10 Examples of Non-Financial KPIs that Make Money Now

Non-Financial Performance Measures Every Business Must Have

Today we are going to dive into 10 non-financial KPIs (key performance indicators) that every company should implement.

Why? To achieve important non-financial business goals. And, position your company for success in the future.

Furthermore, having worked in corporate finance for nearly 30 years. I have measured and reported on many financial and non-financial performance measures. More than I care to remember.

But this isn’t about me. It’s about you and your business. So let’s focus on the best non-financial KPIs. That your business can have.

non-financial KPIsPin

Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.

10 Examples Of Non-Financial KPIs

Here is my top 10 list of non-financial KPI examples. Consider it your summary of what we will cover in this article.

  • Customer satisfaction
  • On-time delivery
  • Customer retention
  • New customer development
  • Internal process productivity
  • Product or service quality
  • Company and brand reputation
  • Employee training and development
  • Employee satisfaction
  • New product and process development

Next, let’s lay in a little background information. So we are all on the same page about today’s topic.

Specifically, I want to address these 3 questions:

Then we will cover each of the 10 examples of non-financial KPIs in more detail.

So, without further delay, let’s dig into today’s topic…

What Is A Non-Financial KPI?

First of all, KPIs are performance measurements. They can be financial and non-financial business objectives.

Furthermore, they measure the outcomes of important business activities. Also, they indicate the results of your employee’s efforts.

What type of activities and efforts? Specifically, those that drive the business outcomes that you desire to achieve.

Finally, non-financial KPIs are not money-related. Although, they can be measured numerically.

And, they contribute to the success of a business. Both financially and non-financially.

What Is The Importance Of Non-Financial Key Performance Indicators?

why use non-financial indicatorsPin

Simply put, companies set non-financial KPIs to achieve their business goals. Similar to KPI’s, business goals can be financial or non-financial.

But, achieving a business goal represents the outcome. In other words, the desired result.

In contrast, financial or non-financial KPIs measure the effectiveness of underlying activities. Specifically, those activities that are closely linked to achieving a company’s goals.

Thus, it’s very important to get the non-financial KPIs of a business right. Because they contribute directly to achieving financial goals.

Specifically, making money. And, increasing profits over time.

And when your business is making money, that’s a good thing. But I always advise business owners to keep their non-business finances separate from their company’s.

I use Personal Capital to pull all of my non-business expenses and investments together in one place. And keep them separate from my business.

Best of all, Personal Capital is free to sign up and use. You can learn more about Personal Capital here.

But for now, back to today’s topic. Non-financial performance indicators…

How Do Businesses Develop Non-Financial Performance Measures?

First of all, it is important to know the foundation for non-financial KPIs.  The concept comes from what is known as the balanced scorecard.

The balanced scorecard provides for business strategy management and monitoring. To assist a company in achieving its strategic objectives. And achieve its non-financial and key financial business goals.

Furthermore, a balanced scorecard approach has 4 categories of performance management and measurement. They are:

  1. Customer experience
  2. Internal processes
  3. Innovation, growth, and development
  4. Financial

Today, we are focused on KPIs for the first 3 categories. Specifically, non-financial performance measures.

To sum up, your business has goals to achieve. Thus, management develops and sets a business strategy to achieve those goals.

Critical for goal achievement are business activities and employee efforts. As a result, non-financial KPIs are developed to measure their effectiveness.

Specifically, non-financial performance measures are developed to monitor the activities linked to company strategy.

Okay. So we know what a non-financial KPI is. Also, we know why these non-financial performance measures are important. And how they are developed.

So next, let’s cover each of the 10 non-financial KPI examples I summarized at the beginning of this article. We will start with 4 that fall into the category of customer experiences.

Start thinking about how you can include these in your company’s non-financial and financial planning efforts.

list of non-financial measuresPin

1. Customer Satisfaction: A Key Non-Financial KPI

Customer satisfaction represents how happy your customers are with your products, services, and responses to their needs.

It should come as no surprise that satisfied customers are essential to any business. Disappoint your customers and they will find another supplier. For whatever it is your business provides them.

So, “keep your finger on the pulse” of your customer’s satisfaction. Do so with customer surveys or polls. Also, gather feedback from employees who have direct contact with them.

On the other hand, choose your customers wisely. Since not every customer is a good one.

Because you do not want to consume unlimited resources.  To keep a difficult customer happy.

So, sometimes you have to “fire” a customer. For the good of your business.

Time for our second non-financial objective of a business…

2. On-Time Delivery: A Customer Experience Non-Financial KPI

When it comes to this non-financial performance measure, a couple of expressions come to my mind. They might seem overused, but they apply.

First of all, say what you are going to do for your customers. Then do what you say.

Furthermore, under-promise. Then, over-deliver.

Because your customers want your product or service for a reason. And few things will disappoint customers more than not delivering at the agreed-upon time.

Unless you have a unique product or service. That they can’t find elsewhere. Late delivery will result in your customer finding another business to provide it.

So, develop a non-financial KPI. And for your company’s success, measure the rate of delivering on time.

Next up, our third of 10 examples of non-financial key performance indicators.

3. Customer Retention: A Must-Have Non-Financial KPI

examples of non-financial KPIsPin

Make your business successful at satisfying customer needs. And meet those needs on time.

Then chances are your business will have a high customer retention rate. Why is customer retention important?

Because it is easier and less expensive to sell to a customer you already have. Versus a new customer that you need to identify and bring on board.

What you don’t want is high customer churn. It’s costly. And it usually indicates a failure on the prior 2 non-financial KPIs that we just discussed.

Thus, set and monitor a non-financial performance measure. That accounts for an appropriate customer retention rate.

Now, it’s time for our fourth non-financial metric…

4. New Customer Development For Your Non-Financial KPIs

So, you have happy customers. And, you are retaining then. In addition, you are delivering on time.

That’s an excellent foundation for your customer experiences.  And, the associated non-financial performance measures. But wait, there’s much more.

Think about the next 1-5 years. How will you attract new customers? To sustain your business. And grow it over the long run.

So, it’s time to develop a non-financial KPI for new customers. Because every business should have processes to identify new customers. Land them. And onboard them.

Thus, development a measurement that accounts for bringing on new customers.

Next, we are moving onto the second category of the balanced scorecard. Specifically, 3 non-financial KPIs related to internal processes.

Thus, it’s time for our next non-financial performance indicator…

5. Internal Process Productivity

Develop non-financial KPIs to measure and audit your business processesEvery business needs to perform its core processes either better, faster, or both.

Better means doing more with fewer resources. Faster means getting the most out of the resources that are already in place. Doing either means generating a return on your business investments.

Here are a couple of ways to think about this. Ask yourself how to operate better today versus yesterday. And be better tomorrow than today.

This is how you develop a continuous improvement mindset in your business.

Furthermore, ask yourself if your company’s activities are focused on the right things. And doing those things the right way.

These expressions capture the essence of improving productivity within a business.

So, determine what processes your business must be good at. And then set 1 or more non-financial performance measures to be great at those activities.

Because improving processes reduces costs. And expense management is one of many important financial goals that every business should pursue.

Also, you may want to consider business process outsourcing to increase productivity. Many companies start by outsourcing accounting and financial management. Then expand outsourcing from there.

Here’s one more suggestion to reduce costs. Do you make purchases online? Then save money on everything you buy with Rakuten. 

Rakuten offers electronic cash rebates for buying things you need anyway!  It is money in your pocket.

You can learn more about Rakuten here.

6. Product And Service Quality

business strategyPin

We have already talked about the importance of delivering on time to customers. On the other hand, don’t deliver on time at the expense of quality.

Because the two things that disappoint customers the most are timeliness and quality. Failing in these areas means…

You can expect a high amount of customer churn. Resulting in higher costs and lower profits.

Are you starting to see how non-financial KPIs are related? And closely tied to a company’s short-term and longer-range financial goals?

Regardless, develop a performance metric that measures the level of quality your customers expect. Then deliver on it. At the highest success rate possible.

Because whether you are producing food products, business services, or nuts and bolts. Delivering at your target quality level is critical.

Here is another favorite example of non-financial performance measures…

7. Company And Brand Image: An Internal Process Non-Financial KPI

Some companies develop products and promote them under a brand name. This is part of a firm’s marketing efforts.

On the other hand, some companies do not have branded products.

But in all cases, every company has a brand image. Within their industry. Throughout the state in which they operate. And throughout their customer base.

The image may be associated with specific products. Or, the company as a whole.

So, determine what your brand means to customers. Ask yourself, what does it promise?

Then set non-financial performance measures that will protect the brand. And enhance its image.

Collect data on market share. It is one way to measure brand performance.

The greater the share. The better the brand. And its image.

Furthermore, business goals for each employee should be to improve the image of your company’s brand each day. Leading us to the 3rd and last non-financial category in the balanced scorecard.

That being innovation, growth, and development. Bringing us to number 8 on our list of non-financial targets…

8. Add Employee Satisfaction To Your Non-Financial KPIs

Satisfied employees will put a positive light on your brand image. Unhappy employees will destroy it.

So create a nice work environment. Promote a positive culture of engagement and inclusivity.

But realize, every company is slightly different. And different employee populations value different things. Furthermore, employee values may differ by the location, economy, or the state in which you operate.

Thus, determine what makes your employees happy. Then measure the activities that make it so.

Employee satisfaction surveys are one way to measure this non-financial metric. But nothing can take the place of good managers. With a pulse on the satisfaction of the people who work for them.

Here is another great non-financial measure. It is developing your employees.

An essential part of a well-rounded set of company goals.

9. Employee Training And Development: Key For Innovation-Oriented Non-Financial KPIs

non-financial performance measuresPin

Training and developing your managers and their team members is critical to keeping up in today’s world.

Why? Because rapid change is the only constant.

As a result, education, training, and development should never stop. Even after an employee’s goals as a college student have been achieved.

So, make training opportunities available to employees.  On-the-job training. More formal continuing education. And mentorship opportunities. All are beneficial.

Help your employees understand what they need to be good at. And then, help them be great at it. Whatever “it” is.

What’s the goal for employee professional development? It is to create an organization that thinks and learns individually and collectively.

To solve new problems when they arise. And capitalize on opportunities as they present themselves.

Sometimes this is referred to as a learning organization. It is a dynamic, living, breathing thing. And it is very powerful for ensuring the long-term success of businesses.

Finally, our last example of non-financial performance measures…

10. New Product And Process Development

I’m ready to wrap this article up with non-financial KPI #10. And another one of my favorite expressions hammers this measure home…

If you are standing still you are falling behind. This is so true.

Business competition is fierce in our society. And if there is a way to make money, someone is going to identify it and exploit it.

So set non-financial measures focused on new products or services. Just be sure not to move too far away from your core competencies.

Also, establish non-financial KPIs for the development of new internal processes.

The goal? To innovate externally for the benefit of new and existing customers. And innovate internally to get better at whatever it is your business does.

However, sometimes innovation requires investment. And investments require capital. So, consider a small business loan if you need financing.

Okay. That concludes our review of 10 examples of non-financial KPIs. They represent some of my favorite metrics that a business should implement.

Let’s wrap up with a summary of what we have covered today…

Summary: Non-Financial Performance Measures For Your Business

performance indicatorsPin

First of all, KPIs (key performance indicators) are for performance measurement. They can be financial or non-financial.

Furthermore, KPIs serve to measure outcomes. Of important business activities and employee efforts. They are part of business performance management.

Today’s article was specifically about non-financial KPIs. Those non-financial measures for achieving a company’s objectives and money-oriented goals.

Furthermore, non-financial KPIs have their foundation in the balanced scorecard. It is an approach to business strategy management.

And non-financial KPIs fall in these 3 categories:

  1. Customer experience
  2. Internal processes
  3. Innovation, growth, and development

Balanced measurement like this is one of the advantages of non-financial key performance indicators.

Examples Of Non-Financial KPIs

Finally, here are 10 non-financial KPI examples every business should consider:

  • Customer satisfaction
  • On-time delivery
  • Customer retention
  • New customer development
  • Internal process productivity
  • Product or service quality
  • Company and brand reputation
  • Employee training and development
  • Employee satisfaction
  • New product and process development

Additional Reading To Achieve Financial And Non-Financial KPIs

My Favorite Finance Tools To Save & Manage Money

I mentioned several of my favorite finance tools throughout this article. And I have summarized them here for your convenience.

conclusions about business strategyPin

Author Bio: Tom Scott founded the consulting and coaching firm Dividends Diversify, LLC. He leverages his expertise and decades of experience in goal setting, relocation assistance, and investing for long-term wealth to help clients reach their full potential.

10 Non-Financial KPIs Every Company Must Have