Key Success Factors (KSF) play an important role in strategic planning and management. The key success factors, also known as critical success factors, are an integral part of building a successful relationship between your business offering and your customers. Setting KSFs should be a natural progression after you have established your company’s mission and goals. That is why the KSFs will be specific to your market niche, customers and business. The KSFs will provide you with a clear picture and direction and where to focus your resources (time, effort, finance) in order to achieve your mission.
How to determine the right Key Success Factors
First, you need to properly identify your KSFs. This is where knowing your customer needs, wants and preferences come into play. The best way to acquire this knowledge is through feedback forms (to see more on how to set up a feedback form see our Instagram Post). Also, you can also determine whether customers like your products/services by seeing if your sales are growing or your retention rate is improving.
Types of Key Success Factors
- Industry factors
- These factors are those that are specific to your industry and are considered a MUST to stay competitive. For example, for a digital marketing business web design, SEO, and content marketing would be considered a need and “MUSTs” in order to remain competitive.
- Environment factors
- These refer to macroeconomic (external) factors that influence your business. The main considerations to establish such KSFs are based on PESTEL analysis (Political, Environmental, Social, Technological, Economic, Legal).
- Strategic factors
- Such factors are pre-determined by the strategic direction your business has adopted. These can include producing an X amount of volume in the month, production cost or something similar.
- Temporal factors
- Temporal factors are short-lived and are related to a particular short-term strategy that the business is following (e.g. growth strategy). Therefore, these KSFs would be something like: achieve 50% bounce rate on the website, gain 300 new customers, etc.
Key Success Factors Template
Use this template to write your KSFs and make sure to rank them from 1-5 in importance (1 being low importance and 5 being very important). By ranking them, you will be able to prioritize what exactly to focus on. Add as many rows as needed.
After you have identified the KSFs and you are satisfied with their specificity, it is important to remember to track them. Tracking data is the best way to analyze how well you have identified your KSFs. The better your KSFs are performing, the more important they become for your business. In turn, more resources need to be devoted to these aspects of your overall business strategy. Of course, it is possible that as your customer base grows there will be a need to revise, or even change, your KSFs to reflect the bigger customer representation.
Key success factors are a crucial aspect of strategic planning of every business. The more specific you can get with them, the better you will be to determine exactly what and how many resources to allocate. But remember that the data will tell you everything – use the data and adapt as needed.
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