thing - we called them KRA's...Key Result Areas...I think it's important to understand that it's results you're looking for, and not to define tasks. The KPI or KRA should never include tasks. Example: The financial KPI shouldn't be coupled with something like, "list 20 auctions a day." Listing 20 auctions a day might help you reach a quota you've set, but it won't necessarily improve your financial situation.

Anyway...I think you probably get the idea.

Now I have to think about mine!!! Right now, my KPIs are pretty up my feedback, establish my business, acquire clients...


rebay said...

Linda ..Its good to know that someone talks my language

Your Benchmarks I called " secondary indicators" with the main headliner indicators ( the ones the CEO was interested in ) calle the TLI's ( top Level Indicators )

Don't business people just love acronyms :-)

I worked for Sony for 7 years so I know all about Zero Defects

I expect you will be an avid follower of my indicators when published

Thanks once again for your informed input


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