KPI
Key performance indicator
A KPI (Key Performance Indicator) is a measurable number that shows how well you are meeting a specific goal. It turns broad objectives into trackable metrics that tell you whether you are on the right path or need to step in.
What a KPI is and how it is used
A KPI translates a goal into a number you can track over time. If the goal is to grow, a KPI might be new customers per month; if the goal is more efficient advertising, the KPI is often return on ad spend. As a result you don’t talk only about feelings but have a concrete measure of success.
A good KPI has a clear definition, a target value, and a period over which it is measured. It is tracked regularly so you see in time whether you are getting closer to the goal or further from it, and can react before it is too late.
How to choose the right KPIs
The most common mistake is measuring too many things at once. What works is picking a handful of indicators that relate directly to what you want to achieve and tracking those consistently. Other numbers serve at most as supporting context.
- Tied to a specific goal, not measured for its own sake.
- Measurable from data you actually have available.
- With a clear target value and period.
- In a count you can really track and manage.
Examples of KPIs in practice
Specific KPIs differ by area. In marketing you track the conversion rate or return on ad spend, in sales the number of closed deals or the average order value, in support for instance the time to resolve a request. What they share is that every KPI ties to a goal that makes sense for the business.
Want to measure marketing by the right numbers?
Explore our marketing servicesFrequently asked questions
How many KPIs should a company track?
Fewer, done properly. It is better to focus on a few indicators directly tied to your goals than to track dozens of numbers that bury what matters. Too many KPIs lead to none being followed properly.
What is the difference between a KPI and an ordinary metric?
A metric is any measurable number. A KPI is the metric tied to an important goal that you make decisions by. In other words, every KPI is a metric, but not every metric is a KPI.
How often should KPIs be reviewed?
It depends on the indicator. Some make sense to track weekly, others monthly or quarterly. The important thing is a regular rhythm so you catch a deviation from the goal in time and can react to it.