What are different Parts of an Internet Business?
So far, we've explored the concept of Metric Hierarchy and the importance of Paired Metrics in providing a balanced view of performance.
Before exploring KPIs for specific functions in internet businesses, let's understand the common functions and how they are organized by stages of value addition. This will set the stage for identifying relevant KPIs that align with specific business functions and their roles in creating value.
Introduction to Business Functions and Value Stages:
Internet businesses, like all businesses, are comprised of several core functions, each contributing to the creation and delivery of value to customers. These functions are often organized into stages that reflect the flow of value from production to delivery to the customer.
Understanding these functions and their sequential stages is crucial for setting up a coherent Metric Hierarchy and selecting the right paired metrics.
Common Functions in Internet Businesses:
☞ Product Development: This is where the value creation begins, involving everything from idea generation to product design and development.
☞ Marketing: Once a product is ready, marketing works to communicate its value to the target market, attract potential customers, and build brand awareness.
☞ Sales: The sales function takes over to convert potential leads into actual customers, often working closely with marketing.
☞ Operations: This includes the logistics of delivering the product or service to the customer, maintaining quality, and managing ongoing service or product improvements.
☞ Customer Support: Post-sale, this function ensures customers are satisfied and engaged, handling inquiries, complaints, and feedback.
Stages of Value Addition:
1. Value Production: Involves the creation or development of the product or service.
2. Value Communication: Encompasses marketing and sales efforts to communicate the value to potential customers.
3. Value Delivery: The actual delivery of the product or service to the customer.
4. Value Enhancement: Post-sale activities aimed at enhancing customer satisfaction and retention.
Takeaway:
Understanding the different functions and stages of value addition in an internet business is essential for setting up relevant KPIs.
By breaking down the business into these functions and stages, you can more effectively target specific areas with appropriate metrics, ensuring a comprehensive and strategic approach to performance measurement and growth.