Financial Performance Indicators

January 06, 2020

In 2017 Umbrella Inc presented its employees a 3 years plan called “20+20 strategy”: an ambiguous plan to expand the business by 20% by the end of 2020. As part of this objective, few key goals were identified to favour company’s growth:

  • Trust, integrity and player safety in online gambling: Umbrella Inc wants to be recognized as the leader in trust, integrity and player safety among our customers, policy makers, regulators, investors, partners, employees and in the general public
  • World class casino experience: build a best in class product offering that not only par up with casino competitors today, but also goes above and beyond.
  • Customer experience (CX) model: delivering higher customer value through customer experience and a journey-led approach

To monitor the performance of the organization during this 3-years period a number of indicators were pinned down. For the Oxford English Dictionary a key performance indicator (KPI) is a quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance (Oxford English Dictionary, 2020). Using a list of the identified metrics Umbrella’s executives are monitoring how the business is performing towards the agreed plan. Here below a sample of used KPIs, grouped by typology:

Input KPIs

New Registered Users

A newly registered user is a user who has signed up for an account with one of Umbrella’s brands. In the gaming business a user can register without depositing any money and during their lifetime he is expected to deposit more than once this number. For gaming operators this input KPI like tons of raw materials is for manufacturing companies.

Support Requests

this KPI shows how many customers request for support, how they are divided by channel (email, chat, phone call), by market and brand. With this data the head of customer support can identify rush periods and foresee when staff will be overwhelmed, plan accordingly to avoid stressed employees and unsatisfied customers.

Process KPIs

Customer acquisition cost (CAC)

is the cost of converting a person into a depositing customer. CAC is used to understand how the marketing costs impact Umbrella’s profitability. Given a specific period of time it is calculated dividing all costs paid to acquisition by the number of new depositing users.

Customer retention cost (CRC)

once a customer has deposited for the first time it is important to keep him active. To do so a set of marketing activities are done for this purpose (campaign, sponsorship, bonuses, etc.). CRC is calculated dividing the sum of marketing cost by the number of depositing users.

Output KPIs

Net Promoter Score(NPS)

Created by best-selling author Fred Reichheld in his article “The One Number You Need to Grow” (Reichheld, 2003) NPS indicates the percentage of promoters, in other words customers’ likelihood to recommend a company to someone, minus the percentage of detractors. From this indicator management can understand the capability of the company to create a loyal relationship with customers and indicate the capacity of the business to meet customer’s expectations and satisfy their needs.

Average Revenue Per User (ARPU)

It is the measure of the revenue generated per user. ARPU is equivalent to total revenue divided by average users during a specific period of time and is one of the KPIs management wants to grow by 20% during the 3 years plan called “20+20 strategy”.

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Written by Claudio Maccari . Passionate developer and former windsurfer. You can read more about me here