CBC Performance Measurement & KPIs 2 — Questions and Answers
Question 1: A business coach's client wants to track "customer satisfaction" but has no measurable target. What should the coach recommend first?
- Convert the goal into a SMART metric such as a Net Promoter Score target (Correct answer)
- Drop the goal because it cannot be quantified
- Wait until year-end to evaluate satisfaction anecdotally
- Track revenue instead, since it reflects satisfaction indirectly
Correct answer: Convert the goal into a SMART metric such as a Net Promoter Score target
Vague goals must be translated into specific, measurable indicators like NPS before they can function as KPIs.
Question 2: Which of the following is a leading indicator for a sales team's quarterly revenue target?
- Number of qualified discovery calls booked per week (Correct answer)
- Total revenue closed last quarter
- Year-over-year profit margin
- Annual customer churn rate
Correct answer: Number of qualified discovery calls booked per week
Leading indicators, like discovery calls booked, predict future results, whereas revenue and churn report past outcomes.
Question 3: A client tracks 42 KPIs on a single dashboard and feels overwhelmed. What is the coach's best guidance?
- Prioritize a small set of critical KPIs tied directly to strategic objectives (Correct answer)
- Add more KPIs so nothing important is missed
- Delegate all measurement to the finance department
- Rotate through all 42 KPIs on a weekly review schedule
Correct answer: Prioritize a small set of critical KPIs tied directly to strategic objectives
Effective performance measurement focuses on a limited number of KPIs aligned to strategy, avoiding metric overload.
Question 4: In a coaching engagement, what is the primary purpose of establishing a baseline measurement before an intervention?
- To enable objective comparison of pre- and post-intervention performance (Correct answer)
- To prove the client was underperforming before coaching
- To satisfy contractual reporting requirements only
- To set the maximum performance the client can achieve
Correct answer: To enable objective comparison of pre- and post-intervention performance
A baseline provides the reference point against which progress and coaching impact are objectively measured.
Question 5: A retail client's KPI dashboard shows conversion rate rising while average transaction value falls. How should the coach interpret this?
- Examine the metrics together, since a trade-off between them may be occurring (Correct answer)
- Celebrate, because any rising metric is a success
- Ignore transaction value because conversion is the primary KPI
- Assume the data is wrong and discard both metrics
Correct answer: Examine the metrics together, since a trade-off between them may be occurring
KPIs must be analyzed in relation to each other because improving one metric can come at the expense of another.
Question 6: Which KPI best measures the efficiency of a company's customer acquisition efforts?
- Customer acquisition cost (CAC) (Correct answer)
- Gross revenue
- Employee headcount
- Inventory turnover
Correct answer: Customer acquisition cost (CAC)
CAC measures how much is spent to gain each new customer, directly reflecting acquisition efficiency.
Question 7: A coach notices a client's team manipulates a call-volume KPI by making short, low-quality calls. What does this illustrate?
- A poorly designed metric incentivizing behavior that undermines the real goal (Correct answer)
- Proof that KPIs should never be used with sales teams
- Evidence that the team needs more calls per day
- A successful KPI, since the target is being met
Correct answer: A poorly designed metric incentivizing behavior that undermines the real goal
When a measure becomes a target, people may game it, so KPIs must be paired with quality safeguards.
CBC Performance Measurement & KPIs 2
A business coach's client wants to track "customer satisfaction" but has no measurable target.
What should the coach recommend first?