Strategic KPI’s for TBL in Sales and Marketing Memo
People: How can the company provide an environment of learning and growth to its employees and be a global contributor to the communities it operates in?
Addressed in the letter from the CEO, this company is looking to focus on building a more diverse and inclusive workforce and looking to reduce employee turnover utilizing feedback on employee engagement. In addition, the company is looking to give back to the communities in which it serves as a commitment to corporate social responsibility.
Planet: How do the actions of the company and/or any partnerships of the company impact the environment?
The company recognizes that there are many opportunities to reduce its environmental impact. Some suggestions made in the letter from the CEO include looking for suppliers who package products sustainably, shifting investments towards companies that actively address environmental issues, and continuing the ‘go paperless’ initiative.
Profit: How can the company become the leading brand in the industry while increasing production of healthy, high-quality, and sustainable products?
While profitability has always been known as the sole measure of business success, the company is looking to quantify social and environmental measures and examine how they impact profitability. The idea is to sustain growth and profitability while meeting CSR goals.
KPIs of Successful Strategy Development and Implementation
Employee Retention Rate
Employee retention means to keep talented employees in the company and reduce employee turnover. This key performance indicator measures the retention of certain employees over a specified period of time and is often used in conjunction with employee turnover rates to give a complete view of staff movement. A basic formula to calculate employee retention is the number of employees who remained employed for the entire specified measurement period divided by the number of employees at the start of the measurement period. This value is then multiplied by 100 to create a percentage (Maurer, 2017). One of the goals outlined in the CEO letter was to reduce employee turnover, or in other words, increase employee retention rates. Per the SWOT Analyses from Sales and Marketing, both departments experience high turnover rates within their respective teams. As people are seen as the social bottom line in the TBL structure, measuring employee retention rates is a vital piece to this company achieving its goal of committing to a Corporate Social Responsibility initiative.
Sales and Marketing departments are undeniably interconnected in the company. Marketers develop strategies around product, price, distribution, and promotion to increase a company’s sales or profitability (Spiliakos, 2018). People are the societal aspect of a TBL plan. Seeing as one of the key strategies described in the company’s TBL plan for societal impact is providing an environment of learning and growth for employees, measuring employee retention could be an indicator of whether or not the company is working towards fostering said environment.
Material recyclability is working towards sustainable packaging where not only is there an environmentally sensitive design to the packaging, but there is also a system in place to collect and recycle packaging at the end of its use (Markgraf, 2016). This KPI is a measure of the percentage of material recycled in each package used by the company. One of the goals outlined in the CEO letter was to reduce the company’s environmental footprint. Measuring material recyclability aligns with the key strategies outlined in the Triple Bottom Line Plan as the company is looking to innovate products and packaging in a fully sustainable manner and looking to promote a platform of reusing and recycling. In the measurement of environmental impact within a TBL Plan, the interconnectedness of marketing and sales again have a large impact. Marketing efforts must ensure that the company actually operates towards environmental good, and these efforts must be economically sustainable (Turletti, 2019). Marketing will help bring environmental impact planning and management into action. Working alongside Marketing, Sales is presented with the opportunity to explore suppliers for sustainable packaging for products.
Revenue and Net Income
While revenue and net income are related, they are two separate measurable key performance indicators. Revenue is the value of all sales recognized by the company in a specific period of time. It can be measured by multiplying the number of units the company sold in a single year by the selling price per unit in that same year (Mukhopadhyay, 2021). Net income, on the other hand, is gross revenue minus all other expenses and costs the company incurred in that specific period of time. Therefore, net income could be measured by taking the gross revenue for the year and subtracting costs of production, taxes, interest, and any other general expenses (Kenton, 2021). The key strategies for profit listed in the TBL plan include reaching a global audience with healthy, high-quality, and sustainable products, and to become the leading brand in the industry. In order to help become the leading brand, the company will need to track revenue and net income as they should be increasing with the company’s growth. One of the company’s values is providing shareholder value and long-term growth. Another key to becoming the leading brand is investors and shareholders. Net income is especially important to investors and shareholders because this tells them if a company is profitable. When a company can maximize net income, it becomes more likely that some of those profits can be reinvested into the business or passed to shareholders (MarketBeat Staff, 2019). While being interconnected, Sales and Marketing both play a vital role in the TBL measurement of economic impact. The goals and targets of both departments should be aligned. Marketing provides information to the company’s consumers. This means marketing is, in part, responsible for increasing consumer choice, increasing consumer satisfaction, and developing the company’s market. Through those responsibilities, the company should then be able to increase sales. The Sales team would be responsible for tracking revenue, net income, along with all general expenses that are getting deducted from the net income.
Kenton, W. (2021, October 22). Net income (NI). Investopedia. Retrieved November 1, 2021, from https://www.investopedia.com/terms/n/netincome.asp.
MarketBeat Staff. (2019, January 8). Why net income is important to investors. MarketBeat. Retrieved November 1, 2021, from https://www.marketbeat.com/financial-terms/why-net-income-important-investors/.
Markgraf, B. (2016, October 26). Kpis & recycling. Small Business – Chron. Retrieved November 1, 2021, from https://smallbusiness.chron.com/kpis-recycling-78457.html.
Maurer, R. (2017, March 21). Data will show why your employees leave or stay. SHRM. Retrieved October 30, 2021, from https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/data-retention-turnover-hr.aspx.
Mukhopadhyay, S. (2021, October 25). Revenue vs net income. WallStreetMojo. Retrieved November 1, 2021, from https://www.wallstreetmojo.com/revenue-vs-net-income/.
Spiliakos, A. (2018, October 10). What is sustainability in business? HBS Online – Harvard Business School Online. Retrieved November 1, 2021, from https://online.hbs.edu/blog/post/what-is-sustainability-in-business.
Turletti, P. (2019, March 15). The triple bottom line: A must for sustainable marketing. Medium. Retrieved November 1, 2021, from https://medium.com/@PabloTurletti/the-triple-bottom-line-a-must-for-sustainable-marketing-af638ce20f02.