business plan kpis

What is a KPI? How To Choose the Best KPIs for Your Business

Published: September 28, 2022

The question "what is a KPI?" comes up at many meetings. If you want to scale your company, you might be wondering about KPIs and how they can help your business grow.

Reviewing performance through key performance indicators (KPIs), tells your team when you've met the mark or fallen short. But how do you pick the right KPIs for your business?

In this post, we'll walk you through what a KPI is, which KPIs you should focus on, and how you can hone in on the metrics that matter most for your business.

Keep reading, or jump to the section you’re looking for:

What is a KPI?

Why are kpis important, types of key performance indicators, kpis vs. metrics, okr vs. kpi, how to determine kpis, kpi examples, how to measure kpis.

KPI is an acronym for key performance indicator. KPIs measure performance and progress toward a specific goal over time. They help keep the primary goals of a business at the forefront.

Whether a KPI is for a one-off campaign or a long-term initiative, it can help teams track their progress, improve results, and stay on track.

Businesses use KPIs to figure out whether they are reaching their top goals. These KPIs usually track the overall health and performance of the organization.

Departments use KPIs to show the value of their efforts to the business. These performance indicators help teams work toward set outcomes and solve issues that stand in the way of those goals.

And employees use KPIs to understand how their individual efforts contribute to project, team, and organizational goals.

KPIs can also help track the effectiveness of:

• Strategic changes

A KPI is also useful for cross-departmental collaboration, as it makes it simple to see what other teams are working toward at a glance. KPIs tell companies if their hunches are right and if what they are doing is working.

Important note: KPIs should measure your most essential indicators.

For instance, your social media team may have a ton of data points that can serve as KPIs. However, they should only choose the ones that align with the broader business goals. Let's say it's brand awareness. In this case, follower count, post reach, and impressions will likely be the social media KPI metrics to measure.

With that in mind, having KPIs means narrowing your focus to a few vital metrics that will influence your business the most.

People around the world generated and consumed 64.2 zettabytes in 2020. And according to Statista , that number should reach 181 zettabytes by 2025.

How much is a zettabyte? One billion terabytes. And how much is a terabyte? About one trillion bytes. That's a lot of information. That means that your business is processing more information than ever before.

As you process that ever-growing mass of data, it can start to feel overwhelming. For example, this post on sales metrics outlines over 140 metrics that one sales manager might track in a month. These are valuable metrics that can help salespeople excel. But add in weekly metrics, and it's no surprise that 80% of workers are suffering from information overload.

Enter the KPI. When you select a KPI for your business or team, it narrows the focus of your efforts. This one strategy can help your team rally around what's most meaningful. It can push teams to get results faster, be more productive, and make useful changes when they're needed.

A KPI is more than a number. It's a message, a story that quickly shows your team whether you are moving toward the goals you've set together. Key performance indicators can help:

• Keep high-level goals top of mind
• Convert abstract ideas into manageable targets
• Cut down on data overload

Strong KPIs can help your business save time, get critical insights, guide management, and keep your business on a long-term path of growth.

Because KPIs are so critical, it's essential to set the right KPIs for your business. The wrong KPI can disrupt even the strongest team.

For example, say your marketing team is selecting a KPI for its growth goals. Ranking in search engine results is important for a blog, so the amount of #1 keyword rankings could seem like a good KPI.

But what if your blog's top-ranking keywords don't relate to your business goals? What if those keywords have low traffic volume or don't connect to qualified leads? In this situation, organic traffic is probably a better KPI.

Choosing the right KPI might take some extra research, so let's talk about the different types of KPIs.

While there are many different indicators of performance that a business can measure, most fall under two categories:

Quantitative KPIs

A quantitative KPI uses numbers to measure progress toward a goal. The majority of KPIs are quantitative, like the number of closed sales, customer service tickets, or annual revenue.

Image Source

Qualitative KPIs

A qualitative KPI tracks non-numerical data, like customer comments or employee engagement. While there are ways to get quantitative data from qualitative research, these KPIs focus on non-numerical data.

For example, say a company just released a new product online. As soon as the product listing goes live they'll track quantitative metrics like:

• Product sales
• Abandoned carts
• Product page views

At the same time, the company would also track qualitative data like product reviews and customer surveys. This can help the team figure out how people are responding to the product and how to keep improving it.

Most businesses use more than one KPI to track performance and may combine KPIs to reach a set goal.

There are other measures that companies use to hone in on their business goals.

Other Key Performance Indicators

Leading KPIs : This is quantitative data that helps a business measure potential responses to a change. For example, if a SaaS business plans to launch a new feature, leading indicators can help it project future results.

Lagging KPIs : These measure results after a change to track whether that change is meeting expectations. These are sometimes also called output indicators. For example, after the SaaS business launch above, lagging indicators will show the actual outcomes of the release.

Leading and lagging KPIs can help teams make corrections early. This can save the business time, effort, and investment over time.

Input KPIs : These track the resources a business needs for a campaign, project, or process.

Process KPIs : Process KPIs track how well a new process is working and help target potential changes. For example, a common process KPI is the time it takes to close a support ticket.

Practical KPIs : These track current internal company processes and how they impact other parts of the business.

Directional KPIs : These KPIs look at overall company performance. They may focus on trends within the company or in comparison to competitors.

Actionable KPIs : Indicators like this track how well a company commits to and carries out internal business changes. Examples include KPIs that track culture changes, employee sentiment, or DEI initiatives. These often measure progress within a set period of time.

When you were in school, you might have learned that a square can be a parallelogram, but not every parallelogram is a square. The same is true of KPIs and metrics.

While a KPI can be a metric, not every metric is a KPI. This is because KPIs track progress toward a specific goal. A KPI is a significant measure of performance.

When your team selects a KPI, they commit to a specific metric and how meeting that goal can lead to business growth. KPIs also narrow the scope of information to data that everyone needs to know — from interns to stakeholders.

This doesn't mean that metrics aren't impactful. As your team solves specific problems and creates processes, there are many metrics you will track. In turn, these metrics can help your team meet your KPIs.

KPI Metrics Example

Here's an example. Say that your team is creating a blog for your sales team to generate more qualified leads. The KPIs for this project are:

Those are the key performance indicators that your team believes will show that the time and effort of launching a new blog is worth it to the business.

At the same time, if you've ever started a blog, you know that there are many other metrics to track like:

• Engagement time
• Bounce rate
• Views per user
• Domain authority

These metrics will help your team solve problems, choose the right blog topics, and make changes that improve the user experience.

Metrics are essential to the team that works on the blog so they can make it better. At the same time, metrics are often too much detail for every stakeholder. In this example, your blog team needs other metrics to help meet its KPIs.

Objectives and Key Results (OKR) and KPIs are often used interchangeably because both terms refer to goals that are tracked and measured. However, they differ in intention.

Put simply, KPIs show whether your business is hitting its targets. They are often called health metrics as they tell you how the company is doing to meet an objective that's already set.

OKRs, on the other hand, are broad objectives for your business with the key results that will signify achievement in meeting those objectives. They are aggressive and ambitious goals that speak to the business's big-picture vision.

For instance, let's say a technology company has the objective of becoming one of the top 10 providers in their industry in 2021. Their key results could be:

• Acquire 1,000 new customers by Q3.
• Generate 3,000 leads every month.
• Increase annual membership sales by 30%.

While KPIs are ideal for scaling, OKRs are designed for dramatic growth. They're more ambitious and push teams to stretch their capabilities.

It's also important to note that while KPIs can be the key results in your OKR, the opposite is generally not true.

For example, your marketing team could have a KPI of 3,000 leads as mentioned in the example above. However, it's unlikely that any department would list the "Top 10" goal as their KPI as that speaks to a broader vision and has a more flexible timeline.

• Choose KPIs directly related to your business goals.
• Consider your company's stage of growth.
• Identify both lagging and leading performance indicators.
• Focus on a few key metrics, rather than a slew of data.

Before you can measure your KPIs, you'll need to determine which metrics to track. This will greatly depend on your goals and your team.

Once you narrow that down, set your targets. They're usually based on a combination of factors, including historical performance and industry standards.

You'll also have to answer the who, when, and why. Who is responsible for this KPI? Identify the person on your team who is managing this KPI, so they can be the go-to when addressing roadblocks that may affect performance. They will also be responsible for reporting on progress.

As for the "when," you'll need to know the timeline to reach these targets. Many businesses set them on a monthly or quarterly basis, but your timeline can be shorter or longer depending on your team.

Lastly: the why. It's the most important thing to keep in mind when measuring your KPIs. Having your goals clearly identified can help motivate your team and make sure everyone is aligned on the direction you're going in.

Let’s go over a few steps that can help make this process more simple.

1. Choose KPIs directly related to your business goals.

KPIs are quantifiable measurements or data points used to gauge your company's performance relative to a goal. For instance, a KPI could be related to your goal of increasing sales, improving the return on investment of your marketing efforts, or improving customer service.

What are your company goals? Have you identified any major areas for improvement or optimization? What are the biggest priorities for your management team?

Answering these questions will bring you one step closer to identifying the right KPIs for your brand.

2. Consider your company's stage of growth.

Depending on the stage of your company – startup vs. enterprise – certain metrics will be more critical than others.

Early-stage companies typically focus on data related to business model validation while more established organizations focus on metrics like cost per acquisition and customer lifetime value.

Here are a few examples of potential key performance indicators for companies in various stages of growth:

3. Identify both lagging and leading performance indicators.

The difference between lagging and leading indicators is essentially knowing how you did, versus how you are doing. Leading indicators aren't necessarily better than lagging indicators, or vice versa. You should just be aware of the differences between the two.

Lagging indicators measure the output of something that has already happened. Total sales last month, or the number of new customers or hours of professional services delivered, are examples of lagging indicators. These types of metrics are good for purely measuring results, as they focus on outputs.

On the other hand, leading indicators measure your likelihood of achieving a goal in the future. These serve as predictors of what's to come. Conversion rates, sales opportunity age, and sales rep activity are just a few examples of leading indicators.

Traditionally most organizations have solely focused on lagging indicators. One of the main reasons for this is they tend to be easy to measure since the events have already happened. For instance, it’s easy to pull a report of the number of customers acquired last quarter.

But measuring what happened in the past can only be so helpful.

You can think of leading indicators as business drivers because they come before trends emerge, which can help you identify whether or not you are on track to reaching your goals. If you can identify which leading indicators will impact your future performance you will have a much better shot at success.

With every business, growth is the goal. KPIs help you track your progress and scale progressively to grow in whichever way that matters to your company.

4. Focus on a few key metrics, rather than a slew of data.

As you begin to identify KPIs for your business, less is worth more. Rather than choosing dozens of metrics to measure and report on you should focus on just a few key ones.

If you track too many KPIs, you might become overwhelmed with the data and lose focus.

As you can imagine, every company, industry, and business model is different so it’s difficult to pinpoint an exact number for the amount of KPIs you should have. However, a good number to aim for is somewhere between two to four KPIs per goal. Enough to get a good sense of where you stand but not too many where there's no priority.

Your organization's business model and the industry in which you operate will influence the KPIs you choose.

For example, a B2B software-as-a-service (SaaS) company might choose to focus on customer acquisition and churn, whereas a brick-and-mortar retail company might focus on sales per square foot or average customer spend.

Here are a few examples of some industry-standard KPIs:

While some KPIs are simple, KPIs that can help your business target specific goals can be tougher to create. These examples of key performance indicators for businesses can inspire the right KPI for your business.

• Marketing KPIs

KPIs for marketing can help you track the effectiveness of marketing efforts. It can help you figure out the value of specific campaigns and initiatives, and assess different media channels.

For example, this video outlines how to set KPIs for social media:

These are some of the top marketing KPIs:

• Return on Investment (ROI)
• Lifetime Value of a Customer (LTV)
• Customer Acquisition Cost (CAC)
• Conversion Rate

For more KPI ideas, check out these resources:

• Business blogging metrics
• Email marketing metrics
• Marketing KPIs for CEOs
• Content marketing metrics

Sales is a numbers-driven activity and this makes KPI selection even more important. Sales KPIs can measure individual, team, departmental, or organizational efforts. They can also help sales teams make shifts and respond to goal and priority changes.

These are some common sales KPIs:

• Monthly sales growth
• Monthly calls (or emails) per rep
• Opportunity to deal ratio
• Average purchase value

• Field sales leader KPIs
• Sales metrics guide
• Inside sales metrics
• Sales and marketing KPIs

Service KPIs

Customer service KPIs can track the performance of support teams. They also help service managers understand, analyze and optimize the customer experience.

Here are some of the top service KPIs:

• Number of resolved tickets
• Customer satisfaction score (CSAT)
• First response time
• Net promoter score (NPS)
• Customer service KPIs
• Customer experience metrics
• Customer success metrics
• Call center metrics

Website KPIs

A website KPI can connect the performance of your website to marketing, sales, and service goals. Website data can help businesses understand how to connect siloed departments and fix gaps in the buyer journey. This type of KPI is especially useful for ecommerce sites.

Here are some common website KPIs:

• Traffic sources
• Number of sessions
• Number of transactions

This post also has some great suggestions for website engagement metrics .

• Identify the tools or software you need to measure your KPIs.
• Narrow down your final list of KPIs.
• Create standard reports and timing for reporting.
• Design visualizations in your dashboard for your most important KPIs.
• Share KPIs reports with other teams for quality checks.
• Choose a reporting cadence for stakeholders.
• Set new goals and KPIs based on your results.

Now that you know what a KPI is and how to choose the right KPIs for your business, it's time to act. Measuring a KPI can be simple or complex depending on your KPIs, your tech stack, and the way your team works.

Some companies end up tracking the wrong KPI because it’s the easiest data to track. This isn't a satisfying solution, and it can lead to bigger business challenges long term.

Let's walk through the best practices for measuring your KPIs.

1. Identify the tools or software you need to measure your KPIs.

KPI measurement starts with your data sources and the tools your business uses to track data. There are a few things you'll want to look for in the right software.

Integrations

According to 2021 research from Productiv, the average company uses over 200 apps . This means that you'll need a software solution that connects to a range of tools to pull together accurate data.

Dashboards are also useful for tracking KPIs because they make it easy to visualize insights. Visualization can make complicated information simpler and quicker to understand and act on.

Custom and standard reports

It's also helpful to use KPI software with both standard and custom reporting. While some KPIs are effective alone, others may need supporting metrics to clarify the story of the data. For example, say your KPI is social media engagement. You may also want to present data on every social media tool your team is using.

Read here if you're looking for the right data tracking software .

2. Narrow down your final list of KPIs.

Focus is the top reason to limit the number of KPIs you track. If KPIs are the most critical measure of business success, you want to track just two or three KPIs, not 10-20.

First, make sure there is a clear separation of KPIs from metrics. Next, revisit your goals to make sure that the KPIs you've selected show clear progress toward that goal.

As you research software you might notice that some KPIs are easier to track than others.

For example, tracking customer lifetime value by marketing channel is easy if your revenue and marketing systems connect. But what if these are two different systems? Maybe your marketing platform shows that most of your leads come from the blog. At the same time, your customer platform analytics show that most of your leads come from a landing page.

This kind of issue leads to a lot of manual work, and a KPI your team can't trust. Until you can unify your systems , you may want to choose a KPI that you can measure accurately.

Be sure to watch your KPIs in the first few months and take note of how often you check each KPI. Sometimes you'll need real data to figure out if that performance indicator is useful.

For example, say at the beginning of a co-marketing partnership, you and your partner set a KPI for shared leads. But in the first two months, the only shared leads come from a webinar that your companies host together. At the same time, you both notice increased lead volumes from referral links.

If you want your KPIs to measure the effectiveness of your partnership, you may want to change this KPI.

3. Create standard reports and timing for reporting.

One way to help stakeholders invest in KPIs is to create a consistent reporting schedule and format. You can measure and report on KPIs each week, month, quarter, or year depending on your business needs.

For example, if you have a monthly lead goal, it's a good idea to track your KPIs weekly. If performance tracks with expectations, you can gather insights into what your team is doing well. If not, you have a chance to ask for resources, troubleshoot, and make changes.

A standard report has the same structure every time. You can often automate these reports and they usually don't need much manual data analysis. Depending on your industry and KPIs you may want to customize your standard reports . This can help you make sure that your reports clearly show the most useful information.

4. Design visualizations in your dashboard for your most important KPIs.

Scanning numbers is satisfying for some. But most people process and retain visuals best. So, you'll want to make the most of your data with a visual dashboard that makes your KPIs easier for stakeholders to understand and remember.

As you build your dashboards, there are a few helpful things to think about. First, try to group your KPIs to create audience-specific dashboards. For example, you might want to build one KPI dashboard for C-suite presentations and another for meetings with your team.

Next, keep your visuals simple. Choose the best chart for the information you're presenting and don't add small text or extra graphics that could distract from your data.

5. Share KPIs reports with other teams for quality checks.

It may take some time before your KPIs are a reliable source of information. There is a lot that you can do with digital tools, but don't forget another crucial resource for making sure your KPIs are accurate — your team.

Whether you check in with your friends in Accounting every other day or hold weekly check-ins with people in your department, it's smart to reach out. Even small issues can lead to big errors over time.

For example, do you want to base your KPI on the average daily call volume of customer service seven days a week or just Monday through Friday? If you don't talk to your CS team about their structure and schedule, you might pull the wrong data. This can lead to skewed numbers, poor strategic decisions, and more.

The more your business can trust your KPIs, the more benefits they'll get from them.

6. Choose a reporting cadence for stakeholders.

Most decision-makers in business organize reporting around the business calendar. But you'll still want to think about the right reporting cadence for your specific KPIs.

For example, a monthly cadence might not be frequent enough to troubleshoot problems. At the same time, a weekly cadence might create information overload. Too frequent meetings can also lead to conversations about metrics instead. This takes the focus away from your key performance indicators.

If you are new to this process, it may make sense to meet more frequently in the beginning, then create more space between meetings later.

You want to build a culture and structure around support for your KPIs. Remember that it's about the business using this tool to reach your goals.

7. Set new goals and KPIs based on your results.

Some KPIs are forever, but you'll want to continue to review and update your KPIs based on results. So, schedule time at least once a year to review your KPIs.

As you make updates, organize your data in a way that makes it easy to compare useful KPIs with indicators that aren't helping.

Next, make some time to plan and research the changes you might want to make. Changing KPIs can sometimes create unintended issues. For example, a slack KPI can show consistent strong results, even if performance isn't in line with growth goals.

As you make adjustments, keep in mind that KPIs should come from business goals, not the other way around.

Use Your KPIs to Fuel Growth

Powerful KPI creation and tracking can give you and your business a strategic advantage. They can help you prioritize, focus, and scale processes toward your goals.

Some KPIs are easy. But if you want to push to the next level, you may need to take some extra time to find the exact KPIs that your company needs.

This post was originally published in March 2021 and has been updated for comprehensiveness.

Don't forget to share this post!

Related articles.

9 Pivotal Marketing Trends to Watch in 2024, According to Experts

The Ultimate Guide to Marketing Strategies & How to Improve Your Digital Presence

Diving Deep Into Marketing in Construction (My Takeaways)

11 Recommendations for Marketers in 2024 [New Data]

The Top 5 B2C Marketing Trends of 2024 [New HubSpot Blog Data + Expert Insights]

5 Marketing Trends That Might Not Survive in 2024 [HubSpot Research + Expert Insights]

Everything You Need to Know About Webinar Marketing

7 Marketing Questions Teams are Asking in 2024 (+Data & Insights)

50 Small Business Marketing Ideas for 2024

How Luxury Brands Market and What You Can Learn

Outline your company's marketing strategy in one simple, coherent plan.

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

• Search Search Please fill out this field.
• Key Performance Indicators (KPIs)
• Understanding KPIs

How to Create a KPI Report

• Limitations

The Bottom Line

• Corporate Finance
• Financial Ratios

KPIs: What Are Key Performance Indicators? Types and Examples

What Are Key Performance Indicators (KPIs)?

Key performance indicators (KPIs) are quantifiable measurements used to gauge a company’s overall long-term performance. KPIs specifically help determine a company’s strategic, financial, and operational achievements, especially compared to those of other businesses within the same sector.

Key Takeaways

• Key performance indicators (KPIs) measure a company’s success vs. a set of targets, objectives, or industry peers.
• KPIs can be financial, including net profit (or the bottom line, net income), revenues minus certain expenses, or the current ratio (liquidity and cash availability).
• Customer-focused KPIs generally center on per-customer efficiency, customer satisfaction, and customer retention.
• Process-focused KPIs aim to measure and monitor operational performance across the organization.
• Businesses generally measure and track KPIs through analytics software and reporting tools.

Jiaqi Zhou / Investopedia

Understanding Key Performance Indicators (KPIs)

Also referred to as key success indicators (KSIs), KPIs vary between companies and between industries, depending on performance criteria. For example, a software company striving to attain the fastest growth in its industry may consider year-over-year (YOY) revenue growth as its chief performance indicator. Conversely, a retail chain might place more value on same-store sales as the best KPI metric for gauging growth.

At the heart of KPIs lie data collection, storage, cleaning, and synthesizing. The information may be financial or nonfinancial and may relate to any department across the company. The goal of KPIs is to communicate results succinctly to allow management to make more informed strategic decisions.

Key performance indicators (KPIs) gauge a company’s output against a set of targets, objectives, or industry peers.

Categories of KPIs

Most KPIs fall into four different categories, with each category having its own characteristics, time frame, and users.

• Strategic KPIs are usually the most high-level. These types of KPIs may indicate how a company is doing, although it doesn’t provide much information beyond a very high-level snapshot. Executives are most likely to use strategic KPIs, and examples of strategic KPIs include return on investment , profit margin , and total company revenue .
• Operational KPIs are focused on a much tighter time frame. These KPIs measure how a company is doing month over month (or even day over day) by analyzing different processes, segments, or geographical locations. These operational KPIs are often used by managing staff and to analyze questions that are derived from analyzing strategic KPIs. For example, if an executive notices that company-wide revenue has decreased, they may investigate which product lines are struggling.
• Functional KPIs hone in on specific departments or functions within a company. For example, the finance department may keep track of how many new vendors they register within their accounting information system each month, while the marketing department measures how many clicks each email distribution receives. These types of KPIs may be strategic or operational but provide the greatest value to one specific set of users.
• Leading/lagging KPIs describe the nature of the data being analyzed and whether it is signaling something to come or something that has already occurred. Consider two different KPIs: the number of overtime hours worked and the profit margin for a flagship product. The number of overtime hours worked may be a leading KPI should the company begin to notice poorer manufacturing quality. Alternatively, profit margins are a result of operations and are considered a lagging indicator.

Types of KPIs

Financial metrics and kpis.

Key performance indicators tied to the financials typically focus on revenue and profit margins. Net profit, the most tried and true of profit-based measurements, represents the amount of revenue that remains, as profit for a given period, after accounting for all of the company’s expenses, taxes, and interest payments for the same period.

Financial metrics may be drawn from a company’s financial statements. However, internal management may find it more useful to analyze different numbers that are more specific to analyzing the problems or aspects of the company that management wants to analyze. For example, a company may leverage variable costing to recalculate certain account balances for internal analysis only.

Examples of financial KPIs include:

• Liquidity ratios (i.e., current ratios , which divide current assets by current liabilities): These types of KPIs measure how well a company will manage short-term debt obligations based on the short-term assets it has on hand.
• Profitability ratios (i.e., net profit margin): These types of KPIs measure how well a company is performing in generating sales while keeping expenses low.
• Solvency ratios (i.e., total debt-to-total-assets ratio ): These types of KPIs measure the long-term financial health of a company by evaluating how well a company will be able to pay long-term debt.
• Turnover ratios (i.e., inventory turnover): These types of KPIs measure how quickly a company can perform a certain task. For example, inventory turnover measures how quickly a company can convert an item from inventory to a sale. Companies strive to increase turnover to generate faster churn of spending cash to later recover that cash through revenue.

Customer Experience Metrics and KPI

Customer -focused KPIs generally center on per-customer efficiency, customer satisfaction, and customer retention. These metrics are used by customer service teams to better understand the service that customers have been receiving.

Examples of customer-centric metrics include:

• Number of new ticket requests : This KPI counts customer service requests and measures how many new and open issues customers are having.
• Number of resolved tickets : This KPI counts the number of requests that have been successfully taken care of . By comparing the number of requests to the number of resolutions, a company can assess its success rate in getting through customer requests.
• Average resolution time : This KPI is the average amount of time needed to help a customer with an issue. Companies may choose to segment average resolution time across different requests (i.e., technical issue requests vs. new account requests).
• Average response time : This KPI is the average amount of time needed for a customer service agent to first connect with a customer after the customer has submitted a request. Though the initial agent may not have the knowledge or expertise to provide a solution, a company may value decreasing the time that a customer is waiting for any help.
• Top customer service agent : This KPI is a combination of any metric above cross-referenced by customer service representatives. For example, in addition to analyzing company-wide average response time, a company can determine the three fastest and slowest responders.
• Type of request : This KPI is a count of the different types of requests. This KPI can help a company better understand the problems a customer may have (i.e., the company’s website gave incorrect or inaccurate directions) that need to be resolved by the company.
• Customer satisfaction rating : This KPI is a vague measurement, though companies may perform surveys or post-interaction questionnaires to gather additional information on the customer’s experience.

KPIs are usually not externally required; they are simply internal measurements used by management to evaluate a company’s performance.

Process Performance Metrics and KPI

Process metrics aim to measure and monitor operational performance across the organization. These KPIs analyze how tasks are performed and whether there are process, quality, or performance issues. These types of metrics are most useful for companies with repetitive processes, such as manufacturing firms or companies in cyclical industries.

Examples of process performance metrics include:

• Production efficiency : This KPI is often measured as the production time for each stage divided by the total processing time. A company may strive to spend only 2% of its time soliciting raw materials; if it discovers it takes 5% of the total process, then the company may strive for solicitation improvements.
• Total cycle time : This KPI is the total amount of time needed to complete a process from start to finish. This may be converted to average cycle time if management wishes to analyze a process over a period of time.
• Throughput : This KPI is the number of units produced divided by the production time per unit, measuring how fast the manufacturing process is.
• Error rate : This KPI is the total number of errors divided by the total number of units produced. A company striving to reduce waste can better understand the number of items that are failing quality control testing.
• Quality rate : This KPI focuses on the positive items produced instead of the negative. By dividing the successful units completed by the total number of units produced, this percentage informs management of its success rate in meeting quality standards.

Marketing KPIs

Marketing KPIs attempt to gain a better understanding of how effective marketing and promotional campaigns have been. These metrics often measure conversation rates on how often prospective customers perform certain actions in response to a given marketing medium. Examples of marketing KPIs include:

• Website traffic : This KPI tracks the number of people who visit certain pages of a company’s website. Management can use this KPI to better understand whether online traffic is being pushed down potential sales channels and if customers are not being funneled appropriately.
• Social media traffic : This KPI tracks the views, follows, likes, retweets, shares, engagement, and other measurable interactions between customers and the company’s social media profiles.
• Conversion rate on call-to-action content : This KPI centers around focused promotional programs that ask customers to perform certain actions. For example, a specific campaign may encourage customers to act before a certain sale date ends. A company can divide the number of successful engagements by the total number of content distributions to understand what percent of customers answered the call to action.
• Blog articles published per month : This KPI simply counts the number of blog posts a company publishes in a given month.
• Click-through rates : This KPI measures the number of specific clicks that are performed on email distributions. For example, certain programs may track how many customers opened an email distribution, clicked on a link, and followed through with a sale.

A company may desire operational excellence; in this case, it may want to track how its internal technology (IT) department is operating. These KPIs may encourage a better understanding of employee satisfaction or whether the IT department is being adequately staffed. Examples of IT KPIs include:

• Total system downtime : This KPI measures the amount of time that various systems must be taken offline for system updates or repairs. While systems are down, customers may be unable to place orders or employees may be unable to perform certain duties (i.e., when the accounting information system is down).
• Number of tickets/resolutions : This KPI is similar to customer service KPIs. However, these tickets and resolutions relate to internal staff requests such as hardware or software needs, network problems, or other internal technology problems.
• Number of developed features : This KPI measures internal product development by quantifying the number of product changes.
• Count of critical bugs : This KPI counts the number of critical problems within systems or programs. A company will need to have its own internal standards for what constitutes a minor vs. major bug.
• Back-up frequency : This KPI counts how often critical data is duplicated and stored in a safe location. In accordance with record retention requirements, management may set different targets for different bits of information.

The ultimate goal of a company is to generate revenue through sales. Though revenue is often measured through financial KPIs, sales KPIs take a more granular approach by leveraging nonfinancial data to better understand the sales process. Examples of sales KPIs include:

• Customer lifetime value (CLV) : This KPI represents the total amount of money that a customer is expected to spend on your products over the entire business relationship.
• Customer acquisition cost (CAC) : This KPI represents the total sales and marketing cost required to land a new customer. By comparing CAC to CLV, businesses can measure the effectiveness of their customer acquisition efforts.
• Average dollar value for new contracts : This KPI measures the average size of new agreements. A company may have a desired threshold for landing larger or smaller customers.
• Average conversion time : This KPI measures the amount of time from first contacting a prospective client to securing a signed contract to perform business.
• Number of engaged leads : This KPI counts how many potential leads have been contacted or met with. This metric can be further divided into mediums such as visits, emails, phone calls, or other contacts with customers.

Management may tie bonuses to KPIs. For salespeople, their commission rate may depend on whether they meet expected conversion rates or engage in an appropriate number of leads.

Human Resource and Staffing KPIs

Companies may also find it beneficial to analyze KPIs specific to their employees. Ranging from turnover to retention to satisfaction, a company may have a wealth of information already available about its staff. Examples of human resource or staffing KPIs include:

• Absenteeism rate : This KPI is a count of how many dates per year or specific period employees are calling in sick or missing shifts. This KPI may be a leading indicator for disengaged or unhappy employees.
• Number of overtime hours worked : This KPI tracks the number of overtime hours worked to gauge whether employees are potentially facing burnout or if staffing levels are appropriate.
• Employee satisfaction : This KPI often requires a company-wide survey to gauge how employees are feeling about various aspects of the company. To get the best value from this KPI, companies should consider hosting the same survey every year to track changes from one year to the next regarding the exact same questions.
• Employee turnover rate : This KPI measures how often and quickly employees are leaving their positions. Companies can further break down this KPI across departments or teams to determine why some positions may be leaving faster than others.
• Number of applicants : This KPI keeps count of how many applications are submitted to open job positions. This KPI helps assess whether job listings are adequately reaching a wide enough audience to capture interest and lure strong candidates.

Examples of KPIs

Let’s take a look at electric vehicle maker Tesla ( TSLA ) for a few examples of KPIs in real life. These numbers are from its fourth quarter (Q4) 2021 earnings release.

Vehicle Production

During the quarter, Tesla produced a record 305,840 vehicles and delivered 308,650 vehicles. Production is a big deal for the company because it has consistently been criticized for being bad at ramping up. Increased manufacturing scale means more market share and profits for Tesla.

Automotive Gross Margin

For the quarter, Tesla’s automotive gross margin expanded to 30.6%. Gross margin is one of the best measures of profitability for Tesla because it isolates its vehicle production costs. Tesla managed to expand its gross margin in Q4 even as sales of lower-priced models outpaced its higher-margin models.

Free Cash Flow

Tesla’s free cash flow clocked in at $2.8 billion during the quarter. That represented a vast improvement from the $1.9 billion free cash flow in the prior year. Tesla’s level of free cash flow production suggested that the company was reaching a scale of profitability without the help of regulatory credits.

Companies can use KPIs across three broad levels:

First, company-wide KPIs focus on the overall business health and performance. These types of KPIs are useful for informing management of how things are going. However, they are often not granular enough to make decisions. Company-wide KPIs often kick off conversations on why certain departments are performing well or poorly.

At this point, companies often begin digging into department-level KPIs. These are more specific than company-wide KPIs. Department-level KPIs are often more informative as to why specific outcomes are occurring. Many of the examples mentioned above are department-level KPIs, as they focus on a very niche aspect of a company.

If a company chooses to dig even deeper, it may engage with project-level or subdepartment-level KPIs. These KPIs are often specifically requested by management as they may require very specific data sets that may not be readily available. For example, management may want to ask very specific questions to a control group about a potential product rollout .

When preparing KPI reports, start by showing the highest level of data (i.e., company-wide revenue). Next, be prepared to show lower levels of data (i.e., revenue by department, then revenue by department and product).

With companies seemingly collecting more data every day, it can become overwhelming to sort through the information and determine what KPIs are most useful and impactful for decision-making. When beginning the process of pulling together KPI dashboards or reports, consider the following steps:

• Discuss goals and intentions with business partners . KPIs are only as useful as the users make them. Before pulling together any KPI reports, understand what you or your business partner are attempting to achieve.
• Draft SMART KPI requirements . KPIs should have restrictions and be tied to SMART (specific, measurable, attainable, realistic, and time-bound) metrics. Vague, hard-to-ascertain, and unrealistic KPIs serve little to no value. Instead, focus on what information you have that is available and meeting the SMART acronym requirements.
• Be adaptable . As you pull together KPI reports, be prepared for new business problems to appear and for further attention to be given to other areas. As business and customer needs change, KPIs should also adapt with certain numbers, metrics, and goals changing in line with operational evolutions.
• Avoid overwhelming users . It may be tempting to overload report users with as many KPIs as you can fit on a report. At a certain point, KPIs start to become difficult to comprehend, and it may become more difficult to determine which metrics are important to focus on.

Advantages of KPIs

A company may wish to analyze KPIs for several reasons. KPIs help inform management of specific problems; the data-driven approach provides quantifiable information useful in strategic planning and ensuring operational excellence.

KPIs help hold employees accountable. Instead of relying on feelings or emotions, KPIs are statistically supported and cannot discriminate across employees. When used appropriately, KPIs may help encourage employees as they realize their numbers are being closely monitored.

KPIs are also the bridge that connects actual business operations and goals. A company may set targets, but without the ability to track progress toward those goals, there is little to no purpose in those plans. Instead, KPIs allow companies to set objectives, and then monitor progress toward those objectives.

Limitations of KPIs

There are some downsides to consider when working with KPIs. There may be a long time frame required for KPIs to provide meaningful data. For example, a company may need to collect annual data from employees for years to better understand trends in satisfaction rates over long periods of time.

KPIs require constant monitoring and close follow-up to be useful. A KPI report that is prepared but never analyzed serves no purpose. In addition, KPIs that are not continuously monitored for accuracy and reasonableness do not encourage beneficial decision making.

KPIs open up the possibility for managers to “game” KPIs. Instead of focusing on actually improving processes or results, managers may feel incentivized to focus on improving KPIs tied to performance bonuses . In addition, quality may decrease if managers are hyper-focused on productivity KPIs, and employees may feel pushed too hard to meet specific KPI measurements that may simply not be reasonable.

Informs management of how a company is performing in countless ways

Helps hold employees accountable for their actions (or lack of)

Can motivate employees who feel positively challenged to meet targets

Allows a company to set goals and measure progress toward those objectives

Results in potential time commitment to consistently gather data over long periods of time

Requires ongoing monitoring for accuracy and reasonableness in data

May encourage managers to focus on KPIs instead of broader strategies

May discourage employees if KPI targets are unreasonable

What Does KPI Mean?

KPI is an abbreviation for key performance indicator: data that has been collected, analyzed, and summarized to help decision-making. KPIs may be a single calculation or value that summarizes a period of activity, such as “450 sales in October.” By themselves, KPIs do not add any value to a company. However, a company can use this information to make more informed decisions about business operations and strategies.

What Is an example of a KPI?

One of the most basic examples of a KPI is revenue per client (RPC). For example, if you generate $100,000 in revenue annually and have 100 clients, then your RPC is $1,000. A company can use this KPI to track its RPC over time.

What Are 5 of the Most Common KPIs?

KPIs vary from business to business, and some KPIs are more suitable for certain companies compared to others. In general, five of the most commonly used KPIs are:

• Revenue growth
• Revenue per client
• Profit margin
• Client retention rate
• Customer satisfaction

How Do You Measure KPIs?

It depends on the actual KPI being measured. Generally speaking, businesses measure and track KPIs through business analytics software and reporting tools. This includes everything from the collection of data via reliable sources, the safe storage of information, the cleaning of data to standardize its format for analysis, and the actual number crunching. Finally, KPIs are often reported using visualization or reporting software.

What Makes a KPI Good?

A good KPI provides objective and clear information on progress toward an end goal. It tracks and measures factors such as efficiency, quality, timeliness, and performance while providing a way to measure performance over time. The ultimate goal of a KPI is to help management make more informed decisions.

KPIs offer an effective way to measure and track a company’s performance on a variety of different metrics. By understanding exactly what KPIs are and how to implement them properly, managers are better able to optimize the business for long-term success.

Tesla Investor Relations. “ Q4 and FY 2021 Update ,” Page 7.

Tesla Investor Relations. “ Q4 and FY 2021 Update ,” Page 4.

Tesla Investor Relations. “ Q4 and FY 2021 Update ,” Page 5.

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

.css-s5s6ko{margin-right:42px;color:#F5F4F3;}@media (max-width: 1120px){.css-s5s6ko{margin-right:12px;}} AI that works. Coming June 5, Asana redefines work management—again. .css-1ixh9fn{display:inline-block;}@media (max-width: 480px){.css-1ixh9fn{display:block;margin-top:12px;}} .css-1uaoevr-heading-6{font-size:14px;line-height:24px;font-weight:500;-webkit-text-decoration:underline;text-decoration:underline;color:#F5F4F3;}.css-1uaoevr-heading-6:hover{color:#F5F4F3;} .css-ora5nu-heading-6{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:flex-start;justify-content:flex-start;color:#0D0E10;-webkit-transition:all 0.3s;transition:all 0.3s;position:relative;font-size:16px;line-height:28px;padding:0;font-size:14px;line-height:24px;font-weight:500;-webkit-text-decoration:underline;text-decoration:underline;color:#F5F4F3;}.css-ora5nu-heading-6:hover{border-bottom:0;color:#CD4848;}.css-ora5nu-heading-6:hover path{fill:#CD4848;}.css-ora5nu-heading-6:hover div{border-color:#CD4848;}.css-ora5nu-heading-6:hover div:before{border-left-color:#CD4848;}.css-ora5nu-heading-6:active{border-bottom:0;background-color:#EBE8E8;color:#0D0E10;}.css-ora5nu-heading-6:active path{fill:#0D0E10;}.css-ora5nu-heading-6:active div{border-color:#0D0E10;}.css-ora5nu-heading-6:active div:before{border-left-color:#0D0E10;}.css-ora5nu-heading-6:hover{color:#F5F4F3;} Get early access .css-1k6cidy{width:11px;height:11px;margin-left:8px;}.css-1k6cidy path{fill:currentColor;}

• Product overview
• All features
• App integrations

CAPABILITIES

• project icon Project management
• Project views
• Custom fields
• Status updates
• goal icon Goals and reporting
• Reporting dashboards
• workflow icon Workflows and automation
• portfolio icon Resource management
• Time tracking
• my-task icon Admin and security
• Admin console
• asana-intelligence icon Asana Intelligence
• list icon Personal
• premium icon Starter
• briefcase icon Advanced
• Goal management
• Organizational planning
• Campaign management
• Creative production
• Marketing strategic planning
• Request tracking
• Resource planning
• Project intake
• View all uses arrow-right icon
• Project plans
• Team goals & objectives
• Team continuity
• Meeting agenda
• View all templates arrow-right icon
• Work management resources Discover best practices, watch webinars, get insights
• What's new Learn about the latest and greatest from Asana
• Customer stories See how the world's best organizations drive work innovation with Asana
• Help Center Get lots of tips, tricks, and advice to get the most from Asana
• Asana Academy Sign up for interactive courses and webinars to learn Asana
• Developers Learn more about building apps on the Asana platform
• Community programs Connect with and learn from Asana customers around the world
• Events Find out about upcoming events near you
• Partners Learn more about our partner programs
• Support Need help? Contact the Asana support team
• Asana for nonprofits Get more information on our nonprofit discount program, and apply.

Featured Reads

• The ABCs of KPIs: Defining Key Performa ...

The ABCs of KPIs: Defining Key Performance Indicators

KPIs, or key performance indicators, are metrics that measure the progress of a specific project toward your defined goals. KPIs need to be quantifiable and relevant, and should provide concrete evidence to make project decisions going forward.

A key performance indicator (KPI) is a quantitative metric of how your team or organization is progressing toward important business objectives. Organizations use KPIs at multiple levels—you can set an organization-wide, team-specific, or even individual KPIs, depending on which metrics you want to track. A good KPI can give you a sense of whether you’re on track to achieve your strategic goals. 

If this is your first time choosing key performance indicators, this article will walk you through how KPIs differ from other goal-setting methodologies, how to identify key metrics for your KPIs, and how to choose great key performance indicators.

What are KPIs?

Every project will have a list of KPIs that you can track. A social media manager could measure impressions, shares, likes, follows, replies, mentions, and comments, but they shouldn’t try to track all of the KPIs available to them. Tracking every KPI available is like highlighting every sentence in a textbook—it defeats the purpose, since the important things get buried in the clutter of less useful information. After you’ve set your goal, you’ll want to select three to five KPIs that will be most effective in measuring progress.

Why are key performance indicators important?

Key performance indicators are important because they keep teams focused on what matters most to an organization's success. They act like a report card showing how well a team is doing in key areas, which helps everyone understand where they stand. If things are going well, you keep going. If not, you know it's time to change things up.

For example, a customer service team might use KPIs to track how fast they respond to support tickets. By setting a target response time and monitoring their actual performance, they might find that quick responses lead to happier customers. With this insight, they could focus on improving response times and, as a result, see better customer satisfaction scores. This kind of focus can really make a difference in how a team performs.

Types of KPIs

When it comes to measuring success, not all key performance indicators are the same. Each type of KPI plays a unique role in how it sheds light on performance and success. Understanding the differences will help any organization use key performance indicators effectively.

Quantitative indicators

Quantitative indicators are the hard numbers. They are measurable and can be expressed in figures. Think of them as numerical evidence of performance. For example, a common quantitative KPI is monthly sales revenue. It's a straightforward metric that shows exactly how much money was brought in from sales in a month. A sales team might use other similar indicators to help paint a more complete portrait of its operations.

Monthly sales growth: Measures the month-over-month percentage increase in sales.

Average profit margin: Calculates the average profit made from each sale.

Annual recurring revenue: The predictable revenue generated each year, which is especially relevant for businesses with subscription models.

Revenue per customer: Shows the average revenue earned from each customer, which can help in understanding customer value.

Qualitative indicators

Qualitative indicators are more about the quality of something and are often subjective. They're not always represented by numbers, and sometimes they're captured through observations, surveys, and feedback. 

A good example is customer satisfaction. This can be measured through customer surveys asking how happy people are with your service, giving you a qualitative view of how you're doing. Here are a few KPIs that also show how customers view a brand:

Brand reputation: Measures how likely customers are to recommend your brand, gained through customer reviews or social media sentiment analysis.

Customer satisfaction index: This can be derived from surveys that ask customers to rate their satisfaction with your products or services.

Customer complaints and resolution rates: Tracks the number of complaints received and how effectively they are resolved.

Customer loyalty and retention rates: Measure how often customers return to make additional purchases and how long they stay with the brand.

Leading indicators

Leading indicators are a bit like a weather forecast for your business—they give you a heads-up on future performance. They can predict changes and trends before they happen, allowing companies to adjust their strategies proactively.

For example, let’s say you’re choosing KPIs for a blog marketing project. Some leading KPIs you might consider include:

Number of relevant keywords per post

Number of hours logged per asset created

Number of links within each post to other content on your site

Number of links to each post from other content on your site

These are all metrics that can predict how each post will perform. Articles that hit your minimum number of relevant keywords and link to and from other content on the site are more likely to be successful. On the other hand, a design asset that only took half the normal amount of time to create is likely to be below average quality and not perform as well as a result. Leading KPIs provide guidance ahead of time that maximize the project's likelihood of success after it's published.

Lagging indicators

Lagging indicators confirm what has already happened. They’re like looking in the rearview mirror to understand past performance. They can be financial, such as quarterly profits, which tell you how much money was made after all sales are done and expenses are paid.

When choosing your KPIs, you should make sure you have a good balance between leading and lagging indicators. For that same blog marketing campaign above, some lagging KPIs you might consider include:

Search engine rankings

Traffic to each post

Value of traffic to each post

Bounce rate (how quickly readers leave your site)

Conversions (how many readers end up purchasing your product)

These KPIs measure metrics that come after the post is published—or, put another way, they “lag” behind the project’s launch. Whereas leading KPIs help predict likely success, lagging KPIs measure actual success. Comparing the data from each will give you information about how accurate your predictions were and why actual performance may have deviated from predicted performance.

What makes a good KPI?

There are a ton of KPI options for almost every project, but not every measurable metric is a high-quality KPI. For example, tracking the number of words per post in your blog campaign wouldn’t be very useful, since the “best” post length for an article changes from topic to topic.

Similarly, some KPIs are great in one context but not in another. For example, financial KPIs, like labor cost per design project, are very helpful to the accounting department, but not very useful for design managers.

A good KPI:

Is quantifiable

Provides evidence of progress (or lack thereof)

Tracks something that is responsive to changes

Offers useful data for decision-making

Tracks something you can control and influence

Is easy to understand and work with

Can be reliably verified

How to set up effective KPIs

Choosing the best KPIs for the job is a process with specific (but simple!) steps. Follow these four steps to get started.

1. Define your business objective

You can’t choose KPIs unless you know what you’re trying to measure. Start the process by defining your business objective . Make sure that your project is in alignment with the rest of your organization by consulting with company leaders and referring to other company-wide documents like your organization’s mission, overarching strategic plan , and department-wide goals.

Depending on what level you’re working from—team manager, department head, director, VP, or company leader—you may be in a position to set both short-term and long-term KPIs. When planning at the executive level, you can set KPIs by the month, quarter, or year.

2. Identify important business metrics

Once you’ve defined your business objective, you need to decide which metrics are relevant to that objective. The metrics you choose for your KPIs should be indicators that directly relate to whether or not you achieve your objective.

Remember: KPI stands for key performance indicators. There may be a variety of metrics or indicators that impact your ultimate goal. Creating the right KPI is about capturing the most important details and making sure you’re tracking those metrics. Not every task or project needs to have an associated KPI. 

If you’re not sure where to start, check out some relevant metrics for each department in your organization.

Example financial metrics

Annual recurring revenue (ARR)

Net revenue retention (NRR)

Net profit margin (NPM)

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

Operating capital

Example customer metrics

Net promoter score (NPS)

Customer acquisition cost (CAC)

Customer satisfaction (CSAT)

Customer retention

Customer churn

Number of total paying customers

Number of new customers

Example process and operations metrics

Throughput time, or total lead time

Number of complaint or bug tickets filed

Supply chain metrics, like days sales outstanding (DSO)

Example people or human resources metrics

Employee retention rate

Employee satisfaction

Salary competitiveness ratio (SCR)

Example sales metrics

Revenue growth

Market penetration

Customer lifetime value

Gross profit margin

Example marketing metrics

Number of qualified leads

Lead conversion rate

Social media followers 

Content downloads

Email click-through rate (CTR)

3. Set up a tracking system

When you’re working on more than one project with more than one team, the number of KPIs you’re tracking can start to add up quickly. It’s important to have a tracking system in place that ensures your data is recorded consistently and at regular intervals. You won’t be able to draw accurate conclusions if you forgot to track some weeks or if you lost the data in a messy file folder.

A KPI dashboard is the best place to keep track of all of your KPIs. Having a central shared dashboard:

Ensures everyone is looking at the same information

Makes KPI data accessible to the entire team, no matter where they are

Eliminates the need to manually notify stakeholders every time something is updated

Can track metrics automatically, so there’s no chance of forgetting

Reduces the likelihood of human error

4. Track and share real-time progress

KPI data isn’t something you neglect until it’s time for your quarterly report. Rather, stakeholders should use KPI reports to make minor and major decisions throughout a project’s lifecycle. That’s why it’s important to keep your KPI data up to date and make it accessible to everyone at any time .

The best way to keep your data up to date is to use a dashboard that tracks and updates in real time. That way, stakeholders won’t need to wait until the next update to get the most recent information—they can just check the dashboard.

If you do track your KPIs manually, make sure you update at regular intervals that make sense for your project. For fast-moving projects, consider sharing updates weekly so everyone is tuned in to any changes. For longer-term, slower-moving projects, consider reporting biweekly or monthly to ensure each update includes enough information to be useful.

If possible, track and share progress in the same place you manage work so your team understands how their individual work contributes to the KPI and, as a result, to your broader company goals. At Asana, we use goal management software to connect our company goals to the work that supports them. With Goals, team members can prioritize projects to get their highest-impact work done.

Examples of KPIs

Key performance indicators are the compass that guides organizations towards their goals. Here are some typical examples of KPIs for different areas.

Financial KPI examples

When it comes to the financial health of a business, key performance indicators act as vital signs. For example, return on investment (ROI) is a common financial KPI. It measures the profitability of an initiative against its cost. To put it simply, if a company spends $1,000 on a marketing campaign and generates $5,000 in sales, the ROI KPI indicates a successful outcome.

When exploring financial metrics, you'll frequently find these examples of KPIs in use.

Net profit margin: Shows what percentage of your sales is actual profit.

Gross profit margin: Tells you how much you're making after covering the cost to make or buy your products.

Operating cash flow: Measures the cash your business makes from normal business operations.

Customer KPI examples

Customer-related KPIs show how well a company is performing from the standpoint of its clientele. Support tickets are a common key performance indicator here. They reflect the number of queries or issues customers report. If a new product launch sees a spike in support tickets within a short period of time, this KPI might signal the need for product improvements or better customer education.

It’s not uncommon for those working in the customer service industry to see the following examples of KPIs.

Customer satisfaction score: A quick way to see how happy people are with what you sell.

Net promoter score: Tells you if your customers like your product enough to tell their friends.

Customer retention rate: Measures how well you're keeping your customers over time.

Process KPI examples

To streamline operations, organizations can track process KPIs. An example is the employee turnover rate. This helps teams understand how often they have to replace staff. A high turnover rate over a six-month period of time could point to deeper issues within the work environment that need addressing.

Here are a few other common examples of KPIs you'll see in process tracking.

Efficiency ratio: Used to check if you're making good use of what you own to make money.

Cycle time: Measures how long it takes to get something done from start to finish.

First-time right: Shows how often you get things right the first time without any do-overs.

Marketing KPI examples

Marketing efforts can be gauged using website traffic as a key performance indicator. This metric helps businesses optimize their online presence. For example, if a new blog post aimed at explaining the different types of KPIs sees a 50% increase in visitors, the content can be considered effective in attracting more interest.

In the marketing department, it's common to come across the following examples of KPIs.

Cost per lead: Helps you figure out how much you're spending to get someone interested in what you're selling.

Conversion rate: Tells you what percentage of your website visitors are doing what you want them to do.

Click-through rate: Shows how often people click on a link you've given them.

Project management KPI examples

Project managers often use a "balanced scorecard," a strategic KPI framework that evaluates initiatives from various perspectives—financial, customer, process, and growth. 

Let's say a sales team is tasked with improving customer outreach. Their scorecard may reflect how well they're meeting this organizational goal across different performance measures, like sales KPIs, over a quarterly time frame.

For a closer look at project management metrics, consider these other examples of KPIs.

Return on investment: Measures whether the money you put into something is worth what you're getting out of it.

Earned value: Helps you see how much of your project you've gotten done at any point.

Critical path length: Measures the total time your project will take, based on the things you can't skip.

Keeping an eye on these key performance indicators helps you figure out how close you are to hitting your goals and what you might need to tweak to get there.

Pros and cons: Key performance indicators

Key performance indicators can be extremely useful, but they also have their drawbacks. Let's take a closer look at both sides.

Benefits of KPIs

They help managers see specific issues through clear data, which is great for making plans and improving an organization.

They use hard numbers to show how employees are doing, which keeps everyone on the same page and removes guesswork.

They can actually motivate employees to do better when they see their performance is being analyzed.

They link day-to-day work with the company's bigger targets and show if the company is really getting to where it wants to go.

Disadvantages of KPIs

It can take a lot of time to collect KPI data, especially if you're looking at how things change over several years.

You have to keep an eye on your indicators and update them to make sure they're still useful.

There's a risk that managers might just focus on hitting KPI numbers instead of truly improving the business.

If the specific goals aren't set right, they can be too tough to meet, which can stress out team members.

KPIs vs. OKRs

KPIs aren’t the only way to track project performance. OKRs , or objectives and key results, are another type of measurement tool that functions in a similar way to KPIs. In fact, in many cases, the KPIs and OKRs for a project could overlap.

Here are the differences and commonalities between KPIs and OKRs:

Key performance indicator (KPI): Designed to measure performance over time, a good KPI should track one measurable value that can indicate the rate of progress toward a goal.

Objectives and key results (OKRs): OKRs use the template “ I will [objective] as measured by [key result]. ”The objective is the goal you want to achieve and the key results are the metrics used to track progress toward that objective. You can have more than one key result for each objective.

KPIs often overlap with OKRs, but the difference is that OKRs don’t have to be quantifiable measures. For example, you could set an OKR to “Improve the workplace environment as measured by employee morale,” even though your OKR, employee morale, is intangible. If you wanted to set a KPI for the same objective, you’d have to find a way to quantify employee morale—say, number of HR complaints received or new hire turnover rate.

OKR vs KPI examples

Here’s another example of potential OKRs and KPIs for a customer experience team.

Example KPI: Increase net promoter score (NPS) by 2 points in FY21.

Example OKRs: 

Objective: Surprise and delight our customers to increase customer satisfaction and loyalty.

Key result: Generate positive buzz through social media and virtual events.

Key result: Reduce churn to less than 2% per month.

Key result: Increase net promoter score (NPS) by 2 points in FY21.

What does KPI stand for?

KPI is an acronym that stands for "key performance indicator." It's a term used widely across various industries to describe measurable values that organizations can track to gauge how effectively they are achieving key objectives.

What is the most important KPI?

The most important KPI often depends on the specific goals of an organization. For many, it could be related to financial performance, like net profit margin, which shows the amount of profit made as a percentage of revenue. However, what's most important is that the KPIs a team chooses should directly support their specific goals, ensuring that they are relevant and provide actionable insights.

What is a KPI in marketing?

A key performance indicator in marketing refers to a measurable metric that marketing teams use to assess the effectiveness of their campaigns and specific goals. For example, a marketing team may track the conversion rate of a campaign to determine how effectively it turns prospects into customers.

What is a KPI in business?

In a broader business context, a KPI serves as a numerical indicator that organizations use to measure their performance against their strategic goals. Teams can automate the collection and reporting of these metrics, thanks to integrations with business intelligence tools, which allows for real-time monitoring and more informed decision-making.

KPIs, OKRs, SMART goals, oh my!

KPIs are a great way to set quantifiable goals that connect to your strategic objectives. But if KPIs don’t feel right for you, th ere are a variety of other goal-setting methodologies you can try.

To get started, read our articles about how to set OKRs , write better SMART goals , or create great short-term goals .

Related resources

How to accomplish big things with long-term goals

What are objectives and key results (OKRs)?

Fix these common onboarding challenges to boost productivity

How Asana uses work management to optimize resource planning

Key performance indicators

Table of Contents

What is a kpi.

KPI stands for key performance indicators. This is a quantifiable measurement of performance over time for a specific activity that is tied to a company objective.

A key performance indicator can help you better understand your business’ financial and operational achievements, so you can see where you’re at and make improvements to your strategy.

Picture Robin Hood aiming for his archery target. Without the target, Robin Hood wouldn’t know where to aim his bow. But, with the target, he can measure exactly how far off he is from his goal, so he can adjust his aim, strength, or his bow.

The same is true for the KPIs in your business. They give you a clear marker of how you’re performing so you can understand if you’re in the right direction, or if you need to make strategic adjustments along the way.

A KPI provides your business with a target to shoot for, milestones to track your performance over time, and insights to help your organization's leaders make better decisions. From marketing to sales to finance and even HR, key performance indicators can help improve productivity, progress, and achievement across every area of your business.

What is KPI reporting?

KPI reporting is the business management practice of measuring, organizing, and analyzing a business’ most important key performance indicators.

KPI reports help business leaders identify strengths and weaknesses, optimize company performance, improve engagement, and reach strategic goals. Managers also use KPI reporting to analyze trends in specific departments or in the business as a whole to improve decision-making.

KPI reporting is typically presented visually in the form of an interactive dashboard. KPI dashboards give managers a quick overview of the essential data points associated with your specific key performance indicators.

KPI dashboards present your KPIs in an easily digestible format so managers can quickly analyze and extract the most crucial information to help them optimize their overall strategy.

How to measure KPI

If you’re going to be successful in your KPI tracking, then you need to build a proper KPI measurement framework, or use a KPI Tree Template . Here are six steps to setting a framework for your KPI measurement:

1. Determine your main goal(s)

The first step to measuring your KPIs is to first identify which KPIs you'll be tracking. To figure out your KPIs, you need to first determine the goal you and your team are working towards. For instance, the goal of a specific marketing campaign could be to generate $50,000 in revenue or bring in 50 leads. No matter what your goal is, we’ll use it to establish KPIs.

2. Establish primary KPIs

Now that you have your overall goal, it’s time to establish your primary KPIs. These are significant KPIs designed to measure the overall results of your campaign and whether it was a success or not. Some primary KPI examples include the amount of revenue generated by specific channels like email marketing or Facebook ads. Or, if your goal is brand awareness, it could be your overall reach or impressions on different social platforms.

3. Establish secondary KPIs

Next up, it’s time to establish secondary key performance indicators to further understand the success of your campaign. These could be three to five additional metrics that are important to your campaign but not necessarily your primary KPI. For instance, if your primary KPI is email revenue generated, secondary KPIs could include average order value or return customer rate.

4. Choose health metrics

Next, we’ll establish metrics that'll help you understand the overall health of your campaign, rather than whether or not you've reached your primary goal. Following our email marketing KPIs, health metrics could include metrics like open rate, click rate, and total email opens.

5. Establish specific KPI targets

Now that you’ve chosen the KPIs that you’ll track, it’s time to determine the exact numerical target for each KPI. The numbers you establish should be realistic and measurable numbers to help you stay on track. Simply stating you want to earn more revenue from email marketing isn’t enough. Get specific. State that you want to generate $50,000 from the campaign, with $20,000 of that coming from email. If your average order value (AOV) is $50, set a goal for your AOV to be $60. Aim for a 40% email open rate if you usually get 35%.

By setting specific, measurable KPIs, you’re much more likely to achieve them or at least come close.

6. Set up benchmarks

Finally, you need to set up benchmarks. Remember to look at past campaign performance to better understand what a typical benchmark for KPIs is. But, don’t stop there. Look at competitors. Look at others in your industry or similar businesses in other industries. By understanding where you’re at relative to your competitors or your own past performance, it'll help you determine whether you’re on the right track or not.

Benefits of tracking KPIs

KPIs are a critical part of any business strategy to ensure you’re staying on track and improving performance. Here are a few reasons why you should be tracking KPIs.

Measure performance

First off, KPIs help you measure your performance. If you’re just “winging it” when you’re working on a project or a campaign, how will you know whether or not you’re a success?

Without KPIs, you’ll be driving blind, not knowing what’s improving or worse yet‌‌ — ‌harming — your organization.

Tracking KPIs can help you measure your progress — or lack thereof — toward crucial business goals.

Improve employee morale and engagement

A business is nothing without people, and a business is almost as good as nothing if people aren’t engaged. One key path to improving engagement at work is by establishing KPIs.

You may think that pressuring your team to hit certain targets will make them dislike their job. But, the opposite is true. People crave growth. Establishing KPIs for individuals and different departments is a great way to get your team engaged.

Remember to align your KPIs with organizational goals and goals for your department. The better you can tie your KPIs to a deeper, purposeful goal, the more engaged your employees will be and the greater company morale will be overall.

Improve decision-making

KPIs provide leaders with key insights into their organization and department. They offer more than just numbers on a page or a screen. They offer valuable information that can help you understand what specific points of action are improving your business and what ones are hurting it.

Instead of just making decisions based on gut feelings, you can use KPIs to make data-informed decisions that will improve your odds of success.

Examples of KPIs

Curious to know what the most commonly tracked KPIs are?

Here are a few examples of KPIs, broken down by different departments that you can use as a baseline to establish your own key performance indicators:

Revenue by channel

Customer satisfaction

Conversion rates

Marketing qualified leads (MQLs)

Return on investment (ROI)

Return on advertising spend (ROAS)

Customer acquisition cost (CAC)

Total sales generated

Sales volume by location

Sales qualified leads (SQLs)

New inbound leads

New qualified opportunities

Total pipeline value

Average order value

Operating profit margin

Gross profit margin

Net profit margin

Operating expense ratio

Working capital ratio

Return on investment

Customer Service

Average response time

First contact resolution rate

Cost per conversation

Customer effort score

Most active support agents

What makes for an effective KPI?

Now that you know a few different types of KPIs you can track broken down by department, it’s time to figure out what makes for an effective KPI so you know how you can craft yours the right way.

First and foremost, the KPIs you track should be relevant to your role, team, department, and business. It should be connected with your team and organization’s overall business goals and mission.

For example, let’s say your company is aiming to increase annual recurring revenue (ARR) by 30% at the end of the year. If you’re on the marketing team, you might consider tracking conversion rates as this directly aligns with revenue.

KPIs need to be measurable. If you don’t know how to measure it, then you need to change it or throw it out. When you set up KPIs, ask yourself, ‘What am I trying to achieve? What is my desired end result?’

You need to make sure you don’t just set a number, but also a date. By setting a deadline, you will have a clear yes or no on whether you hit your KPI goals or not.

Your KPIs can’t be vague, and they can’t be passive. You need to set KPIs that can be achieved by taking specific actions. Once you have your KPI, it should be relatively straightforward to make an action plan broken down into smaller goals to achieve success.

Finally, your KPIs need to be simple. Don’t get too complicated, and don’t track too many. You don’t need to track every single possible KPI. Depending on your overall goals, you should only stick to a few primary KPIs and potentially some secondary ones.

What’s the difference between KPIs and OKRs?

So, how are KPIs different from OKRs? Are they the same? Do you choose one or the other?

Simply put, OKRs and KPIs work together. However, they serve different purposes.

While key performance indicators measure performance against specific targets, you can create OKRs, or objectives and key results, to achieve goals within a specific period of time that align with an organization's vision.

Objectives and Key Results (OKRs)

Objectives and key results are broken down into two parts.

Think of objectives as where you want to go. For example, an organization may decide they want to evolve their brand image from cheap to premium. This is an objective.

Key results are how you’re going to achieve your strategic objectives. These are measurable metrics to track your progress. For instance, if you’re trying to become a more premium brand, one key result may be increasing your average product price from $60 to $100. Another one may be upgrading the materials used to make your products from a $10 manufacturing cost per product to higher quality manufacturing for $20 per product.

Key Performance Indicators (KPIs)

The way KPIs fit into an OKR strategy is one step lower. Think of Objectives as the bird’s eye view. Key results are skyscraper buildings. Key performance indicators are the foundation on which key results lay.

For instance, a key performance indicator aligned with the objective to become a premium brand and increase your average product price might be to track your average order value (AOV). In this example, if you raise your price point, you’ll want to track if the AOV is aligning with it and by how much. Perhaps the average order value isn’t rising even though you’ve raised your prices.

Another KPI you could track is your conversion rate. Since you have started raising your prices, are your conversion rates dropping? They’re likely going to dip down to some degree. If it’s too much, perhaps you moved the price up too high too quickly.

Collaboratively set and track your KPIs

With Miro, teams can collaboratively define, visualize, and monitor KPIs in real-time. Whether you need to track sales targets, project milestones, or customer satisfaction metrics, Miro makes it easy to document your KPIs in one shared space, fostering transparency and accountability. Sign up for free to get started!

Get on board in seconds

Join thousands of teams using Miro to do their best work yet.

BUSINESS STRATEGIES

21 KPI examples every business needs to know

• Victor Sklyanik
• Mar 29, 2021

There are a lot of ways businesses and teams measure success. You can take a look at your profits month over month, or examine how your business has grown over a set period of time. However, if you want to get a well-rounded overview of how your company is performing in specific areas, then you need to look at KPIs.

KPIs, or key performance indicators, can be used by any type of business, from self-employed freelancers to small business owners and companies with dozens of employees. There are many different types of KPIs that can be used across multiple departments and teams. For example, you might create a website and then measure the success of clicks or conversions using KPIs. Alternatively, your HR team can apply them to your onboarding process to see how many employees you’re retaining.

Since there are dozens of different KPIs out there, it can be tough to know which ones to focus on if you’re just getting started. Here, we’ve gathered some of the most important KPI examples that you can use for your business.

What are KPIs?

A key performance indicator is a metric that measures the performance of a business, team, individual, or project. They’re one of the main ways of assessing whether or not you’re meeting your goals or target objectives.

KPIs need to be measurable so that you can monitor change over time. In addition, they need to have a distinct goal as well as a clear source of data that can be relied upon for important decisions. This data needs to be looked at often so that you can continuously track your KPIs to see how close you are to your goals.

While there are hundreds of different KPIs out there, there’s no need to implement all of them for your business. When looking at the overall performance of your business, stick with around five different KPIs to measure your progress (see business strategy examples to learn more). Then, you can also track more specific KPIs for each department, such as marketing, sales, HR, customer service and development. This will help each department work together towards a more clearly defined goal, while still working towards the overall company targets.

KPI examples and definitions

These are some of the most common KPIs broken down into industry or department. If you’re starting a business , understanding the types of KPIs available to you is crucial for assessing future success (see business strategy examples ). You might want to use a few of them for each one of your teams, or just select a few important KPIs for your entire business.

Sales KPI examples

01. Total Sales Volume: Measures the total volume, in dollars, of sales each month. Create a monthly or quarterly target so that your sales team has a goal, and be sure to adjust it regularly for dips or increases in sales which might occur around seasonal events or holidays.

02. Sales Cycle Length: Taking too long to complete a sale can negatively impact your bottom line and prevent you from reaching your quarterly goals. This KPI helps you measure how long it takes for a sale to be completed from start to finish.

03. Sales By [Metric]: You can break down where your sales are coming from by different metrics, such as region, age, sex, demographic, interests, etc. This helps you see which clients are bringing in the most revenue and which are underperforming.

04. Sales Cost to Volume Ratio: Making a sale is almost never free. A good chunk of your budget is probably going into each sale, with costs like salary or commissions, marketing costs, etc. That’s why it’s important to measure your sales expenditures vs. what your sales team is generating. This will help you see if your sales team is operating efficiently or not.

Financial KPI examples

05. Revenue: In and of itself, revenue isn’t a KPI, but depending on your business, there are a few ways to measure this in terms of performance. Calculating your profit minus your costs is one of the main ways companies determine if they’re generating revenue.

You should be measuring this KPI regularly by year, quarter and by month.

Create a yearly revenue plan where you map out your expectations, then track your revenue over each quarter and month. Next, compare it to your yearly plan to see if you’re meeting your goals or if your initial yearly plan needs to be adjusted to meet more realistic expectations.

06. Free Cash Flow: This metric measures how much you can generate compared to your company’s operation costs. In order to calculate your free cash flow, you need to subtract your capital expenditures from your operating cash flow. This KPI is often used by investors to see if a business is profitable or not.

07. Gross Profit Margin: Get a percentage value of your total sales revenue. This KPI doesn’t look at expenses, but instead focuses mainly on profits. It’s a good yardstick to use when comparing your profits to that of your competitors.

08. Net Profit Margin: This KPI looks at the total percentage of your revenue after you deduct all your expenses, like operating costs, taxes and interest. Net Profit Margin is more helpful for internal comparison of your profits.

Marketing KPI examples

09. Traffic: This is a pretty common KPI example. Here, you’re looking at the total number of visitors to your business, whether it’s traffic to your website or visitors in a physical location. You can measure the differences of this KPI over any amount of time, such as by hour of the day, day of the week, or month after month to see when you’re getting the most visitors.

10. Cost Per Lead: Once your traffic is converting into leads, you’ll probably want to know what each lead is costing. You might look at your cost of bringing in traffic or running your campaigns. This is a common KPI in online marketing and it usually measures how many people express interest in your business vs how many people see your ad or campaign. Many popular web analytics tools will allow you to set up this KPI to easily keep track of your progress.

11. Cost Per Phone Call: Sometimes the goal of your advertising campaign is to bring in calls. Calls can either directly be the source of sales or, if not, can be the start of a relationship between a potential customer and a business. When someone calls a business, they are likely very interested in what they have to offer, making cost per phone call a good metric. The complication, however, is that it may be difficult to track which advertisement brought in the call. Consider using a call tracking service to help you determine whether your ad spend was worthwhile.

12. Conversion Rate: A conversion rate takes things a step further than the cost per lead. This KPI measures how many conversions, or sales, you get compared to traffic. For example, if your website sees 1,000 visitors a month and you make 50 sales, your conversion rate is 5%.

13. Time on Site: This is one of those KPI examples that often stumps marketers since it can be tricky to optimize. You want to see how much time visitors are spending on your site before exiting or converting. If they’re leaving your site after only a few seconds, it’s likely that something is wrong with your website performance, usability, relevance, or content.

Customer KPI examples

14. Customer Lifetime Value: Customer relationships are important, but it’s necessary to know how much value each client brings to your business. Customer lifetime value calculates how much monetary value you get from a client’s entire history with your company. To calculate this, you need to look at metrics like total purchase values and the number of purchases over time.

15. Customer Acquisition Cost: If you want to measure the effectiveness of your marketing, you need to look at how many clients it’s bringing you and whether it fits into the cost of your campaign. To arrive at this KPI, divide the total number of new clients you have by your acquisition expenditures.

16. Abandon Rate: This is an important metric for a customer support team since it can help you mitigate the number of unsatisfied clients. If clients are calling or chatting and then hanging up or getting disconnected before speaking to a representative, it’s important to understand why. Is your wait time too long? Did they find answers elsewhere? Abandon rates will help you understand your clients better and also optimize your customer support resources.

17: First Contact Resolution: Another important KPI for your customer support team is the rate of first contact resolution. Measure the number of clients who need to reach out to customer support multiple times for the same issue. This will help you understand where your team needs extra training to learn to resolve issues quicker, or where your process needs to be improved to avoid repeat contacts for the same issue.

HR KPI examples

18. Employee Turnover Rate: The overall success of your business depends heavily on your employees, so it’s crucial to know how often your team is changing. Calculate the number of employees who have left in a period of time by your total employees. A high rate might mean it’s time to reexamine your onboarding process, employee expectations, or company culture.

19. Revenue Per Employee: This is another common KPI that helps measure efficiency. You want to see how profitable each employee is, so start by calculating your total revenue by your total number of employees. Many investors will ask for this KPI as well since it’s a good indicator of how a company manages costs.

20. Employee Satisfaction: Send out regular surveys or quizzes to understand how satisfied your employees are with your company and their jobs. This can be a challenging KPI to measure accurately, but it will help the health of your business by showing you which employees or teams need attention before they’re unhappy enough to quit and leave you with gaps in your operation.

21. Training Costs: You should be looking at how much you’re investing in each employee’s training. New hires will usually cost more, but there’s also the cost of ongoing training and education. A high rate of training costs isn’t always a bad thing. Investing in your employees can often lead to higher employee satisfaction and more productive workers.

Tips for choosing the right KPIs for your business

While it’s important to be aware of the many KPI examples, it’s even more important to assess which KPIs will help your business succeed. Not all KPIs will be relevant to every type of business , so take your industry, goal, and your company’s needs into consideration.

For starters, ask yourself what you’re trying to achieve with your business. You can break this down by year or quarter to focus on different aspects of your company and use different KPIs. Maybe one quarter you want to pay closer attention to generating more leads, in which case you’d use more marketing KPIs, and then the following quarter you want to turn those leads into sales. Your KPIs should follow your general goals, not the other way around.

Here are a few things to keep in mind to help you select the right KPIs to use for your business:

Make sure your KPIs directly relate to your goal. If your goal is to boost sales, look at things like site traffic and conversion rates.

Focus on a few key metrics. Instead of measuring anything that can be measured just for the sake of it, focus on a handful of KPIs at a time. Only once they’re optimized, move on to a different set of KPIs.

Consider what stage your company is in. Are you just starting out? Going to market? Rebranding? Each stage will have a different set of goals and metrics to measure.

Stay away from vanity metrics. Some KPIs help your business look good, but don’t really mean much in terms of reaching your goals. Metrics like “likes,” views, or clicks might seem impressive, but don’t mean much in terms of whether or not you’re moving closer to your goal. Choose KPIs that help you move your business forward over ones that only look good on paper.

Look at your competitors. There’s nothing wrong with borrowing a set of KPIs from your competitors. If you have a similar business model, products, or services, it can be really helpful to know how you’re performing comparatively.

Related Posts

How to start an LLC in Indiana in 7 steps

Partners for life: 7 things to look for in a B2B partnership

The modern seller's guide to eCommerce photography

Was this article helpful?

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

Create KPIs That Reflect Your Strategic Priorities

• Graham Kenny

Start by identifying your most important stakeholders.

This article argues that a company should structure its key performance indicators around key stakeholder groups, such as customers, employees, suppliers, regulators, funding sources, and the communities in which they operate.  Managers who fail to do this risk ignoring performance along key dimensions necessary for success. Leaders should begin by identifying the important stakeholder groups and then listing a full range of measures that track both how well the company meets stakeholder expectations and vice versa.  An executive team should winnow the list down to two or three KPIs per stakeholder.

“What do you think of our scorecard?” asked Phil (not his real name), the CEO of the main roads department of a large Australian state. Phil had emailed me his organization’s scorecard of 29 key performance indicators (KPIs) to review ahead of a workshop I was to run for them. Unfortunately, I could see that, aside from being on the long side, the list was skewed and biased, with large holes that would leave the department vulnerable to underperformance in critical areas.

• Graham Kenny is the CEO of Strategic Factors and author of Strategy Discovery . He is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. He has been a professor of management in universities in the U.S. and Canada.

Partner Center

• Customer Support
• Product Documentation
• Corporate Social Responsibility
• Diversity, Equality, Inclusion, and Belonging
• Academic Program
• Global Offices
• Support Portal
• Qlik Continuous Classroom
• Partner Portal
• Talend Cloud
• Talend Academy

Integrate, transform, analyze, and act on data

Qlik Staige

Bring your AI strategy to life with a trusted data foundation and actionable predictions

Integrations & Connectors

Connect and combine data from hundreds of sources

Featured Technology Partners

Data Integration and Quality

Build a trusted data foundation

Core Capabilities

• Data Streaming
• Application and API Integration
• Data Lake Creation
• Application Automation
• Data Warehouse Automation
• SAP Solutions
• Data Quality and Governance
• Stitch Data Loader

Guided Tour

Data Sources and Targets

Access and integrate the data you need to deliver greater business outcomes

Data Integration Buyer's Guide: What to Look for in a Data Integration Solution

Take action with AI-powered insight

Embedded Analytics

• Augmented Analytics
• Visualizations and Dashboards

Try for Free

Data Sources

Connect and combine data from hundreds of sources to fuel your ever-evolving analytics needs

Qlik Platform Services for Analytics

Maximize the value of your data with AI

• Integration and Connectors
• Qlik Staige - Artificial Intelligence Built-in

Generative AI Benchmark Report

All Data Integration and Quality Products

Qlik Cloud® Data Integration

Get a trusted data foundation to power your AI, ML, and analytics

Qlik Application Automation®

Automatically trigger informed action on most SaaS applications

Qlik Replicate®

Accelerate data replication, ingestion, and streaming.

Talend Data Fabric

Unify, integrate, and govern disparate data environments

Qlik Compose® for Data Lakes

Automate your data pipelines to create analytics-ready data sets

Talend Data Inventory

Find and improve data in a shared, collaborative workspace

Qlik Compose® for Data Warehouses

Automate the entire data warehouse lifecycle

Talend Data Preparation

Identify errors, and apply and share rules across massive datasets

Qlik Enterprise Manager®

Centrally configure, execute, and monitor replication and transformation

Talend Data Catalog

Understand the data flowing through your analytics pipelines

Qlik Gold Client®

Improve data management in your non-production SAP environments

Talend Data Stewardship

Define priorities and track progress on data projects

All Analytics Products

Qlik Cloud Analytics

All the power of Qlik analytics solutions in a cloud-based SaaS deployment.

Qlik Sense® - Client Managed

The on-premises solution for highly regulated industries.

All AI/ML Products

Bring machine learning to your analytics teams

Financial Services

Manufacturing

Consumer Products

Public Sector

Energy Utilities

US Government

Life Sciences

Communications

Product Intelligence

HR & People

Find a partner

Get the help you need to make your data work harder

Global System Integrators

Transform IT services, solution development, and delivery

• Data Integration and Quality Pricing Rapidly deliver trusted data to drive smarter decisions with the right data integration plan.
• Analytics Pricing Deliver better insights and outcomes with the right analytics plan.
• AI/ML Pricing Build and deploy predictive AI apps with a no-code experience.

NASA scientists and data scientists have more in common than you might think. See why — and learn how you can chart your own path to data-driven discovery at Qlik Connect.​

Revealing The New Qlik Brand

Hitting the Ground Running with Generative AI

Enter Qlik Staige – Helping customers unleash the full potential of Artificial Intelligence

Artificial Intelligence

Act on insights with AI-powered analytics

Data Management

Collect, store, organize, and maintain data

Bring automated machine learning to analytics teams

Data Quality

Discover, manage, enhance, and regulate data

Data Fabric

Data Visualization

Make it easier to see trends and relationships in your data

Data Catalog

Find the data you need and evaluate its fitness for your use case

Integrate applications and data sources

Data Governance

Ensure data is trustworthy and consistent

Predictive Analytics

Predict future outcomes based on historical and current data

Data Literacy

Read, work with, analyze, and communicate with data.

Domino's Radically Improves Efficiency, Customer Service — and Sales with Real-time Data and Analytics

Urban Outfitters Reduces Store Level Reporting from Hours to Minutes

Data Research Went From Thousands of Hours to Near Real Time at Georgia-Pacific

The Economic Impact of Cloud Analytics

Visionary Voices Episode 2: Taking AI from Trends to Reality

Customer Stories

More than 40,000 customers find answers with Qlik.

Analyst Reports

Read analyst reports for data integration and analytics.

Whitepapers and eBooks

Visit the Qlik Resource Library.

Visit the Qlik Webinar Library.

Visit the Qlik Video Library.

Datasheets & Brochures

Visit the Qlik Datasheet and Brochure Library.

AI analytics refers to the use of machine learning to automate processes, analyze data, derive insights, and make predictions or recommendations.

Business Intelligence

Data Analytics

Data Mining

Data Warehouse

Predictive Modeling

Community Overview

Welcome to the Qlik Community

Qlik Gallery

Get inspired by recent Qlik apps and discuss impacts with peers

Get support directly from a community of experts

Plot your path of engagement with Qlik

Vote for your favorite product ideas and suggest your own

Training Overview

World-class resources to adopt Qlik products and improve data literacy.

Instructor-Led Learning

Get interactive, hands-on learning with Qlik experts

Free Training

FREE courses and help, from basic to advanced

Literacy Program

Understand, analyze, and use data with confidence.

Self-Paced Learning

Get hundreds of self-paced training courses

Validate Your Skills

Validate knowledge and skills in Qlik products, analytics, and data literacy

• Why Qlik Turn your data into real business outcomes
• Technology Partners and Integrations Extend the value of Qlik data integration and analytics
• Data Integration
• All Products
• By Industry
• Solution Partners

Data Integration and Quality Pricing

Rapidly deliver trusted data to drive smarter decisions with the right data integration plan.

Analytics Pricing

Deliver better insights and outcomes with the right analytics plan.

AI/ML Pricing

Build and deploy predictive AI apps with a no-code experience.

• Topics and Trends
• Resource Library

What is a KPI?

This guide provides examples, templates and practical advice to help you define the right key performance indicators for your organization and team.

KPI stands for key performance indicator, a quantifiable measure of performance over time for a specific objective. KPIs provide targets for teams to shoot for, milestones to gauge progress, and insights that help people across the organization make better decisions. From finance and HR to marketing and sales, key performance indicators help every area of the business move forward at the strategic level.

KPI Meaning vs Metrics Meaning

While key performance indicators and metrics are related, they’re not the same. Here’s a quick explanation:

KPIs are the key targets you should track to make the most impact on your strategic business outcomes. KPIs support your strategy and help your teams focus on what’s important. An example of a key performance indicator is, “targeted new customers per month”.

Metrics measure the success of everyday business activities that support your KPIs. While they impact your outcomes, they’re not the most critical measures. Some examples include “monthly store visits” or “white paper downloads”.

Don’t just measure. Measure what matters.

Download the KPI Planning Guide to learn:

10 steps to strong KPIs

Which questions help you define your KPIs

170 KPI examples and templates

Why Are KPIs Important?

KPIs are an important way to ensure your teams are supporting the overall goals of the organization. Here are some of the biggest reasons why you need key performance indicators.

Keep your teams aligned: Whether measuring project success or employee performance, KPIs keep teams moving in the same direction.

Provide a health check: Key performance indicators give you a realistic look at the health of your organization, from risk factors to financial indicators.

Make adjustments: KPIs help you clearly see your successes and failures so you can do more of what’s working, and less of what’s not.

Hold your teams accountable: Make sure everyone provides value with key performance indicators that help employees track their progress and help managers move things along.

Types of KPIs

Key performance indicators come in many flavors. While some are used to measure monthly progress against a goal, others have a longer-term focus. The one thing all KPIs have in common is that they’re tied to strategic goals. Here’s an overview of some of the most common types of KPIs.

Strategic: These big-picture key performance indicators monitor organizational goals. Executives typically look to one or two strategic KPIs to find out how the organization is doing at any given time. Examples include return on investment, revenue and market share.

Operational: These KPIs typically measure performance in a shorter time frame, and are focused on organizational processes and efficiencies. Some examples include sales by region, average monthly transportation costs and cost per acquisition (CPA).

Functional Unit: Many key performance indicators are tied to specific functions, such finance or IT. While IT might track time to resolution or average uptime, finance KPIs track gross profit margin or return on assets. These functional KPIs can also be classified as strategic or operational.

Leading vs Lagging: Regardless of the type of key performance indicator you define, you should know the difference between leading indicators and lagging indicators. While leading KPIs can help predict outcomes, lagging KPIs track what has already happened. Organizations use a mix of both to ensure they’re tracking what’s most important.

How to Develop KPIs

With so much data, it can be tempting to measure everything—or at least things that are easiest to measure. However, you need to be sure you’re measuring only the key performance indicators that will help you reach your business goals. The strategic focus is one of the most important aspects of the KPI definition. Here are some best practices for developing the right KPIs.

Define how KPIs will be used: Talk to people who will be using the KPI report to find out what they want to achieve and how they’ll use them. This will help you define KPIs that are relevant and valuable to business users.

Tie them to strategic goals: If your KPIs don’t relate to what you’re trying to achieve in your business, you’re wasting time. While they may be related to a specific business function like HR or marketing, every key performance indicator should tie directly back to your overall business goals.

Write SMART KPIs: The most effective KPIs follow the proven SMART formula. Make sure they’re Specific, Measurable, Attainable, Realistic and Time-Bound. Some examples include “Grow sales by 5% per quarter” or “Increase Net Promoter Score 25% over the next three years.”

Keep them clear-cut: Everyone in the organization should understand your KPIs so they can act on them. This is why data literacy is so important. When people understand how to work with data, they can make decisions that will move the needle in the right direction.

Plan to iterate: As your business and customers change, you may need to revise your key performance indicators. Perhaps certain ones are no longer relevant, or you need to adjust based on performance. Be sure you have a plan in place to evaluate and make changes to key performance indicators when necessary.

Avoid KPI overload: Business intelligence has given organizations access to mounds of data and interactive data visualization , making it easy to measure anything and everything. Keep in mind that the key performance indicator definition refers to the most important targets. Steer clear of KPI overload by focusing on the most impactful measures.

Inspire Action With Your KPIs

10 ways to take your data visualizations to the next level. Learn how to choose the right ones to highlight your KPIs and metrics.

3 Steps to a Stronger KPI Strategy

If your key performance indicators aren’t delivering the results you expect, it’s time to adjust your strategy. Here are three things you can do to ensure that people across the organization know what your KPIs mean, and how to use them to make data-driven decisions that impact your business.

Select KPIs that matter most: To be sure you’re measuring what matters, you should include a balance of leading and lagging indicators. Lagging indicators help you understand results over a period of time such as sales over the last 30 days. Leading indicators help you predict what might happen based on data, allowing you to make adjustments to improve outcomes.

Create a KPI-driven culture: Key performance indicators don’t mean much if people don’t understand what they are and how to use them (including what the KPI acronym means). Increase data literacy in your organization so everyone works toward strategic targets. Educate employees, assign them relevant KPIs, and use a best-in-class BI platform to keep everyone making decisions that move your business forward.

Iterate: Keep your key performance indicators current by revising them based on market, customer and organizational changes. Meet regularly to review them, take a close look at performance to see if adjustments need to be made, and publish any changes you make so teams are always up to date.

KPI Examples

Every business unit has unique key performance indicators that help them track progress. Many organizations use  KPI dashboards  to help them visualize, review and analyze their performance metrics all in one place. Here are a few  KPI examples by department , including a dashboard view of each.

Customer Service

From expense and revenue to margin and cash management, finance managers have lots of choices when it comes to tracking financial progress. Here are a few examples to consider as you define your own key performance indicators.

Gross Profit Margin (and %)

Operating Profit Margin (and %)

Net Profit Margin (and %)

Operating Expense Ratio

Working Capital Ratio

Explore a Finance Dashboard Demo

Ensure your teams are meeting sales targets by tracking and regularly reviewing sales key performance indicators, including those for leads, opportunities, closed sales and volume. Here are some examples of KPIs for sales teams:

New Inbound Leads

New Qualified Opportunities

Total Pipeline Value

Sales Volume by Location

Average Order Value

Learn More About Sales Dashboards

Get a handle on marketing spend, conversion rates and other indicators of marketing success by clearly defining key performance indicators and aligning them with your organization’s strategic goals. Here are a few marketing KPIs to get you started.

Marketing Qualified Leads (MQLs)

Sales Qualified Leads (SQLs)

Conversion Rates (For Specific Goals)

Social Program ROI (By Platform)

Return on Ad Spend (ROAS)

Learn More About  Marketing KPIs and Marketing Dashboards

IT Key Performance Indicators

From support tickets to server downtime, IT key performance indicators can help keep teams accountable and alert them to any potential issues coming down the line. KPIs for IT teams could include targets like the following:

Total Support Tickets

Open Support Tickets

Ticket Resolution Time

Security Related Downtime

IT Costs vs Revenue

Reopened Tickets

Explore Dashboard Examples

Customer service leaders should track progress related to customers, employees and finances. In addition, key performance indicators should cover both short- and long-term targets, including support response times, customer satisfaction and others that help reach service objectives.

First Contact Resolution Rate

Average Response Time

Most Active Support Agents

Cost Per Conversation

Customer Effort Score

What does KPI stand for?

KPI stands for key performance indicator.

Which is the best KPI definition?

Key performance indicators (KPIs) are targets that help you measure progress against your most strategic objectives. While organizations can have many types of metrics, KPIs are targets that are “key” to the success of your business.

What are the different types of KPIs?

Key performance indicators can be either strategic or operational, and apply to specific business units. For example, finance tracks revenue growth rate and net profit margin, sales measures net sales and sales by region, customer service tracks Net Promoter Score and average resolution time, and marketing might measure traffic-to-lead ratio and cost per lead. Operational key performance indicators could include order fulfillment time and time to market.

How do you define KPIs?

There are many factors to consider as you develop your key performance indicators (KPIs). Here are some to keep in mind: Define how they will be used, tie them to strategic goals, keep them SMART (specific, measurable, attainable and time-bound), make them understandable, adjust them as needed, and take care only to measure the most important things.

Which are the best KPIs to use?

While every organization is different, there are a few ways to create high-performing key performance indicators: include a balance of leading and lagging indicators, create a KPI-driven culture by increasing data literacy, and regularly review and adjust your key performance indicators as your audience, market and business change.

See KPI Dashboards in Action

Key Operational KPIs and Metrics to Track in 2024 (+ Template)

Looking for some operations KPIs and metrics?

Operational KPIs and metrics help COOs, heads of operations, and operations managers get a clear understanding of how their operations are performing to ensure their business is on the right track. 

But which metrics should you be tracking? And most importantly, how should you track them so you can make data-driven decisions at any given moment? 

In this article, we will cover how to measure operational performance and highlight the key performance indicators (KPIs) for every aspect of your operations. We will also show you the best and easiest way to track your operational metrics in 2024.

💡Scroll or skip straight to the part you’re most interested in by clicking on the link below: 

What Are Operational KPIs?

Why are operational metrics and kpis important, how to measure operational performance.

• Financial KPIs for Operations Manager
• Customer KPIs for Operations Manager

Operational KPIs for Manufacturing

• Operational KPIs for Logistics 

Operational KPIs for HR Managers

Operational kpis for marketing managers.

• How to track KPIs with Cascade?

Achieve Operational Excellence with Cascade 🚀

Operational KPIs are quantifiable metrics that help evaluate business performance. They're crucial for monitoring the efficiency of day-to-day operations , from production to customer service. With KPIs, you gain valuable insights into key areas of your operations, allowing you to make data-driven decisions that lead to success.

By tracking KPIs for operations, COOs, heads of operations, and operations managers can monitor their progress toward achieving specific goals, identify areas for improvement, and make real-time data-driven decisions to optimize their operations. 

Operational metrics are important for the following reasons:

• They help you align operational processes with the business strategy. By measuring and tracking the right metrics directly tied to business objectives, you can ensure that business operations support the overall strategy.     
• They increase accountability and ownership among your employees. By providing a clear and objective way to measure business performance, employees will know what expectations to meet and take ownership of their work.
• They help you communicate progress to stakeholders. By tracking and reporting on operational metrics and KPIs, you can demonstrate your commitment to continuous improvement and keep management informed of your performance.  
• They help you identify underperforming areas in your operations and immediately react if necessary. This real-time visibility helps you build resilience and flexibility to quickly adapt to challenges and opportunities.

Measuring the performance of your operational plan involves determining the appropriate KPIs that will accurately gauge how close you are to achieving your overall vision and goals. There are various operational metrics that you can use, but you should only select the most impactful ones that will help you meet your strategic objectives . 

When determining and prioritizing your KPIs, you can follow various strategic models. Here are two simple and effective models: 

• Balanced scorecard: It helps you organize KPIs into four focus areas: Customer, Financial, Internal Processes, and Learning & Growth.      
• Cascade model: It’s a strategic planning model that links your KPIs to relevant business objectives. It’s simple and easy to implement, making it suitable for any organization regardless of size and industry. Its simplicity also guarantees a seamless execution.                              

Combined with Cascade’s intuitive KPI tool , implementing these strategic models is a piece of cake. We’ve intentionally integrated them into the platform, so you can spend less time worrying about tracking your KPIs and focus more on executing your strategies . 

In Cascade , you can link your KPIs with strategic objectives. This gives your team clarity on why certain metrics are crucial to track and how they impact the overall business objectives. No matter which model you use, Cascade helps you gather the most accurate data so you can create KPI reports in record time for the management board. 

Now that you have a winning strategic model, here are different KPIs you should track for operational efficiency .

Financial KPIs for COO and Operations Manager

Operational actions will always directly impact your company’s financial health. Staying on top of the following financial KPIs will help you manage resources and processes to increase efficiency, reduce costs, and improve the bottom line. 

• Gross Profit Margin: Generally expressed in percentages, gross profit margin indicates the amount of revenue after subtracting a company's cost of goods sold (COGS) from its net sales. By tracking this KPI, operations managers can gain insights into the company's cost structure and identify areas where they can reduce expenses or improve efficiency.
• Accounts Receivables Turnover: This operational KPI measures how efficiently you collect customer payments. It’s calculated by dividing net credit sales by the average accounts receivable balance. 
• Accounts Payable Turnover: This KPI measures how quickly you pay off your suppliers. It’s calculated by dividing total purchases by the average accounts payable balance. 
• Working Capital: A financial metric that measures the amount of money a company has available to fund its day-to-day operations. It’s an important metric for COOs to monitor because it provides insight into the company's ability to manage its cash flow effectively.
• Operating Cash Flow: This KPI measures the cash your company generates from its operations. It’s calculated by subtracting the operating expenses from the operating revenue. This KPI is essential for assessing your company's financial health and ability to fund future growth.

📚 Recommended read: Financial KPIs - 12 Key Finance Metrics You Should Be Tracking

Customer KPIs for COO and Operations Manager

In a highly competitive business landscape, exceeding customer expectations is crucial to beat the competition. Tracking critical customer KPIs helps you understand how well your company is meeting customer needs and if you’re on the path to building long-lasting customer relationships.

• Customer retention rate: This measures the percentage of customers who continue to do business with your company over time. This is an essential metric for gauging customer loyalty and the overall effectiveness of your organization’s customer service and support.
• First contact resolution (FCR): This measures the percentage of customer inquiries or issues resolved on the first contact with customer support. This is an essential metric for customer satisfaction, as it indicates how well you can address customer needs in a timely and efficient manner.
• Customer satisfaction: This KPI measures customers’ satisfaction level with your products or services. This is a critical metric for gauging customer loyalty and brand reputation. It can be measured through surveys, customer feedback, or other methods.
• Net promoter score (NPS): This measures how likely customers are to recommend your company to others. It’s a widely used KPI in the customer service industry. It is often used to assess customer loyalty and the overall customer experience.
• Churn rate: This measures the percentage of customers who stop doing business with your company over a given time period. A high churn rate can be a warning sign that your company is not effectively meeting customer needs.

Manufacturing KPIs measure the output of your production line and determine the productivity of your entire operational workflow. Monitoring these key metrics will help you spot areas for improvement so you can make changes rapidly and maintain your competitive edge. 

• First Pass Yield (FPY): FPY is a measure of the quality of your company’s manufacturing process. It measures the percentage of products correctly manufactured the first time through the production process without requiring rework or scrap.
• Cycle Time: This is the time it takes to produce a unit of a product from start to finish. Measuring cycle time is crucial because it can help you identify areas where there are bottlenecks in the production process that are causing delays.
• Capacity Utilization: This KPI measures how well your manufacturing facility utilizes its production capacity. It can help you identify areas where the production process can be improved to increase efficiency. It’s calculated by dividing the actual output by the maximum possible output. 
• Throughput: This metric measures the rate at which a manufacturing system can produce finished goods over a specific period of time. It’s typically measured in units per hour, day, or week. This metric helps your production team determine if they can meet production deadlines.
• Machine downtime rate: This is a crucial metric for operations teams that measures the amount of time that production equipment is not functioning as planned. By tracking this metric, operations managers can identify areas for improvement in maintenance and repairs, ultimately improving overall productivity and profitability.

📚 Recommended read: Manufacturing KPIs - Some Commonly Used KPIs For You To Track

Operational KPIs for Logistics

Supply chain and logistics are complex aspects of any business but remain the most fundamental component of a successful operation. Using operational KPIs, you can determine bottlenecks before they become more significant problems and create measures to address them. Here are the most important metrics for logistics operations.

• On-time delivery: This measures the percentage of orders delivered on or before the promised delivery date. This KPI helps you monitor delivery performance and ensure customer satisfaction.
• Order accuracy: This measures the percentage of orders shipped without errors or issues, such as missing items or damaged products. A high order accuracy indicates a well-run logistics operation that delivers quality service to customers.
• Transportation Costs: This KPI tracks the total cost of moving goods from one location to another, including costs associated with shipping, freight, fuel, and other transportation-related expenses. By tracking this KPI, you can identify areas where transportation costs may be higher than expected and take steps to optimize your supply chain and reduce costs.
• Warehousing Costs: This KPI tracks the total cost of storing goods in a warehouse, including expenses related to rent, utilities, labor, and equipment. By tracking this KPI, you can identify areas where warehousing costs may be higher than expected and take steps to optimize your warehouse operations and reduce costs.
• Receiving cycle time: This measures the time it takes to receive and process incoming goods shipments. It includes the time from the shipment’s arrival to its put-away in storage or processing for outbound delivery. A shorter receiving cycle time can help improve inventory accuracy and reduce delays in order fulfillment.

Employees are the lifeblood of any company. Without them, your strategies will never be accomplished. Tracking the right operational KPIs for human resources ensures you maintain high employee satisfaction and keep the right talents crucial to successfully achieving your goals. 

• Employee turnover rate: This measures the percentage of employees who leave your company over a given period of time. A high turnover can be costly in terms of recruitment, training, and lost productivity.
• Employee engagement rate: This measures the percentage of employees engaged and motivated in their work. Engaged employees are more likely to be productive, contribute to a positive workplace culture, and stay with your company for the long term.
• Absenteeism rate: This measures the percentage of scheduled work time employees miss due to unplanned absences. High absenteeism rates can impact productivity and increase the workload on the remaining staff.
• Time to fill: This measures the average time it takes to fill a job vacancy from when it is posted. A shorter time to fill can help ensure that your company has the necessary talent to meet business needs.
• Time to productivity: This measures the time it takes for new employees to reach full productivity levels in their roles. By tracking time to productivity, you can identify areas where onboarding and training processes can be improved to help new hires ramp up more quickly. 

📚 Recommended read: HR KPIs - The 12 Key HR Manager KPI Examples

Organizations spend a lot on marketing campaigns without fully understanding if these campaigns are achieving their desired results. The following marketing KPIs will help you determine whether a campaign is worth it or not. 

• Conversion rate: The percentage of website visitors who complete a desired action, such as filling out a form or making a purchase.
• Cost per acquisition (CPA): The cost of acquiring a new lead. This metric is sometimes confused with customer acquisition cost, which measures the cost of acquiring new customers.
• Customer lifetime value (CLV): The total amount of revenue a customer is expected to generate for your business over the course of your relationship.
• Social media engagement: The level of activity on your company's social media accounts, including likes, comments, shares, and follows.
• Marketing ROI: The amount of revenue generated by your marketing campaign or activity compared to the cost of running that campaign. 

📚 Recommended read: Digital Marketing KPI Examples - 12 Digital Marketing Metrics to Track

How to track KPIs with Cascade? 

Cascade is the ultimate strategy execution platform that empowers businesses to execute their strategies flawlessly. Our powerful tool comes with a range of features, including extensive KPI dashboards, real-time data integration, and analytics capabilities. 

Whether you’re a COO, an operations manager, or a CEO, Cascade provides the tools you need to make data-driven decisions and achieve your goals.

Here’s how you can track KPIs in Cascade:

1. Get your free operational plan template

Sign up for Cascade and access your free operational plan template . The template will help you define your goals, objectives, and KPIs to measure success. 

Here’s a preview of your template:

2. Customize your data

While the Cascade template comes pre-filled with some examples, you have the power to customize your data and metrics to ensure they are relevant to your specific business needs.

3. Integrate Cascade with your data sources

With Cascade, you have two options to track your KPIs: manually and automatically . 

The latter option is far more efficient, as it simplifies data collection and ensures you're working with accurate and up-to-date data. 

By integrating Cascade with your favorite business tools, such as Excel, Google Sheets, or your CRM, you can easily import your KPI data and keep your team in the loop. 

No more worrying about manual data entry or inaccuracies—let Cascade take care of the hard work for you.

4. Bring in your team

Send an invite to your team members to collaborate on shared KPIs and ensure everyone is on the same page. 

With Cascade, you can assign roles and responsibilities, set up notifications, and communicate with your teams in one place.

5. Start tracking your KPIs with dashboards

Cascade's powerful dashboards provide real-time visibility into your KPIs and allow you to quickly identify areas that need attention. 

With customizable widgets and drag-and-drop features, you can easily visualize and analyze performance metrics to improve operational efficiency.

📚 Recommended read: How To Track KPIs To Hit Your Business Goals

Stop struggling with messy spreadsheets and frustrating reporting processes. Instead, ​​streamline your operations with automation and straightforward KPI reports .

Cascade brings simplicity and clarity to the process using KPI dashboards and reports that are intuitive for everyone to use. By having a real-time overview of your key metrics and access to the latest data, you’ll be able to gain critical insights into your operations and adapt quickly to drive continuous improvement.      

To help you get started, we've created a free operational plan template that includes a range of KPI examples tailored to different operational teams. With this template, you'll be well on your way to optimizing your processes and driving long-term success.

Start today for free or book a 1:1 product tour with Cascade’s in-house strategy expert.

Popular articles

Viva Goals Vs. Cascade: Goal Management Vs. Strategy Execution

What Is A Maturity Model? Overview, Examples + Free Assessment

How To Implement The Balanced Scorecard Framework (With Examples)

The Best Management Reporting Software For Strategy Officers (2024 Guide)

Your toolkit for strategy success.

Strategic Metrics: Choosing Ideal KPIs for Business Growth and Success

By Rad Aswani • April 26, 2024

Choosing the right KPIs is vital to monitor and drive your business’s success, but knowing which ones matter can be daunting. In this article, we cut through the complexity, arming you with the knowledge to define, select, and leverage KPIs that will meaningfully impact your business strategy and operational efficiency.

Key takeaways

• KPIs are vital for tracking a company’s performance against its strategic objectives, with strategic KPIs focused on long-term goals and operational KPIs on daily efficiency.
• Financial metrics and customer-focused KPIs, like net profit and customer satisfaction , are critical for a business’s fiscal health and understanding customer engagement.
• Effective KPI management involves selecting relevant metrics, balancing leading and lagging indicators, and continually adapting KPI strategies to align with evolving business goals.

Unlocking the power of key performance indicators (KPIs)

The quest for peak performance in business is ongoing, and key performance indicators (KPIs) are the pillars that support this pursuit. These metrics are not just numbers on a chart; they are the pulse of an organization , offering insights into whether the company’s heart is beating in rhythm with its strategic objectives.

Businesses employ these KPIs to gauge progress, illustrate achievements, and guide the company’s performance towards its central business goals.

Defining key performance indicators

A key performance indicator (KPI) is akin to a lighthouse for a seafaring captain – it provides a focused beam of light on the path to success. Defining key performance indicators allows businesses to solidify their mission, and establish SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) benchmarks, thereby paving a clear path to their goals using kpis key performance indicators.

These KPIs are tailored to reflect the organization’s heartbeat – from the quickened pulse of short-term objectives to the steady throb of long-term ambitions.

The role of KPIs in business strategy

In the world of business strategy, strategic KPIs serve as the stars by which companies navigate, illuminating the path toward overarching organizational objectives. They are the compass points aligning every department’s efforts with the strategic direction of the business, ensuring a cohesive march towards common goals .

Effectively integrating these strategic KPIs allows companies to confidently plot their course, facilitating informed decisions that align with their core business objectives.

Crafting your KPI blueprint: strategic vs. operational indicators

Strategic and operational KPIs form the yin and yang of business metrics, each serving a unique purpose in the grand scheme of corporate success. While strategic KPIs gaze into the future, outlining the long-term vision and milestones, operational KPIs are the workhorses that enhance daily efficiency, ensuring the present is well-managed.

Together, they create a KPI blueprint that aligns an organization’s day-to-day actions with its long-term strategic goals, fostering a dynamic that drives sustainable growth .

Strategic KPIs: driving long-term vision

Strategic KPIs are the guiding constellations in the night sky of business planning, directing the company toward its long-term destination. They encompass broad organizational goals like market share expansion and revenue enhancement, which are paramount to the company’s success.

Focusing on strategic KPIs like return on investment and market share helps businesses secure a competitive position and adapt to evolving market trends .

Operational KPIs: enhancing daily efficiency

In contrast, operational key performance indicators (KPIs) are the instruments that ensure the ship runs smoothly, maximizing daily effectiveness and rapid response. Metrics like order fulfillment time and time to market are pivotal, offering a granular view of the business’s inner workings.

Monitoring these operational KPIs enables organizations to rapidly detect and correct any inefficiencies, ensuring business agility and preparedness for the journey ahead.

Measuring what matters: financial metrics and customer insights

To navigate the financial oceans and understand the currents of customer sentiment, businesses turn to financial metrics and customer insights. These KPIs are akin to the depth sounders and sonar that reveal the contours of the ocean floor, offering clarity on the business’s fiscal stability and customer engagement .

Measuring critical aspects allows companies to not only survive but also prosper in the competitive marketplace.

Financial KPIs: net Profit, cash flow, and gross margin

Financial KPIs such as Net Profit, Cash Flow, and Gross Margin are the navigational beacons that guide a company through the fiscal waters. Net Profit Margin, for instance, offers a clear view of how much profit is generated from each dollar of revenue, serving as a critical measure of efficiency and profitability . Understanding the Gross Profit Margin can also provide valuable insights into a company’s financial health.

Grasping these financial metrics enables businesses to avoid financial pitfalls and plot a trajectory toward financial health and expansion.

Customer-centric KPIs: satisfaction, retention, and lifetime value

Turning the helm towards the customer, we find KPIs that measure satisfaction, customer retention, and lifetime value – the lifeblood of any business. These customer-centric KPIs help in navigating the complex waters of customer relationships , ensuring that businesses not only attract but also retain a loyal customer base.

Metrics like Customer Satisfaction (CSAT) and Customer Lifetime Value (CLV) provide insights into the value and experiences that keep customers returning, time and again, fostering customer loyalty.

Sales and marketing synergy: KPIs that matter

Sales and marketing are the twin engines propelling the business vessel forward, and their synergy is reflected in the KPIs they share. By harnessing the power of sales growth and marketing campaigns, businesses can drive their sales teams to new heights of performance and customer acquisition.

The right blend of sales and marketing KPIs, including marketing qualified leads, can be a potent mix for business growth and market penetration.

Sales KPIs: from lead generation to revenue growth

Sales KPIs track the journey from lead generation to the ultimate goal of revenue growth. Metrics like Quote-to-Close Ratio and Monthly Sales Growth are lighthouses guiding the sales team through the fog of the marketplace, illuminating the path to sales success.

Focusing on these KPIs ensures that a business’s sales strategy is fine-tuned for optimal impact and returns.

Marketing KPIs: campaign success and digital reach

Marketing KPIs, on the other hand, measure the success of campaigns and the breadth of digital reach. Conversion Rate, Return on Marketing Investment (ROMI), and Cost per Acquisition (CPA) are the sextants that help marketers navigate the digital seas, ensuring that every marketing effort contributes to the company’s overarching goals.

These KPIs enable marketing teams to enhance campaign effectiveness and efficiency.

Human resources and employee engagement: key indicators of organizational health

Within the ship’s crew lies the heart of its journey, and human resources and employee engagement KPIs serve as monitors of the crew’s health and morale. From the deckhands to the officers, these KPIs provide insights into employee satisfaction , efficiency, and loyalty.

Tracking these metrics ensures an engaged, motivated team ready to tackle the journey’s challenges and effectively track progress.

Tracking team performance and employee satisfaction

KPIs such as the Employee Satisfaction Index (ESI) and Employee Net Promoter Score (eNPS) are used to gauge the team’s performance and satisfaction. These metrics are like the compass that helps ensure the crew is not only performing their duties but also finding fulfillment and motivation in their roles.

By keeping a finger on the pulse of team dynamics , businesses can create an environment where every member thrives.

Leveraging technology: Kumospace and real-time KPI tracking

Sorry, your browser does not support HTML video.

In today’s digital age, technology like Kumospace is the radar that enhances real-time KPI tracking and team communication. Leveraging these tools enables businesses to maintain a comprehensive view of their performance, informing strategies with the latest data and insights.

This technological edge can be the difference between navigating through a storm successfully or being caught unprepared.

Kumospace: a tool for enhanced KPI communication

Kumospace acts as a virtual bridge where the captain and crew can congregate to discuss and analyze KPIs. Its features, such as floor-wide chat and Nearby Chat , create an environment that fosters clear communication and collaboration .

By providing a platform for real-time interaction, Kumospace ensures that KPI-related tasks are effectively communicated and aligned across teams.

In addition, Kumospace's space analytics feature offers invaluable KPIs into the utilization and effectiveness of virtual spaces, thereby enhancing productivity and fostering accountability among users. By tracking metrics such as attendance rates, interaction patterns , and content engagement within virtual environments , Kumospace enables organizers to optimize the layout and design of their spaces for maximum effectiveness. This data-driven approach not only enhances productivity by ensuring that meetings and events are well-organized and engaging but also promotes accountability by providing organizers with concrete metrics to assess the success of their initiatives. With Kumospace's space analytics, users can create more effective virtual environments that drive collaboration, innovation, and ultimately, success.

Real-time data for informed decisions

The swift currents of real-time data analytics enable businesses to:

• Swiftly adjust their sails in response to emerging trends and customer feedback
• Increase process efficiencies
• Empower companies to manage financial risks proactively.

With platforms like Kumospace , the ability to measure performance and inform strategic decisions becomes significantly enhanced, harnessing the full potential of real-time data and interactions.

Avoiding common pitfalls: best practices for KPI management

Navigating the KPI landscape can be fraught with challenges, but by following best practices for KPI management, businesses can avoid common pitfalls. From selecting the right KPIs to balancing leading and lagging indicators, there are strategic approaches that can maximize the success of KPI initiatives.

In this section, we will explore these best practices, ensuring that your KPIs are not only well-chosen but also effectively managed .

Selecting relevant KPIs

Choosing relevant KPIs that accurately reflect the company’s objectives and strategies is vital. These metrics should be tailored to the business’s specific goals , taking into account factors such as industry and size. Continual assessment and adjustment of these KPIs ensure they remain effective and in sync with current objectives.

Balancing leading and lagging indicators

A balanced KPI strategy incorporates both leading and lagging indicators, offering a holistic view of performance. Leading KPIs predict future outcomes while lagging KPIs provide insights into past performance. Together, they create a comprehensive performance assessment that captures historical outcomes and anticipates future trajectories.

Iterating and refining KPI strategies

KPI strategies are not set in stone; they require regular review and adaptation to stay relevant. As business objectives and market conditions evolve, so too must the KPIs. This flexibility ensures that the metrics continue to serve as accurate benchmarks for performance and strategic decision-making .

Building effective KPI dashboards

Wielding a KPI dashboard is akin to having a captain’s logbook, one that’s equipped with the latest in navigational technology. These dashboards are crucial for captains and their crews to have a visual tracking of enterprise performance, offering a clear format to communicate complex data.

An effective KPI dashboard is more than just a collection of numbers; it’s a consolidated view of success metrics that allows for quick identification of trends and aids in informed decision-making .

Designing dashboards for clarity and impact

Following key design principles is crucial for creating a KPI dashboard that truly resonates. Affordance, color accessibility, and simplicity play vital roles, ensuring that the dashboard is not only aesthetically pleasing but also functionally intuitive.

A well-designed dashboard tells a story with its data, guiding the reader through a narrative constructed through strategic placement of KPIs and employing data visualization techniques like graphs and charts to emphasize key points.

Integrating KPI dashboards into daily operations

Once the KPI dashboard is meticulously crafted, the next step is to integrate it into the daily operations of the ship, ensuring that all crew members can navigate with its assistance. This integration involves engaging potential end-users for feedback, providing the necessary training to interpret the dashboard correctly, and ensuring its accessibility.

This fosters a culture of data-driven decision-making, empowering every team member to monitor performance and contribute to the organization’s strategic journey.

As we dock at the end of our voyage through the realm of KPIs, we are reminded of their pivotal role in charting a course to business success. From the strategic heights of long-term objectives to the operational depths of day-to-day efficiency, KPIs offer a compass by which to steer the enterprise. By harnessing the right KPIs, leveraging technology like Kumospace , and adhering to best practices in KPI management, businesses are well-equipped to sail toward their desired horizon with confidence and clarity.

Frequently asked questions

What is the difference between strategic and operational kpis  .

The difference between strategic and operational KPIs is that strategic KPIs focus on long-term business goals, shaping the company's future direction, while operational KPIs concentrate on the efficiency and effectiveness of day-to-day business processes.

How often should KPIs be reviewed and adjusted?  

KPIs should be regularly reviewed and adjusted to ensure they align with evolving business objectives and remain effective in measuring performance.

Can KPIs be used in all departments of a business?  

Yes, KPIs can be customized to align with the goals and requirements of various departments within a business, including sales, marketing, human resources, and finance.

What role does real-time data play in KPI tracking?  

Real-time data plays a crucial role in KPI tracking by enabling businesses to make informed decisions quickly, adjust strategies in response to market changes, and proactively manage risks. This ensures better performance and flexibility in adapting to dynamic business environments.

How does Kumospace enhance KPI tracking?  

Kumospace enhances KPI tracking by providing a collaborative virtual office environment that supports continuous team engagement, clear communication, and real-time monitoring of KPIs. This fosters a more efficient and effective tracking process for organizations.

Transform the way your team works from anywhere.

A virtual office in Kumospace lets teams thrive together by doing their best work no matter where they are geographically.

Rad has over 7 years of experience in Marketing. Currently, she is the fun Digital Marketer at Kumospace. She leads initiatives such as influencer marketing, SEO management, and social media to name a few. Outside of work, Rad enjoys traveling, working out, and spending time with her family and friends.

Suggested posts

Posted by Yang Mou on August 16, 2023 Yang Mou • August 16, 2023

Kumospace Acquires Kosy Office

Posted by Rad Aswani on June 6, 2023 Rad Aswani • June 6, 2023

Wave Goodbye to Wonder, and say hello to Kumospace: a seamless transition for your virtual event needs

Fun & Events

Posted by Drew Moffitt, Sophia Kercher on February 13, 2023 Drew Moffitt, Sophia Kercher • February 13, 2023

15 Fun Virtual Games to Play with Groups Online

Posted by Kyla Mintz on April 28, 2024 Kyla Mintz • April 28, 2024

Boost Employee Performance with Workplace Wellness Programs in 2024

Transform the way your team works..

How to Build a Strategy in 6 Steps

Like what you’re reading, download the complete guide to strategic planning today..

GET THE SAMPLE GUIDE

Phase 3: How to Build a Strategy in 6 Steps

Previously, you addressed where you are and where you are going. Now, you will focus on how you will get there. Use your SWOT to stay grounded and realistic as you build a roadmap from where you are today to where you want to be.  As you develop your strategy and set your goals, make strategic choices about what to do and not to do. Remember that being strategic is about making those hard choices. A mark of a good strategic plan is one that is clear and focused (not too many goals and objectives ), as well as balanced – telling a strategy story about how your whole organization is linked and aligned to drive key performance indicators. Spend some time uncovering your competitive advantages based on an understanding of your strategic position. Your competitive advantages are the essence of your strategic plan because strategy is about being different. It is deliberately choosing to perform activities differently or to perform different activities than competitors to deliver value to your customers. Eliminate any confusion around semantics by using these definitions:

• Strategies:  The route you intend to take and the general methods you intend to use to reach the top of that specific mountain.
• Long-Term Strategic Objectives/Priorities:  Intermediate objectives to the top of the mountain. If you have a 5-year vision, these would be 3- to 4-year intermediate objectives on the way up the mountain.
• Short-Term Goals and Actions:  Specific moves for climbing the sections of rock and ice that confront you right now. These would be analogous to detailed annual plans for getting things done this year on the way to the 3-year objective.

Phase Duration

Question to ask.

• What is our base for competing and delivering value?
• What are we best at? What makes us unique?
• What are the “big rocks” – strategic objectives – we need to reach our vision?
• What must we accomplish over the next 1 to 3 years to achieve these?
• What are we not going to do?
• What strategic questions must we still address?
• How will we measure our success?

Data Needed

• SWOT, competitive advantages list, customer data
• Carry over goals from last planning period
• End of year scorecards/KPI data

Outcomes / Deliverables

• Drafted competitive advantages
• Organization-wide strategies
• Long-term strategic objectives
• Short- and mid-term organization-wide goals
• Financial projections

Action Grid

*To access the worksheets under “Tools & Techniques” please refer to our Strategic Planning Kit for Dummies .

OnStrategy is the leader in strategic planning and performance management. Our cloud-based software and hands-on services closes the gap between strategy and execution. Learn more about OnStrategy here .

Use Your SWOT to Set Priorities

• Build on your strengths
• Shore up your weaknesses
• Capitalize on your opportunities
• Manage your threats

If your team wants to take the next step in the SWOT analysis, apply the TOWS Strategic Alternatives Matrix to help you think about the options that you could pursue. To do this, match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:

TOWS Strategic Alternatives Matrix

Evaluate the options you’ve generated, and identify the ones that give the greatest benefit, and that best achieve the mission and vision of your organization. Add these to the other strategic options that you’re considering.

Define Long-Term Strategic Objectives

Long-Term Strategic Objectives– Using the information gathered in your SWOT, for each of the following areas develop at least one objective, but no more than five to seven.

• The  “Financial”  perspective indicates whether the company’s strategy, implementation, and execution are contributing to top and bottom line improvement include the following: Cash flow, Sales growth, Market share, and ROE.
• The  “Customer”  perspective is focused primarily on creating value and differentiation when acquiring, retaining or servicing the customer. This driver deals primarily with gaining and growing customers and market share.
• Focusing on  “Internal Processes”  in operations has the greatest impact on customer satisfaction. Positive long-term results rely on defining the competencies needed to maintain market leadership and maximizing the effectiveness of those internal systems.
• The  “People/Learning”  perspective relies on an organization’s commitment to its greatest resource—people. This area focuses on creating value by developing an environment that fosters learning, innovation, and prioritizing on its “human asset.” The premise is that people drive the other three elements to achieve the organization’s goals.

Keep in mind that the strategic objectives establish should connect your mission to your vision. These objectives are long-term (think 3-5 years), continuous strategic areas that get you moving from your mission to achieving your vision. Ask yourself what the key activities are that you need to perform in order to achieve your vision. We encourage you to create strategic objectives in four key areas – Financial/Mission, Customer, Internal/Operational, and People/Learning. *The Balanced Scorecard was introduced by Robert Kaplan, a Harvard Business School professor, and David Norton, the founder and president of Balanced Scorecard Collaborative, Inc., in the early 1990s as a new way to work with business strategy. Today, over half of the Fortune 1000 companies in North America are using the Balanced Scorecard, which has become the hallmark of a well-run organization.

Financial Strategic Objectives:

• To establish a financially stable and profitable company.
• Shift revenue mix majority of product sales to service sales.
• Profitability: Maintain margins at XX%.

Customer Strategic Objectives:

• Introduce current products to two new markets.
• Increase loyalty, customer satisfaction, referral volume.

Internal Processes Strategic Objectives:

• To achieve order fulfillment excellence through on-line process improvement.
• Improve or institute a sales process, increase close rate, increase lead generation.
• Improve brand management through consistent use of…

People & Learning:

• To provide employee with challenging and rewarding work.
• HR Mgmt: Hire and onboarding processes.
• Knowledge Mgmt: Structured training (sales, IT, management, ownership).

Setting Organization-Wide Goals and Measures

Org-Wide Goals and Measures — Once you have formulated your strategic objectives, you should translate them into goals and measures that can be clearly communicated to your planning team (team leaders and/or team members). You want to set goals that convert the strategic objectives into specific performance targets. Effective goals clearly state what, when, how, and who, and they are specifically measurable. They should address what you need to do in the short-term (think 1-3 years) to achieve your strategic objectives. For maximum effectiveness, goals must state how much of what kind of performance and by when it is to be accomplished. This is where it pays off to think SMART when creating goals . Remember this simple acronym to guarantee your goals are:

• Specific:  Goals need to be specific. Try to answer the questions of How much and What kind with each goal you write.
• Measurable:  Goals must be stated in quantifiable terms, or they are only good intentions. Measurable goals facilitate management planning, implementation, and control. For example, a measure might be “# of new customers” or “% complete” and a target might be “500” or “100%”, respectively.
• Attainable:  While goals must provide a stretch that inspires people to aim higher, they must also be achievable, or they are a set-up for failure. Set goals you know you, your organization, and your employees can realistically reach.
• Responsible person:  Goals must be assigned to a person or a department. But just because a person is assigned a goal doesn’t mean that she is solely responsible for its achievement; they just need to be the point person who will ensure the goal is achieved.
• Time specific:  With reference to time, your goals must include a timeline of when they should be accomplished.

Financial 1-Year Goals:

• Increase our billable hours by 10% over the next 12 months. (Measure: # billable hours / Target: 1.2%)
• Achieve sales growth of 10% per year. (Measure: Monthly sales / Target: 1.2%)

Customer 1-Year Goals:

• Realize 10% of the company’s annual sales from the small business market by end of the next year. (Measure: # of small business clients / Target: 100)
• Reach a 15% annual increase in new customers by end of year 2012. (Measure: % increase in new customers / Target: 15%)

Internal Processes 1-Year Goals:

• Reduce the time lapse between order data and delivery from 6 days to 4 days by this June. (Measure: # of days to process each order / Target: 4 days)
• Reduce the number of returns due to shipping errors from 3% to 2%. (Measure: # of returns due to shipping errors / Target: 2%)

People & Learning 1-Year Goals:

• Reduce turnover among sales managers by 10% by the end of the year. (Measure: Employee turnover / Target: 10%)
• Hire and train a human relations director by the end of the year. (Measure: Director hired / Target: 100%)

Select KPIs

To help monitor your strategic plan, one of the best tools around is the Balanced Scorecard, developed by Kaplan and Norton from Harvard . The scorecard is to be used as both a measurement and management tool to assist in fulfilling your organization’s vision. With it, you can actively track progress toward your goals. Begin by asking “What are the key performance measures we need to track in order to monitor if we are achieving our goals?” These KPIs include the key goals that you want to measure that will have the most impact in moving your organization forward. The scorecard has four categories of measures:

• Financial/Mission — How do we look to our stakeholders? These measures indicate whether your organization’s strategy, implementation, and execution are contributing to bottom line and top line improvement.
• Customer/Constituent — How do we provide value? These measures are customized to each of the targeted groups you serve.
• Internal/Operational — Which processes must we excel at? These measures focus on internal programs and activities that have an impact on customer/constituent satisfaction. They focus on internal processes needed to sustain your competitive advantage.
• People/Learning — To excel at our processes, how must we learn and improve? These measures identify the infrastructure that your organization must build to create long-term growth and improvement. It includes your ability to attract essential staff, innovate, improve and learn.

An Example Strategy Scorecard:

Steps to Build Your Strategy Scorecard:

• Identify the right measures. Most of your goals should have measures associated with each one. If not, pick a measure to track the goal.
• Establish increments that mesh with the targets. Make sure to get the right time frame and size of measures. For example, if you’re target is a 10% increase in sales over the year, break the target down to a monthly number. Try to use the same increments for all your measures. If you are reporting monthly, then use monthly measures.
• Identify the data source. Clearly identify where the monthly number is coming from and who is responsible for reporting on it. Be sure that the measures are easily accessible.
• Input numbers monthly. Enter numbers every month for each measure.
• See the big picture. The primary purpose of key indicators is to give you a big-picture look at the organization with a relatively small amount of information. If you are not seeing the big picture, change the measures. A great way to get a visual is to produce a chart or graph for each measure.
• Take action. Taking action means doing it in a timely manner. The whole point of using a scorecard is to make adjustments, now, on time, before it’s too late. Your strategy meetings should easily facilitate this process.

A List of Common Measures:

Cascade Your Strategies to Operations

By the time organizations get to cascading their strategy, many are tired and worn out from all of the work leading up to this point. But don’t stop yet! Cascading action items and to-dos for each short-term goal is where the rubber meets the road – literally. Moving from big ideas to action happens when strategy is translated from the organizational level to the individual.

Here we widen the circle of the people who are involved in the planning as functional area managers and individual contributors develop their short-term goals and actions to support the organizational direction. But before you take that action, determine if you are going to develop a set of plans that cascade directly from the strategic plan, or instead if you have existing operational, business or account plans that should be synced up with organizational goals. A pitfall is to develop multiple sets of goals and actions for directors and staff to manage. Fundamentally, at this point you have moved from planning the strategy to planning the operations; from strategic planning to annual planning. That said, the only way strategy gets executed is to align resources and actions from the bottom to the top to drive your vision.

PHASE DURATION

Questions to ask.

• How are we going to get there at a functional level?
• Who must do what by when to accomplish and drive the organizational goals?
• What strategic questions still remain and need to be solved?
• Coming year organizational goals, measures and targets
• Sales projections
• Product projections
• Department/functional goals, actions, measures and targets for the next 12-24 months
• Individual team member action plans

Cascading Goals to Departments and Team Members

Now in your Departments / Teams, you need to create goals to support the organization-wide goals. These goals should still be SMART and are generally (short-term) something to be done in the next 12-18 months.

Pull together your action plan for each short-term goal.

Finally, you should develop an action plan for each goal. Keep the acronym SMART in mind again when setting action items, and make sure they include start and end dates and have someone assigned their responsibility. Since these action items support your previously established goals, it may be helpful to consider action items your immediate plans on the way to achieving your (short-term) goals. In other words, identify all the actions that need to occur in the next 90 days and continue this same process every 90 days until the goal is achieved. In the OnStrategy system, all the strategic objectives cascade down to the team member action items. For example in the image below (3-tier plan), strategic objective 1 cascades down to organization-wide goal 1.1, then department goal 1.1.1, then team member goal 1.1.1.1, which is supported finally by the team member action item 1.1.1.1.1. In a 2-tier plan, the department goal would be the team member goal and the team member goal an action.

Examples of Cascading Goals:

Join 60,000 other leaders engaged in transforming their organizations., subscribe to get the latest agile strategy best practices, free guides, case studies, and videos in your inbox every week..

Leading strategy? Join our FREE community.

Become a member of the chief strategy officer collaborative..

Free monthly sessions and exclusive content.

Do you want to 2x your impact.

More From Forbes

Kpis: what are they, and why are they important.

• Share to Facebook
• Share to Twitter
• Share to Linkedin

KPIs are the key performance indicators of a business. They are monitored regularly to ensure that your business performance targets are achieved and maintained.

KPIs can involve strategic measures, operational measures, employee performance, financial ratios, to name a few. When you want to quantify the data in your company, measure it with a KPI. They are used to compare results, evaluate business performance, and track changes to improve your business outcomes.

Businesswoman giving a presentation in the boardroom

KPIs are important because they help align the business to achieve strategic goals such as profit, growth, performance, sales levels. Numbers don’t lie, and if you can quantify your key measurements, they provide objective feedback on business performance.

Monitor the KPIs, and if there is an area in your business that is not performing well or having trouble, it is through observing the KPI that you can identify weak spots. When you can monitor your KPIs on a dashboard that offers a visual, it can help with interpreting data.

Mainly due to data analytics , there is an overload of data available. To make data helpful, KPIs help you organize and use the data and offer meaningful feedback on the business area that you want to measure.

Best Travel Insurance Companies

Best covid-19 travel insurance plans.

You don’t need to monitor every KPI, and the KPIs that you choose to watch will change over time. Your important KPIs are going to align with the goals of your business. When you use the KPIs that help you monitor your goals, it will help measure business performance.

Business strategy solution jigsaw puzzle

The types of KPIs that are important to monitor in your business include:

1.    financial kpis.

A financial KPI measures the value of a business's financial results and performance. Every company should be monitoring financial KPIs such as profit margins. Profit is an essential part of business and businesses need profit to grow and scale.

2.    Sales KPIs

Just as essential as profit, companies need sales to survive in business. Sales metrics should be monitored, from sales quotas to new lead generation. Average cost per lead, number of onboarding calls, customer acquisition costs are a few of popular sales KPIs to monitor.

3.    Marketing KPIs

Marketing analytics allows you to track and report your valuable marketing KPIs for individual marketing campaigns. Social media conversion rates, landing page conversions, advertising, marketing distribution, customer lifetime value are all useful KPIs to consider tracking within your business. Marketing KPIs must be monitored to see what marketing efforts resonate with your audience and what doesn’t. Receiving that feedback allows for swift changes to achieve results.

Two startup business colleagues problem-solving at a computer together in the office.

4.    Operational KPIs

Used to measure the operational efficiency of the business, these KPIs help business owners monitor how effective the daily operations of a company are. When you watch your operating expenses, you can plug money leaks quickly, so they don’t become a significant drain on your profitability.

5.    Product KPIs

Knowing the damage, waste, and return rates when you are a product-based business is vital information. Product-based companies typically have smaller profit margins, and it is imperative to monitor product KPIs and use that feedback to increase profitability.

The bottom line is that you can use the KPIs that monitor your business-specific goals. When you start using KPIs to watch for trends, you will see your goals reached at a much quicker pace. Using dashboards that monitor your most important KPIs allows you to maintain competitiveness in your industry. If you are not using KPI tracking systems in your business, you may be leaving opportunities and money on the table.

Melissa Houston, CPA is the founder of The Fractional CFO Agency  where she helps successful business owners increase their profit margins so that they keep more money in their pocket and increase their net worth.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever. 

• Editorial Standards
• Reprints & Permissions

• Business Essentials
• Leadership & Management
• Credential of Leadership, Impact, and Management in Business (CLIMB)
• Entrepreneurship & Innovation
• Digital Transformation
• Finance & Accounting
• Business in Society
• For Organizations
• Support Portal
• Media Coverage
• Founding Donors
• Leadership Team

• Harvard Business School →
• HBS Online →
• Business Insights →

Business Insights

Harvard Business School Online's Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.

• Career Development
• Communication
• Decision-Making
• Earning Your MBA
• Negotiation
• News & Events
• Productivity
• Staff Spotlight
• Student Profiles
• Work-Life Balance
• AI Essentials for Business
• Alternative Investments
• Business Analytics
• Business Strategy
• Business and Climate Change
• Design Thinking and Innovation
• Digital Marketing Strategy
• Disruptive Strategy
• Economics for Managers
• Entrepreneurship Essentials
• Financial Accounting
• Global Business
• Launching Tech Ventures
• Leadership Principles
• Leadership, Ethics, and Corporate Accountability
• Leading with Finance
• Management Essentials
• Negotiation Mastery
• Organizational Leadership
• Power and Influence for Positive Impact
• Strategy Execution
• Sustainable Business Strategy
• Sustainable Investing
• Winning with Digital Platforms

7 Marketing KPIs You Should Know & How to Measure Them

• 01 Feb 2024

Being a digital marketer involves rapid decision-making. With constantly evolving online platforms and channels, you must ensure you’re up to date on market trends and consumer behaviors.

Analyzing your efforts and prioritizing the right data requires focusing on key performance indicators (KPIs) —quantifiable measures for evaluating whether you meet your marketing objectives.

Here’s a breakdown of why identifying KPIs is vital to your digital marketing plan, along with common metrics you can use and how to measure them.

Free E-Book: Your Guide to Online Learning Success

Access your free e-book today.

DOWNLOAD NOW

Why Are KPIs Important to Your Marketing Plan?

KPIs are crucial to your digital marketing plan because they reflect your strategy’s effectiveness. By setting clear, quantifiable KPIs, you can evaluate progress toward specific marketing objectives.

Despite their importance, only 23 percent of marketers are confident that they track the right KPIs.

“It isn’t enough to measure the final outcome alone,” says Harvard Business School Professor Sunil Gupta, who teaches the online course Digital Marketing Strategy . “You also need to track intermediate metrics to understand where consumers might be getting stuck—essentially bottlenecks in the marketing funnel.”

The term “marketing funnel” refers to the three customer journey stages:

• Awareness: Introducing potential customers to your brand or product to address a problem they may have
• Consideration: Making customers aware of your brand or product while they evaluate it against alternatives
• Decision: Influencing consumers’ purchasing decisions using the information you gather during the previous stages

KPIs are pivotal to evaluating your success at each stage.

During the awareness stage, marketing KPIs—such as website traffic and impressions—help you understand how to attract potential customers.

For the consideration stage, metrics such as time spent on your website, pages viewed per visit, and social media interactions become more relevant and reflect how well you connect with your target audience .

In the decision stage, your main focus should be KPIs like conversion rate and sales revenue. Those reveal how well your marketing strategy drives tangible results, such as sales or leads.

By continuously monitoring and analyzing KPIs, you can make data-driven decisions , optimize your strategy, and achieve more successful outcomes.

Here are seven KPIs for measuring your digital marketing plan’s success.

7 Marketing KPIs to Help You Measure Success

1. impressions.

Impressions are the number of times your ad or organic content is displayed or viewed—regardless of whether it garners clicks. While this KPI doesn’t reflect how many customers engage with your content, it helps boost brand awareness.

It’s often used interchangeably with “reach,” but it’s crucial to understand the difference between the two . Impressions track the number of times users see your content—and include multiple views by the same individuals—while reach only considers the number of users who see your content.

To measure your brand’s impressions, you can use Google Ads or social media platforms’ analytics tools to track and report how frequently your content appears to users. By analyzing impressions data, you can gauge your targeting strategy’s effectiveness in the awareness stage and adjust it accordingly to maximize exposure.

2. Search Engine Rankings

Most customers will likely discover and decide to purchase from your company online. There are over 2.6 billion online buyers worldwide—more than 33 percent of the world’s total population.

To ensure you reach a large online audience, your website needs to appear at the top of search engine results pages (SERPs) . Its rankings directly influence your brand’s visibility and accessibility to potential customers in the awareness stage.

Tools like Google Analytics and specialized search engine optimization (SEO) tools provide valuable data when measuring search engine rankings, including:

• Number of ranking targeted keywords
• Volume of organic traffic
• Number of backlinks

Monitoring those metrics can help you understand your SEO strategy’s performance and any necessary adjustments, such as improving website loading speed or creating more relevant content for your target audience.

3. Click-Through Rate

Click-through rate (CTR) is a critical KPI for assessing online advertising campaigns and search engine results. You calculate it by dividing the number of clicks your ad or link receives by its impressions and then multiplying that number by 100 to get a percentage.

To measure and analyze CTR, you can use digital marketing tools like Google Analytics to gain detailed insights into ad, keyword, and content performance. No matter the marketing asset, each CTR can impart how well you communicate with customers.

The average CTR is approximately 6.6 percent for search and 0.6 percent for display, but every company has its own baseline. For example, a high CTR often means your content is relevant and appeals to your target audience.

The best way to determine your goal CTR is by analyzing industry benchmarks, historical data, campaign objectives, and your target audience’s specific patterns and preferred advertising platforms.

4. Cost per Click

Marketing KPIs aren’t just about measuring engagement with potential customers; they can also indicate changes you should make to your digital marketing budget.

For example, cost per click (CPC) is a KPI that considers the amount you pay each time a user clicks on your paid advertisement. You calculate CPC by dividing the total cost of your ad by its number of completed clicks. For instance, if you spend $100 on your ad and it receives 50 clicks, the CPC would be $2.

This KPI helps you assess online advertising efforts’ financial efficiency during consideration. A lower CPC indicates a more cost-effective campaign, allowing for more clicks within your budget.

You can track and measure CPC using tools like Google Ads that provide real-time advertising performance data.

5. Conversion Rate

One of the most important consideration-stage marketing KPIs is conversion rate —the percentage of visitors to your website or digital platform who take a desired action, such as making a purchase, signing up for your newsletter, or filling out a contact form.

You calculate it by dividing the number of conversions by the total number of visitors and then multiplying that by 100. For example, if your website receives 1,000 visitors and 50 of them complete a purchase, the conversion rate is five percent.

You can measure conversion rate using digital tools like Google Analytics that track user interactions and behavior—including how and what they convert on.

Understanding conversion rate is essential to assessing your marketing campaigns because it focuses on customers’ actions. A higher conversion rate indicates more successful engagement with your target audience. If your website has a low conversion rate, you might need to find new ways to entice customers to act.

6. Customer Acquisition Cost (CAC)

You’ve probably heard the phrase, “It costs more to acquire a new customer than retain an existing one.” While acquiring new business is marketing’s main objective, it comes at a cost that you must measure and monitor.

Customer acquisition cost (CAC) is a marketing KPI that calculates the total expense incurred to acquire a new customer. You calculate it by dividing the sum of all marketing and sales expenses over a specific period by the number of new customers acquired during it.

One example is tracking marketing and sales expenditures through accounting software and analyzing customer acquisition data via customer relationship management systems like HubSpot and Salesforce .

Monitoring CAC helps you make data-driven decisions to optimize marketing efforts and allocate budget to ensure you spend money on the right customers.

For example, if your company aims to attract a new, sustainability-driven target audience, that might prove too expensive if ad copy about business sustainability has a low conversion rate.

7. Return on Investment

Return on investment (ROI) is a KPI that can provide crucial insight into marketing initiatives’ anticipated and actual results.

Check out the video below to learn more about ROI, and subscribe to our YouTube channel for more explainer content!

ROI specifically analyzes the customer journey’s decision stage. While other cost-oriented metrics focus on earlier stages, ROI compiles profit-related information into a single metric that helps communicate overall performance.

You calculate ROI by subtracting your marketing efforts’ cost from their generated revenue. You then divide that number by the cost of your marketing efforts. For example, if your digital marketing campaign costs $1,000 and generates $3,000 in revenue, the ROI would be 200 percent.

Related: How to Calculate ROI to Justify a Project

Google Analytics and marketing automation software are common tools for tracking campaign revenues and costs. It’s crucial to note that if you don’t monitor KPIs early in the marketing funnel, it can be hard to determine if your efforts contributed to your campaign’s success or failure.

By analyzing marketing initiatives’ ROI, you can identify your most profitable tactics, allocate resources more effectively, and make decisions that maximize your budget .

Measure Your Marketing Success

Measuring your marketing efforts shouldn’t be overwhelming. With the right tools and metrics, you can determine which aspects of your digital marketing strategy work or need revising.

One of the most effective ways to identify metrics for each customer journey stage is by enrolling in an online marketing course, such as Digital Marketing Strategy . Through real-world case studies, you can learn which KPIs are best for monitoring your marketing objectives.

Do you want to learn more about digital marketing KPIs? Explore Digital Marketing Strategy to discover how to measure campaigns’ success. If you’re interested in exploring online education but aren’t sure where to start, download our free guide to online learning success .

About the Author

Filter by Keywords

Software Teams

25 software development kpis with examples.

Engineering Team

April 25, 2024

Setting up goals is inevitably followed by tracking how they are realized. This is one of every project manager’s core responsibilities, and software development managers are no different. 

Project managers use specific KPIs to manage software development projects efficiently. Development velocity, cycle time, and lead time are all examples of KPIs that can be used to track software projects.

These KPIs for software development are your toolkit of objective data to track every step in the software development lifecycle to identify bottlenecks and work towards continuous improvement.

Let’s see how software development teams can optimize the development process with the help of the top 25 software development KPIs (key performance indicators) to drive decision-making.

1. Development Velocity 

2. cycle time, 3. code coverage , 4. deployment frequency, 5. net promoter score, 6. mean time between failures (mtbf), 7. change failure rate, 8. pull request (pr) size, 9. defect detection ratio (ddr), 10. code churn, 11. code simplicity, 12. cumulative flow , 13. bug rates, 14. sprint burndown, 15. release burndown, 16. flow efficiency, 17. mean time to repair (mttr), 18. queue time , 19. scope completion rate , 20. scope added, 21. lead time, 22. wasted effort, 23. interruptions , 24. hiring and ramp time , 25. predicted ship date , choosing the right kpis, regularly adjusting and tracking kpis , lack of alignment within teams , quality and accuracy of data , clickup kpi templates , impact of quality assurance on software development kpis, measure software development kpis to maximize your chances of project fulfillment.

25 Software Development KPIs

Innumerable KPIs exist tailored to specific business objectives and ongoing projects. Here are the top 25 that cut across the board to keep your developer team ahead of targets. 

Measure the software development team’s performance with development velocity. It indicates the total work your team can accomplish during a sprint (a fixed period during which tasks are to be completed).

Within a sprint, use story points to calculate the effort required to complete a task on a scale of one to ten, with one being the quickest and ten the most complicated. By measuring each sprint and story point, you can understand your development team’s average velocity within three sprints. 

Without this metric, it will be difficult to plan, prioritize, allocate resources, and set realistic expectations for future projects. 

Development velocity = Total story points completed in a sprint

Cycle time is a DevOps Research and Assessment (DORA) metric to measure the time spent accomplishing a particular task. It quantifies the team’s performance and estimates the time required to finish future tasks.  

For example, in software development, cycle time can refer to the time it takes to resolve a bug, from when it is assigned to a developer and undergoes code stability and code testing until it is fixed and approved by quality assurance. 

This metric helps assess the developer team’s productivity and identifies areas for improvement. You can compare the cycle time of each task with the desired duration to analyze where the team is lacking. 

Cycle Time = End time – Start time

Code coverage, also called test coverage, measures the percentage of tested code. This DevOps metric measures software quality for production and testing purposes. 

It prioritizes test-driven development (TDD) and identifies bugs in codes. The higher the code coverage, the fewer the chances of bugs. 

Code coverage = (Number of lines of code executed by tests / Total number of lines of code) X100

Implementing agile methodologies can make measuring the company’s performance harder as the entire team must track agile metrics throughout the development cycle. When tracking the performance of software development tools and processes under such a process, you can depend on the deployment frequency KPI. 

It determines the speed at which the deployment team deploys code into different departments, such as staging, testing, and production. This KPI is among the four DORA metrics and is interlinked with others, such as change failure rate, lead time for changes, and mean time to recovery. 

This software KPI provides insight into the development team’s efficiency and agility, sets benchmarks for improving deployment practices, and helps with continuous improvement. 

Deployment frequency = Total number of deployments / Time period

The Net Promoter Score (NPS) measures customer satisfaction on a scale of zero to ten, where zero describes the worst user experience, and ten is the best. 

People who rank the software between zero and six are termed detractors, seven and eight are passive, and those who rank it nine or ten are promoters. If your number of promoters exceeds detractors, then the software performs well. 

Net Promoter Score = (% promoters) – (% detractors)

When trying to gauge software reliability, the MTBF metric quantifies the average time between two software failures. 

In software development, where failures are inevitable, the MTBF metric is critical for assessing software tasks and developing repair strategies. 

Mean Time Between Failures (MTBF) = Total uptime/Total number of breakdowns 

Measuring software quality is complex due to its subjectivity. The Change Failure Rate metric gives an insight into the software quality by calculating the percentage of deployments that lead to a failure in production. 

A low change failure rate indicates fewer bugs and high quality. On the contrary, a high rate signifies more bugs and a need for the team to revamp the code. 

CFR = (Number of failed changes/Number of changes)/100

Pull request size is a software development metric that measures the number of code changes in a single pull request, reflecting the size or scope of changes a developer introduces. 

Small pull requests are easier to review and process, facilitating faster integration, providing more specific feedback, and reducing the risk of bugs. In contrast, large pull requests take longer to understand, review, and fix.  

The DDR ratio measures the number of defects found before release compared to those found after release. 

Use the DDR metric to assess the number of defects missed by your testing team and encountered by customers, which negatively impact their experience. 

Defect Detection Ratio = (Defects found in a phase + Total defects) X 100

Codes frequently need revision with software upgrades and the introduction of new features. The code churn metric measures the number of times a software code requires iteration during a specific period. A higher code churn indicates higher maintenance and risk. 

For example, DevOp teams usually function at an average 25% code churn rate, which indicates that the codes are 75% efficient. 

Code churn rate = Total lines of code in the beginning – (Lines added + lines deleted + lines modified)/ Total lines of code X 100

A simple code executed successfully is superior to a complex code that demands constant iterations. The code simplicity can be measured using several metrics such as cyclomatic complexity, code duplication, code churn, etc. 

Good code simplicity indicates that the code would consume less time, require fewer iterations, and have fewer bugs. 

There is no direct formula to measure code simplicity like cyclomatic complexity, as it is a qualitative rather than quantitative metric. 

Software development managers often want to know the stage of software development projects. The cumulative flow demonstrates, via visual diagrams, whether a task is approved, in progress, or in the backlog stage. 

Different colors portray different statuses. Additionally, the width of the band tells you the cycle time. This software development KPI lets you gauge the software development status, identify bottlenecks, and calculate the effort needed to complete backlog items.

Also Read: What a software developer’s day is like

The bug rate demarcates the number of bugs identified during software testing. Most software development teams use this metric to compare bug rates across projects, teams, and timeframes, establish benchmarks, and set realistic goals to reduce bugs. 

You can look at them from two angles: the total number of bugs detected and the severity of the bugs identified. 

Bug Rate = (Number of bugs detected/ Total number of lines of code) X 100 

Measure the total number of tasks executed within a sprint with the sprint burndown metric. It is among the key software engineering KPIs that determine work done during sprints. Re-adjust the team’s performance if the results do not match the expectations. 

Companies often use sprint burndown charts and measure the time and amount of work to complete in story points to check for deviations from the ideal progress. 

The release burndown KPI metric measures the progress of the product release and predicts how many sprints it will take to complete a version based on previous sprints. 

Use a release burndown chart to gauge whether the operations are running on time or behind schedule and demonstrate the project’s progress to the stakeholders. 

The flow efficiency key performance indicator metric tracks the total and active time ratio to give an insight into the standstill period and optimize the workflow. 

Flow Efficiency = (Value-adding time / Lead time) X 100

Value-adding time = Time spent on activities directly contributing to the customer’s needs, like source code/testing. 

Total lead time = Time from when a work item enters the Kanban system until it is delivered to the customer. 

The mean time to repair refers to the total time a system takes to repair an issue or failure. It includes the repair and testing time to incorporate all the time taken until the software is fully functional. 

A high MTTR in software development projects can lead to unplanned downtime. 

The MTTR evaluates the reliability and availability of your systems and equipment and identifies areas of improvement and trends in failures so that your software developers can optimize the maintenance strategies. 

MTTR = Total maintenance time / Number of repairs

Queue time is the processing time from when a ticket is issued to when it is resolved. It refers to the period when the ticket is still in the queue and unaddressed or unresolved. 

Long queue times can be caused by a lack of QA specialists, poor internal communication, or insufficient tools and support. This KPI showcases how optimized the pipeline is; hence, the lower it is, the better. 

The faster the ticket completion process, the more positively it reflects on the software development team’s efficiency. The scope completion rate is a metric that determines the total number of tickets completed within a sprint. 

A low scope completion rate hints at unoptimized processes, unrealistic targets, or too few staff members. 

Scope added is a critical metric for all software development managers as it accounts for the total number of story points added after the sprint commencement. 

A high scope-added percentage indicates a lack of planning to determine the challenges ahead. It disrupts the sprint planning by reducing the possibility of performing new work. 

To lower the scope added, eliminate features that require more time than your team can dedicate. You can also build a maintenance forecast stating the time and effort required to keep the function running in the long run. 

Lead time measures a task’s total time from request to completion. Unlike the cycle time for software development teams, it also considers the waiting time, approvals, and reviews required before the task is completed. 

A lower lead time indicates a faster time to market, increased agility, and efficient resource utilization. Together, these factors contribute to higher customer satisfaction. 

Lead Time = Deployment timestamp – Commit timestamp

The wasted effort metric measures the time and resources spent on tasks that do not contribute to the final project or the business objectives. 

For example, if the team worked on a software feature that was considered irrelevant after two weeks, the wasted effort would be the amount paid to all the developers for their work in those two weeks. 

To increase productivity and reduce the time to market, measure KPIs for software development, such as wasted effort, and find ways to reduce it for project success. 

Wasted Effort = (Total wasted effort / Total effort) X 100

The interruption metrics measure the total number of interrupted tasks within a given period. You can also measure the total number of interruptions within a task to get a clearer idea. 

Interruptions directly impact performance and must be measured to stay on realistic timelines. Some examples of interruptions include technical issues, system failures, personal interruptions, or those due to resource unavailability. 

Interruption Rate = (Total number of interruptions / Total time worked) X 100

You need adequate resources to execute your software development lifecycle. Hiring a team of skilled developers sometimes takes time, underscoring the need to set realistic task accomplishment expectations. 

The hiring time defines the period from when the candidate applies for a job until they accept it. With this, account for the ramp time, which refers to the time between when the candidate is hired for a role and when they become fully productive in it. 

Consider both these markers while estimating the software development lifecycle. 

Stakeholders often demand an estimated ship date for the software’s completion, and this KPI assists cross-functional departments in planning their work. 

The ship date might change as the operations progress and can be altered when changes occur. 

Also Read: What’s the difference between OKR and KPI ?

Challenges in Implementing Software Development KPIs & Tips to Overcome Them 

When setting software development KPIs, figuring out the most relevant ones for your project can be challenging. How do you choose the most important key performance indicators from the several options? 

We recommend starting with the organizational goals and KPIs that support the strategic initiatives. For example, key areas where software development can significantly impact include improving product quality, increasing customer satisfaction, and reducing the time to market. 

The corresponding KPIs that add business value include code coverage, cycle time, code quality, MTTR for improving product quality, NPS for customer satisfaction, and deployment frequency for go-to-market. 

Gather input from engineers, testers, developers, project managers, and product developers to make this a collaborative effort and increase the likelihood of successful implementation. 

KPIs are not static; they must be regularly adjusted to changing requirements and business goals. You can track them over spreadsheets; however, this has limited scalability owing to version control, lack of automated data changes, and role-based access. 

You need software or a template to track and adjust your software development KPIs for successful project completion. 

Assume a scenario where the development team measures and prioritizes the NPS score but forgets to communicate it to the customer support team. Without this alignment, the support team may prioritize speed over customer experience, undermining the business objective.

Along with measuring the relevant KPI metric, you must communicate it with relevant team members so they understand its significance and alignment with company goals. 

Without using a common dashboard or software , how do you ensure everyone is aligned on the KPIs and is empowered to contribute to achieving them? 

Spreadsheet-based data tracking has several shortcomings, including duplicate entries, manual data entry errors, and outdated information, which can misguide decisions. 

Data silos get created in many companies where each department works in isolation with its own data and methodologies. 

For example, the cybersecurity team within the organization may work on different data sources. In contrast, the development team could have separate methodologies, while these teams have a common goal—reducing software vulnerabilities prone to cyber-attacks. 

The result is a fragmented landscape without a single source of truth. Organizations cannot undervalue the importance of data hygiene and timeliness for sound decision-making, especially when cross-functional teams collaborate toward a shared goal. Having a single source of truth , with all teams having access to the same centralized data, is essential.

How to Track and Implement Software Development KPIs

Once you know the key software development KPIs, the next question is how you will track and implement them. 

Tracking software KPIs is time-consuming and erroneous without effective tools that provide distinct data points in a clear and actionable manner. 

ClickUp is a comprehensive platform for tracking all your key performance indicators related to your software project and ensuring they are aligned with your business and strategic objectives. 

You can customize the ClickUp Dashboards to track the most relevant KPIs with real-time data and inculcate effective and timely decision-making. The dashboard can be customized with sprint reporting cards such as velocity cards, burndown cards, burnup cards, cumulative flow, cycle time, and lead time. 

All these cards are updated regularly (except for velocity) to simplify KPI tracking and measure development efforts. These cards have various customization options, including source, time range, sample period, amount of work, task filters, etc. 

ClickUp Dashboards integrate valuable data from distinct sources to provide a holistic idea of the software development project metrics and performance. This data can be used to make data-driven decisions about the software development process, optimize resource allocation, and the overall development process. 

Success is a matter of staying ahead of the KPIs, and as a manager, you must measure what’s working and what’s not for your software development team. 

ClickUp software development templates are designed for high-quality software development. They come with ready-to-use, fully customizable subcategories and help track project management KPIs with custom views, statuses, and fields. 

ClickUp KPI Template makes KPI measurement a breeze whether you’re a startup or an established business. With this template, you can: 

• Stay updated on your most important data points—all in one place for all your software developers 
• Get visibility into your development team’s efforts by tracking progress against goals 
• Identify trends and track and measure the progress of your key performance indicators KPIs with a visual diagram 

Here is how ClickUp for Software Development Teams simplifies KPIs measurement:

• Create goals : Draft measurable and achievable goals that align with your long and short-term objectives 
• ClickUp Dashboard : Identify the metrics that best suit your needs and use the dashboard to track them
• Create milestones : Trace the metrics yourself or employ automated analytics tools to track real-time performance 
• Analyze results : Use the ClickUp Gantt chart view or board view to analyze the results and modify targets as required

Related: Product management KPIs 🎯

Quality assurance must be central to measuring software development metrics, from identifying security flaws to testing the software for bug identification. 

A structured and dependable testing process ensures the development team fixes all the bugs and problems before the customer uses your product/software. 

Additionally, optimal quality delivery reduces code rework time and decreases the bug rate and defeat detection ratio. This is why we recommended optimizing the quality assurance for swift and smooth software development processes. 

Software development is an iterative process that requires frequent monitoring and adjustments to ensure project success. Setting software development KPIs keeps everyone accountable and ensures software development efforts focus on business objectives.

They serve as the North Star for software development teams, measuring daily progress and helping the leadership and managers better understand the bigger picture. 

Integrate ClickUp’s project management software with the software delivery process to measure progress, track KPIs, adjust them as needed, and optimize your development process.

Sign up on ClickUp for free to set and track your software development KPIs.

Questions? Comments? Visit our Help Center for support.

Receive the latest WriteClick Newsletter updates.

Thanks for subscribing to our blog!

Please enter a valid email

• Free training & 24-hour support
• Serious about security & privacy
• 99.99% uptime the last 12 months

• Personal Finance
• Today's Paper
• Partner Content
• Entertainment
• Social Viral
• Pro Kabaddi League

Patel Engineering Ltd leads losers in 'A' group

Aditya Birla Sun Life Q4 PAT climbs 54% YoY to Rs 208 crore

Barometers turn range bound; pharma shares advance, volumes spurt at aditya birla capital ltd counter, aditya birla capital gains on plan to amalgamate aditya birla finance with itself, indices trade with minor gains; pharma shares advance, shiva mills ltd leads losers in 'b' group, sprayking soars after order win, barometers trade with modest gains; psu bank shares advance, volumes soar at sbfc finance ltd counter, metal shares slide.

Disclaimer: No Business Standard Journalist was involved in creation of this content

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Apr 30 2024 | 3:00 PM IST

Explore News

• Suzlon Energy Share Price Adani Enterprises Share Price Adani Power Share Price IRFC Share Price Tata Motors Share Price Tata Steel Share Price Yes Bank Share Price Infosys Share Price SBI Share Price Tata Power Share Price HDFC Bank Share Price
• Latest News Company News Market News India News Politics News Cricket News Personal Finance Technology News World News Industry News Education News Opinion Shows Economy News Lifestyle News Health News
• Today's Paper About Us T&C Privacy Policy Cookie Policy Disclaimer Investor Communication GST registration number List Compliance Contact Us Advertise with Us Sitemap Subscribe Careers BS Apps
• Budget 2024 Lok Sabha Election 2024 IPL 2024 Pro Kabaddi League IPL Points Table 2024