Key Terms
A measurable indicator of how well an organization is achieving a desired result.
Key Performance Indicator (KPI).
What are business metrics most commonly used for?
To gain an overall view of the financial situation of a company.
This KPI shows profit compared to overall sales.
Net Profit Margin.
This KPI measures the value of a customer over their lifetime.
Customer Lifetime Value (CLV).
Give one example of an agricultural KPI.
21-day weaning weight, days to market weight, or feed efficiency.
A visual representation of KPIs that can be quickly interpreted.
Dashboard.
Analyzing this helps determine pricing and profit margins.
Cost of Goods Sold
What KPI measures total production costs to help set pricing?
Cost of Goods Sold (COGS).
A KPI showing how much it costs to recruit a new customer.
Customer Acquisition Cost (CAC).
How can yield per acre/cost per acre be useful to farmers?
Helps determine crop profitability and guide future decisions.
The process of gaining new customers through advertising or recruitment.
Customer Acquisition.
To be successful, a KPI must follow this acronym.
SMART (Specific, Measurable, Attainable, Relevant, Time-bound).
This KPI tracks how regions are performing in sales.
Sales by Region.
An indicator of how likely customers are to recommend your business.
Net Promoter Score (NPS).
What process uses tech and data to make site-specific decisions in fields?
Precision Agriculture.
A discussion between an employer and an employee leaving a business to gauge satisfaction.
Exit Interview.
What is profit margin?
The difference between the money charged for a product and the cost of making/selling it.
Give one example of a financial KPI and explain why it’s useful.
Net Profit Margin—it shows profitability per sale.
This KPI measures the number of employees leaving a business over time.
Employee Turnover Rate.
Why are KPIs important in agriculture?
They help producers track efficiency and profitability in crops and livestock.
The ability of an animal to convert feed into muscle, reported as pounds of feed per pound of gain.
Feed Efficiency.
How do business metrics help managers with small problems?
Metrics allow managers to pinpoint small problems before they develop into larger ones.
What can dividing yield per acre by cost per acre tell farmers?
What each bushel of crop costs to produce.
Name one way employee satisfaction is measured.
Surveys or exit interviews.
Explain one agricultural KPI in detail and why it is useful.
(Example: Feed efficiency shows how well animals convert feed into muscle, helping producers maximize profitability.)