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Kpis meaning + 27 examples of key performance indicators.

As your organization builds the foundation of your strategic plan, it’s likely to come to your attention you’ll need to gain consensus around what your key performance indicators (KPIs) will be and how they will impact your plan. If you don’t know the basics of KPIs or need guidance on KPI development, we are here to help!

We’ve compiled a complete guide that includes an overview of what makes a good KPI, the benefits of good key performance indicators (KPIs), and a list of KPI examples organized by department and industry to reference build your organization’s strategic plan and goals.

What is a Key Performance Indicator KPI — KPI Definition

Key performance indicators, or KPIs, are the elements of your organization’s plan that express the quantitative outcomes you seek and how you will measure success. In other words, they tell you what you want to achieve and by when.

They are the qualitative, quantifiable, outcome-based statements you’ll use to measure progress and determine if you’re on track to meet your goals or objectives. Good plans use 5-7 KPIs to manage and track their progress against goals. A good key performance indicator measures strategic goals.

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What is KPI Meaning, and Why Do You Need Them?

Key performance indicators are intended to create a holistic picture of how your organization is performing against its intended targets, organizational goals, business goals, or objectives. A great key performance indicator should accomplish all the following:

• Outline and measure your organization’s most important set of outputs.
• Work as the heartbeat of your performance management process and confirm whether progress is being made against your strategy.
• Represent the key elements of your strategic plan that express what you want to achieve by when.
• Measure the quantifiable components of your strategic goals and objectives.
• Measure the most important leading indicators and lagging measures in your organization.

The Five Elements of a KPI

These are the heartbeat of your performance management process and must work well! Your plan’s strategic KPIs tell you whether you’re making progress or how far you are from reaching your goals. Ultimately, you want to make progress against your strategy. You’ll live with these KPIs for at least the quarter (preferably the year), so make sure they’re valuable!

Great strategies track the progress of core elements of the plan. Each key performance indicator needs to include the following elements:

• A Measure: Every KPI must have a measure. The best ones have more specific or expressive measures.
• A Target: Every KPI needs to have a target that matches your measure and the period of your goal. These are generally a numeric values you’re seeking to achieve.
• A Data Source: Each of these needs to have a clearly defined data source so there is no gray area in measuring and tracking each.
• Reporting Frequency: Different measures may have different reporting needs, but a good rule to follow is to report on them at least monthly.
• Owner: While this isn’t a mandatory aspect of your KPI statement, setting expectations of who will take care of tracking, reporting, and refining specific KPIs is helpful to your overall organizational plan.

Indicators vs. Key Performance Indicators

An indicator is a general term that describes a business’s performance metrics.

There can be several types of indicators a company may track, but not all indicators are KPIs, especially if they don’t tie into an organization’s overall strategic plan or objectives, which is a MUST!

Key Performance Indicators

On the other hand, a key performance indicator is a very specific indicator that measures an organization’s progress toward a specific company-wide goal or objective. We typically recommend you narrow down the KPIs your organization tracks to no more than 7. When you track too many goals, it can get daunting and confusing.

Pro Tip : You should only track the best and most valuable indicators that tie to your organization’s long-term strategic goals and direction.

Benefits of Good Key Performance Indicators

What benefits do key performance indicators have on your strategic plan, and on your organization as a whole? A lot of benefits, actually! They are extremely important to the success of your strategic plan as they help you track progress of your goals. Implementing them correctly is critical to success.

• Benefit #1: They provide clarity and focus to your strategic plan by measuring progress and aligning your team’s efforts to the organization’s objectives. They also show your measurable progress over time and create ways to track your organization’s continued improvement.
• Benefit #2: Key performance indicators create a way to communicate a shared understanding of success. They give your team a shared understanding of what’s important to achieve your long-term vision and create a shared language to express your progress.
• Benefit #3: They provide signposts and triggers to help you identify when to act. A good balance of leading and lagging key performance indicators allow you to see the early warning signs when things are going well, or when it’s time to act.

How to Develop KPIs

We’ve covered this extensively in our How to Identify Key Performance Indicators post. But, here’s a really quick recap:

Step 1: Identify Measures that Contribute Directly to Your Annual Organization-wide Objectives

Ensure you select measures that can be directly used to quantify your most important annual objectives.

PRO TIP: It doesn’t matter what plan structure you’re using – balanced scorecard, OKRs, or any other framework – the right KPIs for every objective will help you measure if you’re moving in the right direction.

Step 2: Evaluate the Quality of Your KPI

Select a balance of leading and lagging indicators (which we define later in the article) that are quantifiable and move your organization forward. Always ensure you have relevant KPIs. Having the right key performance indicators makes a world of difference!

Step 3: Assign Ownership

Every key performance indicator needs ownership! It’s just that simple.

Step 4: Monitor and Report with Consistency

Whatever you do, don’t just set and forget your goals. We see it occasionally that people will select measures and not track them, but what’s the point of that? Be consistent. We recommend selecting measures that can be reported upon at least monthly.

The 3 Types of KPIs to Reference as You Build Your Metrics

Key performance indicators answer the quantifiable piece of your goals and objectives . here are three types of KPIs. Now that you know the components of great key performance indicators, here are some different ones that you might think about as you’re putting your plan together:

Broad Number Measures

The first type of KPI is what we like to call broad number measures. These are the ones that essentially count something. An example is counting the number of products sold or the number of visits to a webpage.

PRO TIP: There is nothing wrong with these, but they don’t tell a story. Great measures help you create a clear picture of what is going on in your organization. So, using only broad ones won’t help create a narrative.

KPI Type #2: Progress Measures

Progress key performance indicators are used to help measure the progress of outcomes . This is most commonly known as the “percent complete” KPI, which is helpful in measuring the progress of completing a goal or project. These are best when quantifiable outcomes are difficult to track, or you can’t get specific data.

PRO TIP: Progress KPIs are great, but your KPI stack needs to include some easily quantifiable measures. We recommend using a mixture of progress KPIs and other types that have clear targets and data sources.

KPI Type #3: Change Measures

The final type of KPI is a change indicator. These are used to measure the quantifiable change in a metric or measure. An example would be, “X% increase in sales.” It adds a change measure to a quantifiable target and is usually measured as a percentage increase in a given period of time.

The more specific change measures are, the easier they are to understand. A better iteration of the example above would be “22% increase in sales over last year, which represents an xyz lift in net-new business.” More expressive measures are better.

PRO TIP: Change measures are good for helping create a clear narrative . It helps explain where you’re going instead of just a simple target.

Leading KPIs vs Lagging KPIs

Part of creating a holistic picture of your organization’s progress is looking at different types of measures, like a combination of leading and lagging indicators. Using a mixture of both allows you to monitor progress and early warning signs closely when your plan is under or over-performing (leading indicator) and you have a good hold on how that performance will impact your business down the road (lagging indicator). Here’s a deep dive and best practices on using leading versus lagging indicators:

Leading Indicator

We often refer to these metrics as the measures that tell you how your business might/will perform in the future. They are the warning buoys you put out in the water to let you know when something is going well and when something isn’t.

For example, a leading KPI for an organization might be the cost to deliver a good/service. If the cost of labor increases, it will give you a leading indicator that you will see an impact on net profit or inventory cost.

Another example of a leading indicator might be how well your website is ranking or how well your advertising is performing. If your website is performing well, it might be a leading indicator that your sales team will have an increase in qualified leads and contracts signed.

Lagging Indicator

A lagging indicator refers to past developments and effects. This reflects the past outcomes of your measure. So, it lags behind the performance of your leading indicators.

An example of a lagging indicator is EBITA. It reflects your earnings for a past date. That lagging indicator may have been influenced by leading indicators like the cost of labor/materials.

Balancing Leading and Lagging Indicators

If you want to ensure that you’re on track, you might have a KPI in place telling you whether you will hit that increase, such as your lead pipeline. We don’t want to over-rotate on this, but as part of a holistic, agile plan, we recommend outlining 5-7 key performance metrics or indicators in your plan that show a mix of leading and lagging indicators. .

Having a mixture of both gives you both a look-back and a look-forward as you measure the success of your plan and business health. A balanced set of KPIs also gives you the data and business intelligence you need for making decision making and strategic focus.

We also recommend identifying and committing to tracking and managing the same KPIs for about a year, with regular monthly or quarterly reporting cadence, to create consistency in data and reporting.

Any shorter tracking time frame won’t give you a complete picture of your performance. Always moving your KPI targets is also a sure way to miss how you’re actually performing.

27 KPI Examples

Sales key performance indicators.

Sales KPIs are essential metrics for evaluating a company’s revenue generation process and leading indicators for achieving financial goals. Using sales performance KPIs can provide leading insights beyond traditional financial metrics, which are often considered lagging indicators

• Number of contracts signed per quarter
• Dollar value for new contracts signed per period
• Number of qualified leads per month
• Number of engaged qualified leads in the sales funnel
• Hours of resources spent on sales follow up
• Average time for conversion
• Net sales – dollar or percentage growth
• New sales revenue
• Growth rate
• Customer acquisition count
• Lead conversion rate
• Average sales cycle

Increase the number of contracts signed by 10% each quarter.

• Measure: Number of contracts signed per quarter
• Target: Increase number of new contracts signed by 10% each quarter
• Data Source: CRM system
• Reporting Frequency: Weekly
• *Owner: Sales Team
• Due Date: Q1, Q2, Q3, Q4

Increase the value of new contracts by $300,000 per quarter this year.

• Measure: Dollar value for new contracts signed per period
• Data Source: Hubspot Sales Funnel
• Reporting Frequency: Monthly
• *Owner: VP of Sales

Increase the close rate to 30% from 20% by the end of the year.

• Measure: Close rate – number of closed contracts/sales qualified leads
• Target: Increase close rate from 20% to 30%
• *Owner: Director of Sales
• Due Date: December 31, 2024

Increase the number of weekly engaged qualified leads in the sales from 50 to 75 by the end of FY23.

• Measure: Number of engaged qualified leads in sales funnel
• Target: 50 to 75 by end of FY2024
• Data Source: Marketing and Sales CRM
• *Owner: Head of Sales

Decrease time to conversion from 60 to 45 days by Q3 2024.

• Measure: Average time for conversion
• Target: 60 days to 45 days
• Due Date: Q3 2024

Increase number of closed contracts by 2 contracts/week in 2024.

• Measure: Number of closed contracts
• Target: Increase closed contracts a week from 4 to 6
• Data Source: Sales Pipeline
• *Owner: Sales and Marketing Team

Examples of KPIs for Financial

• Growth in revenue
• Net profit margin
• Gross profit margin
• Operational cash flow
• Current accounts receivables
• Operating expenses
• Average cost of goods or services
• Average account lifetime total value

Financial KPIs as SMART Annual Goals

Grow top-line revenue by 10% by the end of 2024.

• Measure: Revenue growth
• Target: 10% growt
• Data Source: Quickbooks
• *Owner: Finance and Operations Team
• Due Date: By the end 2024

Increase gross profit margin by 12% by the end of 2024.

• Measure: Percentage growth of net profit margin
• Target: 12% net profit margin increase
• Data Source: Financial statements
• *Owner: Accounting Department

Increase net profit margin from 32% to 40% by the end of 2024.

• Measure: Gross profit margin in percentage
• Target: Increase gross profit margin from 32% to 40% by the end of 2024
• Data Source: CRM and Quickbooks
• *Owner: CFO

Maintain $5M operating cash flow for FY2024.

• Measure: Dollar amount of operational cash flow
• Target: $5M average
• Data Source: P&L
• Due Date: By the end FY2024

Collect 95% of account receivables within 60 days in 2024.

• Measure: Accounts collected within 60 days
• Target: 95% in 2024
• Data Source: Finance
• Due Date: End of 2024

Examples of Customer Service KPIs

• Number of customers retained/customer retention
• Customer service response time
• Percentage of market share
• Net promotor score
• Customer satisfaction score
• Average response time

Customer KPIs in a SMART Framework for Annual Goals

90% of current customer monthly subscriptions during FY2024.

• Measure: Number of customers retained
• Target: Retain 90% percent of monthly subscription customers in FY2024
• Data Source: CRM software
• *Owner: Director of Client Operations

Increase market share by 5% by the end of 2024.

• Measure: Percentage of market share
• Target: Increase market share from 25%-30% by the end of 2024
• Data Source: Market research reports
• Reporting Frequency: Quarterly
• *Owner: Head of Marketing

Increase NPS score by 9 points in 2024.

• Measure: Net Promoter Score
• Target: Achieve a 9-point NPS increase over FY2024
• Data Source: Customer surveys
• *Owner: COO

Achieve a weekly ticket close rate of 85% by the end of FY2024.

• Measure: Average ticket/support resolution time
• Target: Achieve a weekly ticket close rate of 85%
• Data Source: Customer support data
• *Owner: Customer Support Team

Examples of KPIs for Operations

• Order fulfillment time
• Time to market
• Employee satisfaction rating
• Employee churn rate
• Inventory turnover
• Total number of units produced or on-hand
• Resource utilization

Operational KPIs as SMART Annual Goals

Average 3 days maximum order fill time by the end of Q3 2024.

• Measure: Order fulfilment time
• Target: Average maximum of 3 days
• Data Source: Order management software
• *Owner: Shipping Manager

Achieve an average SaaS project time-to-market of 4 weeks per feature in 2024.

• Measure: Average time to market
• Target: 4 weeks per feature
• Data Source: Product development and launch data
• *Owner: Product Development Team

Earn a minimum score of 80% employee satisfaction survey over the next year.

• Measure: Employee satisfaction rating
• Target: Earn a minimum score of 80% employee
• Data Source: Employee satisfaction survey and feedback

Maintain a maximum of 10% employee churn rate over the next year.

• Measure: Employee churn rate
• Target: Maintain a maximum of 10% employee churn rate over the next year
• Data Source: Human resources and payroll data
• *Owner: Human Resources

Achieve a minimum ratio of 5-6 inventory turnover in 2024.

• Measure: Inventory turnover ratio
• Target: Minimum ratio of 5-6
• Data Source: Inventory management software
• *Owner: Operations Department

Marketing KPIs

• Monthly website traffic
• Number of marketing qualified leads
• Conversion rate for call-to-action content
• Keywords in top 10 search engine results/organic search
• Blog articles published this month
• E-Books published this month
• Marketing campaign performance
• Customer acquisition cost
• Landing page conversion rate

Marketing KPIs as SMART Annual Goals

Achieve a minimum of 10% increase in monthly website traffic over the next year.

• Measure: Monthly website traffic
• Target: 10% increase in monthly website
• Data Source: Google analytics
• *Owner: Marketing Manager

Generate a minimum of 200 qualified leads per month in 2024.

• Measure: Number of marketing qualified leads
• Target: 200 qualified leads per month
• Data Source: Hubspot

Achieve a minimum of 10% conversion rate for on-page CTAs by end of Q3 2024.

• Measure: Conversion rate on service pages
• Target: 10%
• Due Date: End of Q3, 2024

Achieve a minimum of 20 high-intent keywords in the top 10 search engine results over the next year.

• Measure: Keywords in top 10 search engine results
• Target: 20 keywords
• Data Source: SEM Rush data
• *Owner: SEO Manager

Publish a minimum of 4 blog articles per month to earn new leads in 2024.

• Measure: Blog articles
• Target: 4 per month
• Data Source: CMS
• *Owner: Content Marketing Manager
• Due Date: December 2024

Publish at least 2 e-books per quarter in 2024 to create new marketing-qualified leads.

• Measure: E-Books published
• Target: 2 per quarter
• Data Source: Content management system

Bonus: +40 Extra KPI Examples

Supply chain example key performance indicators.

• Number of on-time deliveries
• Inventory carry rate
• Months of supply on hand
• Inventory-to-sales Ratio (ISR)
• Carrying cost of inventory
• Inventory turnover rate
• Perfect order rate
• Inventory accuracy

Healthcare Example Key Performance Indicators

• Bed or room turnover
• Average patient wait time
• Average treatment charge
• Average insurance claim cost
• Medical error rate
• Patient-to-staff ratio
• Medication errors
• Average emergency room wait times
• Average insurance processing time
• Billing code error rates
• Average hospital stay
• Patient satisfaction rate

Human Resource Example Key Performance Indicators

• Organization headcount
• Average number of job vacancies
• Applications received per job vacancy
• Job offer acceptance rate
• Cost per new hire
• Average salary
• Average employee satisfaction
• Employee turnover rate
• New hire training Effectiveness
• Employee engagement score

Social Media Example Key Performance Indicators

• Average engagement
• % Growth in following
• Traffic conversions
• Social interactions
• Website traffic from social media
• Number of post shares
• Social visitor conversion rates
• Issues resolved using social channel
• Social media engagement

Conclusion: Keeping a Pulse on Your Plan

With the foundational knowledge of the KPI anatomy and a few example starting points, it’s important you build out these metrics with detailed and specific data sources so you can truly evaluate if you’re achieving your goals. Remember, these will be the 5-7 core metrics you’ll live by for the next 12 months, so it’s crucial to develop effective KPIs that follow the SMART formula. They should support your business strategy, measure the performance of your strategic objectives, and help you make better decisions.

A combination of leading and lagging KPIs will paint a clear picture of your organization’s strategic performance and empower you to make agile decisions to impact your team’s success.

Need a Dedicated App to Track Your Strategic Plan with KPI Dashboards? We’ve got you covered.

The StrategyHub by OnStrategy is a purpose built tool to help you build and manage a strategic plan with KPIs. Run your strategy reviews with zero prep – get access to our full suite of KPI reports, dynamic dashboards for data visualization, access to your historical data, and reporting tools to stay connected to the performance of your plan. Get 14-day free access today!

Our Other KPI Resources

We have several other great resources to consider as you build your organization’s Key Performance Indicators! Check out these other helpful posts and guides:

• OKRs vs. KPIs: A Downloadable Guide to Explain the Difference
• How to Identify KPIs in 4 Steps
• KPIs vs Metrics: Tips and Tricks to Performance Measures
• Guide to Establishing Weekly Health Metrics

FAQs on Key Performance Indicators

KPI stands for Key Performance Indicators. KPIs are the elements of your organization’s business or strategic plan that express what outcomes you are seeking and how you will measure their success. They express what you need to achieve by when. KPIs are always quantifiable, outcome-based statements to measure if you’re on track to meet your goals and objectives.

The 4 elements of key performance indicators are:

• A Measure – The best KPIs have more expressive measures.
• A Target – Every KPI needs to have a target that matches your measure and the time period of your goal.
• A Data Source – Every KPI needs to have a clearly defined data source.
• Reporting Frequency – A defined reporting frequency.

No, KPIs (Key Performance Indicators) are different from metrics. Metrics are quantitative measurements used to track and analyze various aspects of business performance, while KPIs are specific metrics chosen as indicators of success in achieving strategic goals.

16 Comments

HI Erica hope your are doing well, Sometime Strategy doesn’t cover all the activities through the company, like maintenance for example may be quality control …. sure they have a contribution in the overall goals achievement but there is no specific new requirement for them unless doing their job, do u think its better to develop a specific KPIs for these department? waiting your recommendation

Thanks for your strategic KPIs

Hello Erica, Could you please clarify how to set KPIs for the Strategic Planning team?

Hi Diana, check out the whitepaper above for more insight!

Hello Erica, Could you please clarify, how to set the KPIs for the Strategic PLanning team?

exampels of empowerment kpis

I found great information in this article. In any case, the characteristics that KPIs must have are: measurability, effectiveness, relevance, utility and feasibility

How to write methodology guidelines for strategy implementation / a company’s review and tracking (process and workflow) for all a company’s divisions

support on strategizing Learning & Development for Automobile dealership

Could you please to clarify how to write the KPIs for the Secretary.

Check out our guide to creating KPIs for more help here: https://onstrategyhq.com/kpi-guide-download/

That’s an amazing article.

Could you please to clarify how to write the KPIs for the office boy supervisor

Could you please clarify how to write KPIs for the editorial assistant in a start up publishing company.

Kindly advice how I would set a kpi for a mattress factory

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51 Key Performance Indicator (KPI) Examples & Templates

Erica Golightly

Senior Writer

July 16, 2024

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How do you encourage your team to think about and achieve organizational goals? The first step is to take a deep inventory of your key performance indicators (KPIs). 

The thing is, KPIs will get the team motivated for the first few months, then lost in long email threads, and revisited the day before an important meeting with senior leadership. 

Well-designed KPIs will empower teams to solve inefficiencies, eliminate time-sucking requests, and align tasks and projects with company-wide goals . This is what we want for you and your team, so we’ve put together a catalog of KPI examples and templates to answer your questions: 

In what condition does a metric become a KPI? Who is part of the KPI development process? Where do I track KPI progress? How do I drive action and motivate my team toward the outcome?

We’ll cover all of the above—and then some—because KPIs are the secret sauce of modern business strategy. And everyone is qualified for the task. 

What is a KPI?

How to define key performance indicators , sales kpi examples, operations kpi examples, finance kpi examples, marketing kpi examples, website kpi examples, design kpi examples, startup kpi examples, product kpi examples, saas kpi examples, human resources kpi examples, how to write kpis, how to measure kpis  , stay on track with measurable kpis.

A Key Performance Indicator or KPI is a quantifiable metric used to monitor progress in achieving business objectives. More specifically, a KPI gives performance insight into an organization’s most important asset: the people.

Businesses invest time, effort, and money to hire problem solvers—people who have strengths in analyzing and interpreting data to make decisions. And this investment isn’t limited to staffing the IT and Finance departments. It’s been said that a workforce with data literacy skills helps improve the company’s overall health and performance. 

Meaning everyone—front-line employees, managers, and senior leadership—has an influence on organizational goals. So as a team leader, you have the responsibility to give the people thoughtful, specific, and measurable KPIs . 

If you’re more of a visual learner, check out this vlog about setting KPIs!

If you take one thing away from this guide, let it be this: effective key performance indicators allow people to make accurate and fast decisions . 

The first mistake businesses make when they’re brainstorming KPIs is sending an email to all department leaders with the subject line: What Are You Going To Do About All Of These Really Bad Metrics? 

Instead, businesses should target the metrics which have the most impact on their sustainability. When you focus on needle-moving projects, tools, and systems, you are building a business roadmap to maximize your speed towards revenue growth. 

So here is a step-by-step checklist to help you start your KPIs the right way: 

1. Identify business metrics directly related to business goals

Let’s start with the basics that Sales KPIs look different from Product KPIs , which are different from Finance KPIs . Ask your area direct performance indicator questions to understand what they want to achieve and their criteria for success . This group will use these business metrics as a guide for the next month, quarter, or year. If a key performance indicator does not contribute to a business goal , it’s gotta go! 

• What’s the problem you want to solve in your process/team/organization? 
• What’s the outcome you want to achieve?
• How will you measure success?
• How will you know if you’ve achieved your outcome? 

Bonus: Product requirements document templates

2. Write out clear and specific key performance indicators

Once you have their insights, organize the metrics into two categories: leading and lagging indicators. 

• Leading indicators will let them know if they need to pivot or adjust their strategy to get back on track toward achieving their desired outcome
• Lagging indicators are the opposite. These key performance indicators determine how well processes and updates are performed over a longer period of time

Pro Tip : It might be tempting to use corporate shorthand or fluffy words, but remember these KPIs are shared company-wide, so it has to be clear to everyone.

3. Get KPIs into a remote-first tool to record and monitor progress

We’ll say it: KPI reports are not the most thrilling to build.

It’s an (almost) everyday task requiring time to turn raw data into actionable insights. So much so, KPI reports typically have a short life span after it reaches an inbox for a few reasons:

• Reports are outdated by the end of the day because data changes by the hour
• Reports in a PDF or Excel format look different on various screens
• Reports sent through email are not secure

Getting the right information at the right time is a necessity for data-driven businesses. People want to access KPIs on their smartphones, desktops, and even on the big screen at the office. If you’re looking for a free dashboard tool to meet these needs, try ClickUp!

51 KPI Examples and Templates to Measure Progress

Here at ClickUp, we’re super fans of KPIs and you , so our team got to work and pulled together a list of key performance indicators and free templates sorted by the department or industry. 

1. Customer Acquisition Cost : The total cost of acquiring a customer (includes costs spent on the sales process and through marketing efforts) 2. Sales Activities Per Rep : The total number of tasks completed in a given time period 3 . Lead to Client Conversation Rate : The percentage of leads converted in your sales process 4. Total Sales Revenue : The total revenue generated from your products over a defined period 5. Sales Cycle Length : The average time it takes between initial contact through closing

Try ClickUp’s Commission Tracking template  

6. Overtime Hours : The number of hours worked by an employee beyond their normally scheduled working hours 7. Processes Developed : The number of improvements made to current operational  8. Inventory Costs : The total amount of all expenses related to storing unsold goods 9. Office Space Utilization : The percentage of the office space used by employees 10. Company Perks Usage : The percentage of perks used by employees

ClickUp’s Project Request and Approval template

11. Return on Equity : The measure of financial performance based on net income divided by shareholder equity 12. Net Profit Margin : The amount of money your company has after all expenses (interest, taxes, operating expenses, etc.) have been deducted from your total revenue 13. Cost of Goods Sold : The total cost of manufacturing the products a business sells (excludes sales, administration, and marketing expenses) 14. Debt to Equity Ratio : The ratio of company’s total liabilities against shareholder equity 15. Free Cash Flow : The amount of money remaining after capital expenditures

ClickUp’s Finance templates 

16. Return on Marketing Investment : The return from a marketing investment divided by the costs of the marketing investment 17. Bounce Rate : The percentage of emails that bounced. This happens when the email address is no longer active 18. Click-through Rate : The number of people who clicked a link in your email vs. the total number of people who received your email 19. Organic Impressions : The number of times a piece of content is shown on a person’s newsfeed 20. Subscriber Count : The number of people who subscribed to your email marketing campaigns

Dive into more marketing KPIs and learn the best approach to set your goals!

ClickUp’s Campaign Tracking and Analytics template  

21. Traffic to MQL (Marketing Qualified Lead) Ratio : The ratio of the total traffic platform generated vs. the number of marketing qualified leads coming from that traffic 22. Crawl Errors : The number of URLs that are inaccessible to Googlebot when it scans your pages 23. Bounce Rate : The number of people who exited your site within just a few seconds of arriving 24. Mobile Usability : The speed and performance of your landing page on phones and tabs 25. Referral Traffic : The number of people who visit your website from your social media

ClickUp’s Website Development template

26. Customer Satisfaction Rate : The responses let you know which customers are unhappy, and need some extra attention from your product management teams 27. Standard Compliance : The average number of issues related to not following brand guidelines , processes, or procedures 28. Response Time : The average time it takes for project reviewers and project contributors to respond back to questions, comments, and requests   29. Production Cycle Time : The average time it takes to complete a project from start to finish 30. Revision Time : The average number of rounds or time it takes to reach the final design

ClickUp’s Graphic Design template 

31. Customer Lifetime Value : The revenue your company can expect from individual customer accounts 32. Activation Rate : The percentage of users who complete any major event in the onboarding process 33. Runway : The number of months the company can operate before running out of money 34. Average Sales Cycle Length : The number of days it takes to close a deal on average 35. Monthly Burn : The amount of cash spent per month

ClickUp’s Task Management template

36. Net Promoter Score (NPS) : The number indicating whether your users are ready to recommend your product to their friends, colleagues, etc. 37. Support Ticket Escalations : The number of tickets moved to a higher-level Customer Support Manager to resolve  38. Customer Satisfaction Rate (CSAT) : The scale rate of a customer’s overall experience with a company’s product, service, or employee  39. Velocity : The total number of manual and automated tests performed 40. Daily Active User : The number of active users per day

ClickUp’s Bug and Issue Tracking template

41. Net Promoter Score (NPS) : The number indicating whether your users are ready to recommend your product to their friends, colleagues, etc. 42. Month Over Month (MoM) Monthly Recurring Revenue (MRR) Growth Rate : The percentage increase or decrease month over month in net MRR 43. Annual Recurring Revenue (ARR) : The predicted amount of yearly revenue earned from customers 44. Churn Rate : The percentage rate at which customers leave a business over a given period of time  45. Processes Developed : The number of improvements made to current operational processes 46. Lead Velocity Rate : The total number of manual and automated tests performed

ClickUp’s Customer Support template

47. Recruiting Conversion Rate : The percentage of applicants who were hired vs. total number of applicants you processed ( track with ATS !) 48. Cost Per Hire : The total cost of hiring each employee (including hiring, training, or onboarding costs and other HR KPIs ) 49. Average Training Costs : The amount of money spent on employee training and development 50. Absenteeism Rate : The percentage of employees who are absent over a given time period 51. Employee Turnover Rate : The percentage of employees who left the company

ClickUp’s Hiring Candidates template

Once you’ve collected and measured your data, you’ll need to present them in an easy-to-understand format. This is where an all-in-one solution like ClickUp comes in clutch to provide the best visualization tools!

Before you can track key performance indicators, you have to know how to write strong, impactful KPIs. This is a vital skill that when mastered, can significantly improve your overall business strategy. Here’s how to create a KPI that genuinely measures your team’s effectiveness and efficiency.

1. Clearly Define Your Objectives

Before you can measure performance, you must know what you’re aiming for. Start by clearly defining your business objectives. These may vary depending on your business, but common objectives include increasing sales, achieving financial stability, improving customer satisfaction, fostering employee engagement, or enhancing product quality.

2. Identify Critical Areas of Your Business

Not every aspect of your business needs a KPI. Thus, the next step is to identify your business’s vital areas which impact the success of your objectives. For instance, if your objective includes financial stability, then the financial department might be a critical area to keep an eye on.

3. Choose the Right KPI

Now that you know your objectives and the essential areas, it’s time to choose an appropriate key performance indicator. A good KPI should be quantifiable, directly tied to your business objectives, and critical to your organization’s success. Choose indicators that give a broad overview while still highlighting the details necessary for making smart decisions.

4. Make It Measurable

An effective KPI is quantifiable and easy to track. After all, you can’t manage what you can’t measure. Stick to a limited number of clear and specific metrics that give a direct indication of your performance.

5. Include A Time Frame

Including a clear timeframe is essential for gaining an accurate reading of your performance. For instance, note down whether your targets are expected to be achieved within a quarter, six months, or an entire fiscal year.

6. Review Regularly

Remember that KPIs are not static. They are dynamic and must be reviewed periodically to ensure their relevance to the evolving business environment. Continuous review also helps identify if the KPIs are being met, and if any adjustments need to be made.

7. Communicate

Lastly, communicate your KPIs to your team members so everyone is on the same page and working towards the same goals. Well-defined KPIs are typically simple, understandable, and attainable.

Keep in mind that writing KPIs is more of an art than a science. You would need to keep adjusting and defining them until you find the format that best suits your needs. The goal is to develop KPIs

With your key performance indicators and templates ready to track, the next step is to compile them into a digital solution like ClickUp!

ClickUp is an all-in-one productivity platform where teams come together to plan, organize, and collaborate on work using tasks, Docs, Chat, Goals, Whiteboards, and more. Easily customized with just a few clicks, ClickUp lets teams of all types and sizes deliver work more effectively, boosting productivity to new heights!

Here’s a closer look at why teams love using ClickUp as their goal-tracking hub and KPI Dashboard:

Align KPI-related tasks and activities with Goals in ClickUp 

Goals in ClickUp are high-level containers broken into smaller Targets. Once you take action on a Target, click the Target name to update your progress. Depending on which type you use, your Target will have different tracking options:

• Number : Create a range of numbers and track increases or decreases between them
• True/False : Use a Done/Not Done checkbox to mark your Target complete
• Currency : Set a monetary Goal and track any increases or decreases
• Task : Track the completion of a single task, or an entire List. (A badge appears in a task’s details with the name of the attached Goal!)

Leverage KPI reporting with ClickUp Dashboards

Dashboards in ClickUp will replace the weekly reports piling up in your manager’s inbox. Build, display, and interact from a single source of truth with all the KPIs front and center. 

And you don’t need to be a data scientist or graphic designer to create Dashboards in ClickUp! With a drag-and-drop action, you can organize your Dashboards to visualize how work is happening in your Workspace in any way you want. 

What are the benefits of tracking KPIs as a team?

KPIs help define clear and measurable criteria for success, allowing teams to work towards specific goals while continuously measuring their progress. This provides teams with a sense of direction, focus and purpose, which can lead to increased engagement and motivation.

How do you select KPIs for a team?

The selection of appropriate KPIs will depend on the team’s purpose, goals and objectives. While there is no one-size-fits-all approach, a team can identify KPIs by considering their goals and objectives, analyzing past performance, and considering external factors that may impact their performance.

What should I do if my team isn’t meeting KPI targets?

If your team is not meeting KPI targets, you should first try to identify the root cause of the issue . This may involve providing additional training, resources and support to members of the team. Additionally, you should review and revise the KPIs to make sure they are achievable, relevant and realistic.

Where is the team meeting, exceeding, or not making progress on KPIs? With KPI software , KPI timelines and reporting exist in a centralized location, so anyone can quickly retrieve the data and understand where they are and where they need to be. 

It’s easy to get lost in the data for hours to generate a one-page KPI report. That’s the old way of productivity. 

The right KPI software will simplify the reporting process and give you more time to focus on strategic discussions and activities. 

Keep riding the growth wave, and if you need a fail-proof navigation tool, ClickUp’s got your back! 

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10 KPI Examples to Measure Your Business Performance

• September 7, 2023

Key Performance Indicators (KPIs) are essential tools for measuring the performance and success of your business. By tracking specific metrics, KPIs provide insight into various aspects of your operations, helping you make informed decisions and drive continuous improvement . In this article, we will explore the importance of KPIs, different types of KPIs, how to set the right KPIs for your business and delve into a detailed overview of 10 KPI examples. We will also discuss how to interpret KPI results and use them to improve your business performance. Let’s dive in!

Understanding Key Performance Indicators (KPIs)

KPIs, also known as Key Performance Indicators, are measurable values that demonstrate how effectively an organization is achieving its key business objectives . These objectives could include increasing revenue, improving customer satisfaction, or enhancing operational efficiency. By tracking specific metrics, KPIs provide a clear and concise way to monitor progress towards these goals.

But why are KPIs so important in business?

The Importance of KPIs in Business

Having well-defined KPIs is crucial for several reasons. Firstly, they allow you to assess your current performance and identify areas for improvement. By focusing on specific metrics, you can pinpoint weak spots and take corrective actions to enhance your overall performance. Whether it’s identifying bottlenecks in your production process or addressing customer service issues, KPIs provide valuable insights that drive continuous improvement.

Additionally, KPIs enable you to set realistic targets and measure your success over time . By establishing a baseline through historical data, you can track your progress and evaluate whether you are moving in the right direction. This not only helps you stay on track but also provides a benchmark for setting future goals and objectives.

Now that we understand the importance of KPIs, let’s delve into the different types of KPIs that businesses commonly use.

Different Types of KPIs

KPIs can be broadly categorized into four main types: financial, customer, process, and people KPIs.

Financial KPIs help monitor the financial health of your business. These metrics include revenue growth, profitability, cash flow, and return on investment (ROI). By tracking these indicators, you can gain valuable insights into your organization’s financial performance and make data-driven decisions to drive growth and profitability.

Customer KPIs gauge customer satisfaction and loyalty. These metrics include Net Promoter Score (NPS), customer retention rate, and customer lifetime value (CLV). By understanding your customers’ needs and preferences, you can tailor your products and services to meet their expectations, ultimately increasing customer satisfaction and loyalty.

Process KPIs measure the efficiency and effectiveness of your operations. These metrics include cycle time, defect rate, throughput, and process cost. By monitoring these indicators, you can identify bottlenecks, streamline processes, and improve overall operational efficiency, leading to cost savings and increased productivity.

Finally, people KPIs evaluate the performance and development of your workforce. These metrics include employee satisfaction, turnover rate, training effectiveness, and employee productivity. By focusing on these indicators, you can create a positive work environment, attract and retain top talent, and foster a culture of continuous learning and development.

In conclusion, KPIs play a vital role in measuring and monitoring the success of an organization. By setting clear objectives and tracking relevant metrics, businesses can make informed decisions, drive continuous improvement, and ultimately achieve their key business objectives.

Setting the Right KPIs for Your Business

Aligning kpis with business goals.

When setting KPIs, it is crucial to align them with your overall business goals. Each KPI should directly contribute to the success of your organization and reflect your strategic priorities.

For example, if your goal is to increase customer satisfaction, relevant KPIs might include customer retention rate, customer feedback score, and average resolution time for customer inquiries. These KPIs will provide valuable insights into the effectiveness of your customer service efforts and help you identify areas for improvement.

By focusing on KPIs that align with your objectives, you can effectively measure the progress towards your goals. This alignment ensures that you are tracking the right metrics and making data-driven decisions that drive your business forward.

Common Mistakes in Setting KPIs

While setting KPIs, it is essential to avoid certain pitfalls. One common mistake is selecting too many KPIs that can overwhelm your team and dilute focus. It is recommended to keep the number of KPIs manageable and focused on the most critical aspects of your business.

Another mistake is setting KPIs that are too difficult to measure or obtain reliable data for. Ensure that your KPIs are realistic and measurable, providing actionable insights. For instance, if you set a KPI to improve employee productivity, make sure you have a clear and objective way to measure productivity, such as the number of tasks completed per hour or the reduction in error rates.

Additionally, it is important to regularly review and update your KPIs to ensure they remain relevant and aligned with your evolving business goals. As your business grows and changes, your KPIs may need to be adjusted to reflect new priorities and objectives.

By avoiding these common mistakes and setting the right KPIs, you can effectively measure the success of your business and make informed decisions to drive growth and achieve your goals.

Detailed Overview of 10 KPI Examples

Key Performance Indicators (KPIs) are essential metrics that help businesses monitor and evaluate their performance in various areas. By measuring specific aspects of a business, KPIs provide valuable insights that can guide decision-making and drive improvement. In this detailed overview, we will explore 10 different KPI examples across four key categories: Financial, Customer, Process, and People.

Financial KPIs

Financial KPIs play a crucial role in monitoring the financial performance of a business. These metrics provide insights into the profitability, liquidity, and overall financial health of an organization. Let’s take a closer look at some examples:

• Revenue Growth Rate: This KPI measures the percentage increase in a company’s revenue over a specific period. It helps assess the effectiveness of sales and marketing strategies, as well as the overall demand for the company’s products or services.
• Gross Profit Margin: This KPI indicates the percentage of revenue that remains after deducting the cost of goods sold. It helps evaluate the efficiency of production processes and pricing strategies.
• Return on Investment (ROI): ROI measures the profitability of an investment by comparing the gain or loss relative to its cost. This KPI assists in evaluating the success of investment decisions and identifying areas for improvement.
• Cash Conversion Cycle: This KPI measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. It helps assess the efficiency of cash management and working capital utilization.

Customer KPI Examples

Customer KPIs focus on measuring customer satisfaction and loyalty, providing insights into how well a business is meeting customer expectations. These metrics help identify opportunities for improvement and enhance overall customer experience. Let’s explore some examples:

• Net Promoter Score (NPS): NPS measures the likelihood of customers recommending a company to others. It helps gauge customer loyalty and assess the overall perception of a brand.
• Customer Churn Rate: This KPI calculates the percentage of customers who stop using a company’s products or services over a specific period. It helps identify potential issues in customer retention and loyalty.
• Customer Lifetime Value (CLTV): CLTV represents the total revenue a business can expect from a customer throughout their relationship. This KPI helps evaluate the long-term profitability of customer relationships and guides customer acquisition and retention strategies.
• Customer Acquisition Cost (CAC): CAC measures the average cost of acquiring a new customer. It helps assess the effectiveness of marketing and sales efforts, as well as the efficiency of customer acquisition strategies.

Process KPI Examples

Process KPIs focus on measuring the efficiency and effectiveness of business processes. These metrics enable businesses to identify bottlenecks, improve productivity, and streamline operations. Let’s examine some examples:

• Cycle Time: This KPI measures the time it takes to complete a process or task. It helps identify areas where process improvements can be made and assess the overall efficiency of operations.
• First-Time Fix Rate: This KPI measures the percentage of times a problem or issue is resolved on the first attempt. It helps evaluate the effectiveness of maintenance and support processes, as well as customer satisfaction levels.
• On-Time Delivery: This KPI measures the percentage of orders or deliveries that are completed on time. It helps assess the reliability of supply chain and logistics processes, as well as customer satisfaction levels.
• Defect Rate: This KPI measures the percentage of defective products or services. It helps identify areas for quality improvement and assess the effectiveness of quality control processes.

People KPI Examples

People KPIs focus on measuring the performance and development of a workforce. These metrics provide insights into employee engagement, retention, and the overall capability of an organization’s workforce. Let’s explore some examples:

• Employee Satisfaction: This KPI measures the level of satisfaction and engagement among employees. It helps assess the overall work environment, identify areas for improvement, and evaluate the effectiveness of HR policies and practices.
• Employee Turnover Rate: This KPI calculates the percentage of employees who leave a company over a specific period. It helps identify potential issues in employee retention and assess the effectiveness of talent management strategies.
• Training Effectiveness: This KPI measures the impact and effectiveness of training programs on employee performance and development. It helps evaluate the return on investment in training initiatives and identify areas for improvement.
• Leadership Effectiveness: This KPI assesses the effectiveness of leaders within an organization. It helps evaluate their ability to inspire and motivate employees, drive performance, and achieve organizational goals.

By monitoring and analyzing these KPIs, businesses can gain valuable insights into their performance across various areas. These metrics serve as a compass, guiding decision-making and helping organizations drive continuous improvement and success.

Interpreting KPI Results

Analyzing kpi data.

Once you have gathered data on your KPIs, it is essential to analyze and interpret the results. Look for trends, patterns, and anomalies that can provide insights into your business performance. Compare your KPI results against industry benchmarks or previous periods to gauge your performance relative to others and track progress over time.

Making Data-Driven Decisions

KPI results should drive data-driven decision-making. Use the insights gained from analyzing KPI data to identify areas for improvement, make informed decisions, and implement targeted strategies. For example, if your customer satisfaction KPI indicates a decline, you can analyze customer feedback to pinpoint the underlying issues and take appropriate actions to address them.

Improving Business Performance with KPIs

Continuous monitoring and adjustment.

Monitoring your KPIs regularly is crucial for tracking your progress and ensuring that you stay on track towards your business goals. Regularly review your KPIs, assess your performance, and make adjustments as needed. KPIs provide a feedback loop that allows you to continuously improve and adapt your strategies as your business evolves.

The Role of KPIs in Business Growth

KPIs play a vital role in driving business growth. By measuring and tracking KPI metrics, you can identify growth opportunities, monitor the effectiveness of your growth strategies, and align your resources accordingly. KPIs provide the necessary insights to make informed decisions and drive sustainable growth in a competitive business landscape.

In conclusion, KPIs are powerful tools that help you measure and improve your business performance. By understanding the importance of KPIs, setting the right ones for your business, interpreting the results, and using them to drive improvement, you can effectively monitor and enhance your organization’s success. The 10 KPI examples we explored provide a framework for measuring various aspects of your business. Remember, consistency, regular monitoring, and actionable insights are key to leveraging KPIs effectively. Start implementing KPIs in your business today and unlock the potential for growth and success.

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How To Write KPIs In 4 Steps + Free KPI Template

What Does KPI Stand For?

KPI stands for Key Performance Indicator, a measurable value that shows the organization's progress toward achieving key business objectives. Organizations can use KPIs as a way to track whether their key business objectives are on track, behind, ahead, or have been achieved. 

KPIs are typically used to assess performance against a benchmark (target) or industry standard. They can be applied to various business areas, such as marketing, sales, customer service, and operations, and are often used to guide decision-making and drive continuous improvement.

Check out our KPI Meaning & KPI examples article with 84 examples from different industries!

4 Reasons Why KPIs Are Important 

Like the famous Peter Drucker once said:  "You can't improve what you don't measure."

So, running a business without KPIs is like driving a car with your eyes closed. You don't really know where you're going, and the chances are it won't have a happy ending. 

Now that we've established how fundamental KPIs are for a company's success, let's look into why they are so important and what benefits they provide to organizations:

Act as a scorecard for company health

KPIs provide a snapshot of how well a company is performing. By tracking metrics that are aligned with business goals , KPIs can help managers and leaders quickly assess company health and identify areas that need improvement. KPIs can also provide an easy way to communicate performance to stakeholders, such as investors, partners, or employees.

Measure progress through the tracking of metrics

KPIs allow organizations to track progress toward specific goals and objectives. By measuring and analyzing data on a regular basis, organizations can gain insights into what is working well and what needs improvement. This information can be used to make data-driven decisions, adjust strategies, and optimize processes for better outcomes.

Help identify when to make adjustments

KPIs can help organizations identify when to make adjustments to strategies or operations. By tracking performance against established benchmarks, KPIs can reveal trends and patterns that may indicate areas of concern or opportunities for improvement. This information can be used to make informed decisions about when and how to make adjustments to optimize performance.

Recognize and analyze patterns

KPIs provide valuable insights into patterns and trends in performance over time. By analyzing KPI data, organizations can identify patterns and trends that may indicate underlying causes of performance issues or opportunities for improvement. This information can be used to guide strategic decision-making and inform ongoing efforts to optimize performance.

Quick Overview Of Writing KPIs In 4 Steps:

• Determine strategic objectives
• Define success
• Decide on measurement
• Write your SMART KPIs

✋🏼But before we zoom into each step, let us give you an important tip: don't copy your KPIs straight from someone else's list!

While there's a wealth of KPI examples available online - scrolling through industry lists, picking out a KPI and attempting to force it into your strategy won't do you any favors.

Well, KPIs should be developed to contribute to achieving a specific strategic objective . If they're not developed with a specific strategic objective in mind, they run the risk of stealing attention, time, and money from KPIs that actually help to achieve strategic objectives.

The best KPIs for YOUR business are designed by starting with YOUR specific business objectives. Now, this is not to say all the content available on KPI examples is useless, because it's definitely not - it's actually an important resource. But, looking through KPI examples shouldn't begin till AFTER you have determined your own key strategic objectives.

Ok, let's get into it! 👇🏻

How To Write KPIs In 4 Steps

Your organization's business model, industry, and even the department in which you operate will have an impact on the type of KPI you need.

Luckily, we've devised a best practice process for how to write KPIs that will allow you to create the perfect KPIs every time.

Step 1 - Determine the key strategic objectives

Before writing KPIs, you'll first need to determine which of your organization's strategic objectives you're trying to gauge.

If you've been following along our mini-series "How To Write A Strategic Plan: The Cascade Model' then you will have already defined some strategic objectives for your organization, and you're ready to create some KPIs.

If you haven't defined any strategic objectives (or goals) for your organization yet, check out this article first and then jump back over here to create your KPIs.

E.g. Strategic Objective: Increase the flow of the marketing pipeline by 2025.

Step 2 - Define success

Now that you've identified your strategic objectives, you'll need to begin thinking about what the success of each objective looks like.

Sticking with the same example used in Step 1 , if my objective is to increase the flow of the marketing pipeline, the success of this objective means increasing the number of contacts that enter the pipeline, and increasing the number of contacts that pass through the end of the pipeline and get handed over to Sales.

By first defining what success looks like, deciding how you will measure the success of your objective becomes a lot easier.

When defining the success of your KPI, you will usually find there are multiple parts to the definition of the success of your objectives. In the example used above, we found there were two parts to achieving the success of our objective:

• Increasing the number of contacts that enter the pipeline.
• Increasing the number of contacts that pass through the end of the pipeline and get handed over to Sales.

As mentioned earlier, this is the time when it might be useful to look through a few KPI examples to help get some inspiration for how you can define the success of your key business objectives.

Again, you should avoid copying KPIs straight from a list, as, chances are, they won't perfectly fit your strategic objectives. Instead, use the KPI examples as a way to ideate how you can measure the success of your own strategic objectives.

We've collated a whole bunch of KPI examples already and grouped them by the department to help give you a little inspiration:

• Operational KPIs
• Marketing KPIs
• Financial KPIs
• Customer Service KPIs
• Health & Safety KPIs
• Change Management KPIs
• Product Management KPIs

Looking for specific industry KPIs? We also have some of those:

• Retail KPIs
• Healthcare KPIs
• Higher Education KPIs
• Manufacturing KPIs

Step 3 - Decide on measurement

Next, you'll need to decide how you will actually measure success. Going back to our example once again, we've identified that the success of our objective means increasing the number of contacts that enter our pipeline AND increasing the number of contacts that pass through the end of our pipeline

Let's start with the first part of this - Increasing the number of contacts that enter our pipeline . Contacts enter our marketing pipeline when they subscribe to our mailing list or exchange their details for content for the first time.

When contacts engage in either activity, they automatically get added to our marketing automation platform as a subscriber. Using the number of new subscribers added to our marketing automation platform over a time period is an easy way for us to measure the number of contacts entering our marketing pipeline.

Now let's look at the second part - Increasing the number of contacts that pass through the end of our marketing pipeline. Contacts pass through the end of the marketing pipeline when they're ready to be handed over to our Sales Team.

We use the term "SQL" (Sales Qualified Lead) to define a lead that has moved through the end of our marketing pipeline and is ready for our Sales Team to pick up. Our marketing automation platform adds a tag on each contact profile to identify which life-cycle stage they are in based on a certain activity.

Again, through our marketing automation software, we can use the number of contacts who become a SQL in a given time period to measure our success.

This is where it might be wise to start considering dashboard software to track and display your KPIs.

You'll likely use various platforms and tools across your business to measure your KPIs, but having a central location to track and view all your departmental and organizational KPIs will ensure you have a clear view of your success.

Cascade's Dashboard feature is extremely powerful and allows you to pull data from all around your business, so you can display your most important information, real-time, to whoever in your organization needs it.

📚 Recommended read: 10 Popular KPI Software Tools To Connect & Visualize Your Data (2024 Guide)

Step 4 - Write your KPIs

Finally, it's time to begin actually writing your KPIs. KPIs should follow the SMART format (specific, measurable, attainable, relevant, and time-bound), to ensure your KPIs meet this criterion, we've devised a formula that you can follow to ensure you end up with SMART KPIs every time. 

The main advice here is to keep things simple. KPIs should be understood by everyone within the organization . That means no jargon (if possible), and keeping them to one sentence long.

We suggest a structure as follows:

Action + Detail + Value + Unit + Deadline

Putting it all together, our KPI example may look something like this:

Writing KPIs Example 1

• Increase new HubSpot lead profiles to 40,000 people by 31st December 2025

Writing KPIs Example 2

• Increase new SQL profiles to 20,000 people by 31st December 2025

Starting off with a verb forces you to be specific about what you’re trying to do. A metric and unit ensure your KPI is measurable and a deadline will do wonders for staying timely on your progress.

How Are KPIs Used In An Organization?

Key performance indicators are a communication tool for organizations. They inform business leaders of their organization's progress towards reaching key business objectives.

KPIs are able to provide this information because they actually track the most important performance measures, which can be taken together to represent how successful you are in achieving an objective.

This information channel is extremely valuable as, in a well-designed strategy, an organization's key business objectives should have a direct impact on the organization's overall performance.

Therefore, KPIs will communicate whether your activities are achieving, for example, business growth at the rate expected or not, and how much growth you've actually achieved.

KPIs also assist in identifying issues with organizational processes. If the progress on an objective falls behind, the key performance indicator associated with it will communicate this to business leaders as soon as the trend begins to show itself ( assuming you have leading & lagging KPIs ).

The organization will know that something has gone wrong and an investigation is required. A strategy to mitigate the issue can then be created and implemented before it has far-reaching effects on the organization's performance.

How Many Key Performance Indicators Do You Need?

The question of how many key performance indicators you need will vary with every company. However, we do have a framework that you can apply to help you assess how many KPIs you'll need to implement for your organization.

The number you need will depend on how many key business objectives you have in your organization. As a rule, we generally say you should have 2-3 KPIs per objective, to ensure a variety of measures without overwhelming the picture.

The reason we use a minimum of 2 KPIs as a rule, is because we believe each business objective should have at least 1 leading indicator and 1 lagging indicator.

This allows you to predict future performance as well as record the actual performance and compare these to the direction of your business objective.

Alternative Vs Value-Based Decision-Making

To get a better understanding of why you should always start the KPI process by having first defined strategic objectives, consider the two potential ways of deriving your KPIs:

• Alternative-based decision-making
• Value-based decision-making

Alternative-based decision-making relies on choosing your preferred option from the alternatives offered.

Decision maker: I would like a coffee

Waiter: Sure, what milk would you like?

Decision maker: What do you have?

Waiter: We have full cream, skim, or soy milk?

Decision maker: I'll take the full cream milk.

Value-based decision-making relies on assessing what matters most to you and then making a decision that meets your needs.

Decision maker: (Considers objectives: I like a good tasting coffee, but also want to keep the fat content down because I'm watching my weight) I'll take soy milk with one serve of artificial sweetener.

Waiter: No problem.

As you can see, the decision-maker in the first example listened to the alternatives presented and then selected their preference based on the options given.

However, the decision-maker in the second example examined their objectives and what they really wanted from a cup of coffee first and then made a decision that met their needs.

When writing KPIs, using the alternative-based approach and scrolling through industry KPI lists will leave you with your preferred KPI from that list, but achieving that KPI won't necessarily mean you've achieved your strategic objectives.

On the other hand, using the value-based approach and considering your key strategic objectives first will ensure you end up with KPIs that once achieved, will mean you've also achieved your strategic objectives.

What Are Leading And Lagging KPIs?

Leading and lagging KPIs are often mentioned when it comes to strategy, but what is the difference between the two? A leading KPI indicator is a measurable factor that changes before the company starts to follow a particular pattern or trend.

Leading KPIs are used to predict changes in the company and future performance, but as predictors, they cannot always accurately forecast the future. On the other hand, a lagging KPI is a measurable fact that records the actual performance of an organization.

Leading key performance indicators are often easier to influence than lagging KPIs, however, generally measuring them can prove more difficult.

Lagging KPIs , on the other hand, are usually easier to measure, though much harder to influence. If you'd like to learn more about Leading and Lagging KPIs, check out this article .

KPI Reporting: Tracking & Communicating Performance

Creating relevant, measurable, and time-bound key performance indicators is great, but it's only half the job done. The other half (which can often go overlooked) comes down to figuring out how to actually track and report on them appropriately and accurately.

While it can be tough setting up this kind of tracking and reporting, if you don't create an easy way to view and stay on top of progress, the KPIs aren't going to be of much use. A KPI report is a presentation that displays and communicates the current performance of an organization compared to its business objectives.

It's a tool used by management in order to analyze performance and identify issues. These reports can take many formats, including formal written reports, spreadsheets, powerpoint slides, or dashboards.

KPI Dashboards

Creating a KPI dashboard is a great way to provide at-a-glance views of key performance indicators relevant to a specific business objective, department, or the whole organization.

Now, before your eyes glaze over with boredom as another business term is introduced, dashboards are just another name for a progress report. However, what makes dashboards more powerful than your typical business report is that they're usually hooked up to business systems so the data is automatically updated.

The benefit of this is it ensures the data is always relevant, as it doesn't rely on someone in the organization continuously updating numbers. This is just one of the many benefits of using dashboard software for your strategy report.

Dashboards also give you total visibility of your business performance instantly, display KPI progress in a visual presentation to keep reporting engaging, and save time when compared to the hours poured into creating regular reports.

Kick Off Your KPI Reporting With Our Free Template

To help you get started with KPI reporting, we offer a free KPI reporting template . This template includes two styles within the same spreadsheet, each on different tabs:

1. Table Style KPI Report

The Table Style KPI Report is perfect for detailed, tabular presentation of your KPI data. It's ideal for those who need a thorough, systematic way to enter and analyze KPI data over time.

• Comprehensive structure : You'll find multiple columns to capture a wide range of KPI metrics, ensuring no detail is overlooked.
• Instructional content : The initial rows include references and placeholder text to guide you in easily populating the template.
• Detailed analysis : It's perfect for in-depth analysis and structured data entry.

2. Dashboard Style KPI Report

The Dashboard Style KPI Report is designed for visual and summarized representation of KPI data. This format is ideal for quick insights and high-level overviews.

• Visual presentation : This style emphasizes charts, graphs, and other visual elements for simple data interpretation.
• Quick insights : It provides at-a-glance views of key performance indicators, ideal for stakeholders needing fast performance assessments.
• Summarized data : It's high-level summary view, enables you to quickly identify trends and areas needing attention.

Why use our KPI Reporting Template?

Our KPI reporting template is a great starting point for tracking and reporting your key performance indicators. Here’s how it can benefit your organization:

• Enhanced visibility : Whether you choose the table or dashboard style, our template ensures that all relevant data is easily accessible and interpretable.
• Improved decision-making : It provides a structured way to track and analyze KPIs, supporting data-driven decisions, strategy adjustments, and process optimizations.
• Efficient communication : Makes it easy to communicate performance to stakeholders, ensuring alignment and informed progress towards key objectives.

Limitations of using spreadsheets for KPI Reporting

While spreadsheets are a useful starting point for KPI reporting, they come with several limitations, especially for dynamic and collaborative environments:

• Static nature : Spreadsheets need manual updates, making real-time tracking difficult and time-consuming.
• Version control issues : Sharing spreadsheets across teams can lead to multiple versions—we've all been there—causing confusion and misalignment.
• Limited collaboration : As a static tool, they hinder collaboration and real-time input from multiple users.
• Data integration challenges : Combining data from various sources into a single spreadsheet can be difficult and prone to errors.

These limitations highlight the need for a more robust, integrated solution as you scale your KPI tracking and reporting efforts.

Take Your KPI Reporting To The Next Level With Cascade 📈

While our KPI reporting template is an excellent resource to get started, as you move forward in your KPI journey, a tool like Cascade is the best choice for a more comprehensive and efficient solution. Here’s why:

• Real-time tracking : Cascade allows you to track the progress of your strategic objectives in real time by easily assigning measures (or KPIs) to those objectives.
• Automated updates : Instead of manually updating your KPI progress, you can automate the process by integrating Cascade with tools like Microsoft Excel or Google Sheets.
• Centralized dashboard : Cascade’s powerful dashboard and reporting features pull data from across your business, displaying your most important information in real-time.
• Enhanced collaboration : You can easily add descriptions for context, set timelines, and involve collaborators to ensure everyone is working towards the same goals.

👉 Here's how to set it up in Cascade: 

• Select the objective : Choose the objective you want to track and add the KPI, giving it a name that specifies how you want the objective to be assessed.
• Set timelines : Set a start date and end date to establish a timeline for your KPI.
• Define values : Set the initial and target values for your KPI and clarify the unit you'll be using to measure the result.

You can also give your KPI a description to provide more context and add collaborators that will also be working on achieving that KPI.

🚀 If you want to take it a step further, when you're building your KPIs you can choose the automated tracking option and integrate Cascade with other tools from your business system—we have +1,000 integrations available!

After your KPIs are set in place, you can use Cascade's Report & Dashboard functionalities that allow you to visually see the progress of your KPIs in real-time:

Our KPI Reporting Template (in Excel) is a great tool to kick off your KPI reporting journey. But as you grow, we recommend you transition to a tool like Cascade for a more integrated, automated, and powerful solution.

Want to see Cascade in action?  Get started for free  or  book a 1:1 demo  with Cascade's in-house strategy expert.

📚Editor’s note:

This article was originally part of our ‘How to Write a Strategy’ series. You can find the individual articles here:

• How To Write A Strategic Plan: The Cascade Model
• How to Write a Good Vision Statement
• How To Create Company Values
• Creating Strategic Focus Areas
• How To Write Strategic Objectives
• How To Create Effective Projects
• How To Write KPIs (This Article)

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What’s a KPI?

What’s a smart kpi, what are the benefits of kpis for your business, smart goals versus smart kpis, how to create smart kpis, 16 smart kpi examples, strategically progress toward your goals.

Markets ebb and flow, internal resources wane and grow, and company culture fluctuates. So many moving parts raise the perennial question for managers: How do I keep my teams motivated and on track to achieve business goals?

Whether you manage a team of one or 15, keeping everyone on track is like navigating a boat through new waters. The tides change, and the territory is familiarly unfamiliar — without the right resources to guide the way, it’s easy to feel lost in open water. 

To keep up and maintain a healthy team, it’s essential to consistently set goals and track progress. SMART KPIs are strategically-created metrics that monitor progress toward your objectives to understand when and how to return to the drawing board.

To understand the meaning of SMART KPIs, let’s first break down a KPI.

KPI stands for key performance indicator. This quantifiable measure illustrates the functionality of a business’s structures and processes . You use these metrics to track progress toward your goals. KPIs monitor costs, efficiency, and customer satisfaction, among other things that measure how well different aspects of a business are running. 

Here are six examples of common KPIs:

• Customer acquisition cost is the total cost of converting a new customer, including sales costs, marketing budgets, and other customer outreach initiatives.
• Company perks usage is the percentage of perks used by workers. 
• Recruiting conversion rate is the number of hired candidates versus the number of applicants. 
• Net profit margin is the amount of money after you’ve deducted all expenses from the total revenue.
• Revision time is the average number of rounds or time it takes to reach the final design.
• Absenteeism rate is the percentage of workers who are absent over a specific period.

KPIs provide powerful supporting information to understand the root of organizational weaknesses and the sources of successes. They give you the data necessary to make purposeful decisions . 

For example, a high absenteeism rate can suggest several potential problems, including bad hiring processes , burned-out employees, or a toxic work environment . When you examine high absenteeism rates alongside other KPIs, you can whittle down all the potential variables to find the root problem.

Significant absenteeism, low perks usage, and high revision times may suggest that employee engagement is dwindling. This might be because of a lackluster employee value proposition and complicated operating models .

To reach a specific goal, you must choose KPIs intentionally. The SMART method is an impactful way to ensure you pick good KPIs to track progress toward your objectives. 

SMART stands for specific, measurable, achievable, relevant, and time-bound. People commonly use this method to define their goals , but here’s how you can apply these criteria to choose effective KPIs: 

• Specific: Does the KPI accurately convey the information I need? 
• Measurable: Does this metric measure the success of overall business objectives and can it be measured itself?
• Achievable: Do I have the resources to properly measure and achieve this KPI? 
• Relevant: Is this metric relevant to my goals and what I want to achieve? 
• Time-bound: Does the KPI have a start and end point?

A simple KPI goal might be “shorten sales cycle length,” which tracks the average time it takes from initial contact to closing a sale. A SMART KPI goal would be “Decreasing sales cycle length by 5% each month to decrease sales costs by 15% by the end of Q4.”

Numbers talk. And not just about measuring profits. Backing up business strategies and analyzing performance based on quantitative measurements rather than qualitative assumptions empowers you to make clearer judgments and decisions. 

Here are six reasons you and your team should define SMART KPIs to track short-term goals , long-term objectives, and work tasks: 

• Clarity: When you understand what you’re measuring regarding a strategic goal, it encourages you to use your business acumen to achieve that objective. 
• Motivation: Specific, challenging goals keep workers motivated . And KPIs break down big objectives into specific challenges that encourage you to take ownership of your work and show up for your team. 
• Flexibility: Companies without a road map outlining progress toward goals might lose themselves in the shuffle. KPIs pinpoint what’s working and what isn’t, encourage businesses to adopt more productive strategies, and help leaders construct effective action plans .
• Collaboration: Measuring team and individual performance can make workers feel like their work has a direct impact. It encourages operational excellence by aligning your efforts to the health of your team and the company. 
• Organizational knowledge: Carefully tracked and recorded KPIs create a powerful knowledge base that benefits everyone and crushes information silos . A centralized database with KPI findings helps employees understand what has and hasn’t worked in the past, gauge organizational trends, and avoid redundancies. 
• Tracking: Checking in on your KPIs is like a regular health check. They let you see your performance throughout the process and understand what you need to adjust to reach an end goal.

You’ll apply the SMART method a bit differently to goals versus KPIs. Here’s an example to illustrate: 

The goal: Increase the annual revenue growth rate by 10% by the end of Q4. 

The KPI: Hit 10k monthly sales for new product offerings.

And here are four ways to distinguish them from one another:

• Intention: The goal is the final outcome you wish to accomplish. The KPI is a quantifiable performance metric you choose to reach that goal. 
• Purpose: The purpose of the goal is to create a milestone you build all daily tasks and strategies around for achieving it. The purpose of the KPI is to provide insights into reaching the goal. 
• Time frame: You can aim to achieve your goal in one month or five years, whereas you should break down your KPIs into smaller, manageable time frames to allow you to analyze your insights and reframe your strategies. 
• Dependency: You define goals to support the organization’s larger mission and vision , and you define KPIs to support these objectives. 

Here are three steps for choosing the right KPIs to help you focus on your goals :

• Define the situation: Identify the challenge and build a realistic goal , like “Increase sales by 25% by the end of Q1.”
• Choose SMART KPIs: Based on your objective, determine the necessary measurements to track progress. You might analyze customer conversion and bounce rates on your e-commerce website, social media engagement with target audiences, and click-through rates from social media to online stores. 
• Build a work plan: Share and document everything in a comprehensive work plan . Schedule regular check-ins to evaluate progress and decide whether to change your plan. 

Here are sixteen strategic KPI examples to get you started. 

Sales objectives

The goal: Increase the annual revenue growth rate by 10% by the end of Q4 by expanding product offerings and increasing the customer base in existing markets.

• Increase customer engagement across the web and social media by 100%
• Hit 10k in total sales for new product offerings
• Increase sales conversion rates across the web and social media by 45%
• Lower average customer acquisition cost by 10%

Customer retention

The goal: Achieve a customer satisfaction score of 90% or more by the end of the quarter by improving customer service response times and offering personalized solutions to customers. 

5. Lower average customer service response times from five to two minutes

6. Lower average turn-around time for creating personalized customer solutions from 30 to 15 minutes

7. Increase qualified lead-to-client conversion rates by 35%

8. Lower the number of support ticket escalations by 45%

Website traffic

The goal: Increase website traffic by 20% by the end of the next quarter by implementing an effective search engine optimization (SEO) strategy and improving your social media presence.

9. Optimize 80% of web content by end of year

10. Train 100% of the marketing and sales team in SEO optimization

11. Increase target audience engagement by 45%

12. Reach 3k new social media followers

Employee retention

The goal: Increase the life cycle of an employee from three to five years and improve employee satisfaction rates by 80% by improving benefits and company culture.

13. Decrease overtime hours by 60%

14. Increase the percentage of perks employees use by 45%

15. Decrease revision times from managers on team projects by 35%

16. Receive employee feedback scorecards from 100% by the second quarter

Clear and purposeful SMART KPIs help you perform more effectively, imagine smarter and more attainable objectives, and track progress in ways that encourage collaboration between you and your coworkers.

Now that you understand the power of building measurable frameworks to achieve business objectives, you can change your goal-setting strategies and perform to your best ability.

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Madeline is a writer, communicator, and storyteller who is passionate about using words to help drive positive change. She holds a bachelor's in English Creative Writing and Communication Studies and lives in Denver, Colorado. In her spare time, she's usually somewhere outside (preferably in the mountains) — and enjoys poetry and fiction.

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KPIs: Best Practices to Set Up, Measure, and Track Them Effectively

Ted Jackson

Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.

Implement best practices for setting up, measuring, and tracking KPIs to achieve your business goals & objectives. Contact us for more information!

Table of Contents

Key Performance Indicators, or KPIs, are a much talked-about but frequently underutilized business tool; few companies implement them with the level of rigor required to produce good results. Choosing the right KPIs and implementing a KPI tracking process requires dedication and commitment on everyone’s part.

We put together this guide to help organizations like yours get more out of their KPIs. Here you’ll learn the best ways to create and track them and understand how to gauge their relevance over time. By following the guidance presented here, you can rest assured you’re measuring and tracking the right things for your business—and doing it in the most efficient way possible.

What Are Key Performance Indicators (KPIs)? A Definition

You’ve heard it before: “What gets measured gets managed.” Nowadays, companies can (and do) measure almost everything in an effort to somehow manage it all. But most are so inundated with data about their business activities and performance that they fail to see the forest for the trees.

In fact, all data points tell the story of your business, but only a few are crucial for understanding performance. Those few are the ones to concentrate on—they are the key performance indicators, or KPIs , that relate to your strategic business goals.

Here’s how we define KPIs :

Key performance indicators (KPIs) are the subset of performance indicators most critical to your business at the highest level of your organization. You use them to help measure your progress toward achieving your strategic goals.

ClearPoint Strategy provides a platform where key performance indicators can be customized and closely monitored to reflect the health and direction of your business.

See ClearPoint Strategy in action! Click here to watch a quick DEMO on the software

What distinguishes a kpi from other traditional business metrics.

You can gather data on just about any aspect of your business, but not everything you measure qualifies as a key performance indicator. KPIs have several important characteristics that differentiate them from other metrics:

• They show if the organization is accomplishing its objectives. KPIs track measures that reflect your organization’s performance, specifically as it relates to a strategic goal. Not all measures drive business performance.
• They are tied to specific business objectives. The main point of using KPIs is to ensure your organization reaches its highest-level objectives; therefore, you should link KPIs directly to strategic goals.

Some metrics are just that— metrics . Think of them as supporting characters in a play. They may measure progress in a certain area—for example, your product return rate. Those metrics impart useful information, and improvement in that area may help you achieve a larger objective. But metrics alone don’t drive performance as a company.

Though they are different, KPIs and metrics are interrelated. Think of a KPI as a kind of early-warning signal for your business. If you’re not meeting a key performance indicator target, it’s a sign there’s either a strategic or operational problem that will prevent you from reaching your goal. To investigate the problem, dig deeper into other related metrics to diagnose the problem and see where you might need a course correction.

Download your FREE eBook on 68 effective financial KPIs you should use for better strategic insights

Kpis vs. metrics example.

For an example, consider X Company that sells cybersecurity software. One of the company’s strategic objectives is to educate its target audience via its website about cybersecurity threats and approaches to protecting their business systems.

In this case, here’s what its KPI and associated metrics might look like:."

KPI: Website traffic

KPI target: 50,000 visitors per month

Method for measuring: Track the number of website visits

Metrics that support the KPI:

- Time on site

- Bounce rate

- Exit rate

If X Company doesn’t meet the KPI target, it is not attracting people to its site and will have difficulty achieving its goal. To understand why this problem is occurring, the company could dig into the associated metrics for clues.

Done right, KPIs can be an incredibly useful tool for measuring performance. If you’re not seeing any value from them, it may be because the metrics you’ve chosen are not relevant to business performance, or they aren’t clearly linked to your strategy. The fact that there’s so much data available these days makes it more difficult to choose the right KPIs.

It may take some experimentation, but as you continue working with KPIs, keep these two points in mind:

#1: If you find you’re not using a particular KPI to make decisions, scrap it and look for something better. KPIs should provide insights that become the basis of strategy meeting discussions. If that’s not the case, you may not be measuring the right thing.

#2: For each of your KPIs, make sure you know what’s making them move either positively or negatively and that you have control over those levers. You may be doing multiple things that affect the KPI; you need to know which actions will have an impact.

Now that you know the definition of a KPI, let’s move on to the process of creating key performance indicators that align with your business objectives.

How To Successfully Set Up Key Performance Indicators (KPIs)

Follow the steps below to create KPIs that will provide clear signals about whether your performance is improving or not.

1. First, define your business objectives

Creating KPIs is an important part of the strategic planning process, which includes defining the organization’s goals and objectives. But you can’t create meaningful performance measures if you don’t know what you’re trying to accomplish. So first things first— determine a concrete set of objectives that express the goals your company wants to achieve in the future.

2. Ask: Do we know which activity will help us reach this goal?

This step attacks the main problem most organizations have, which is how to define key performance indicators. To start, ask yourself the question above.

If the answer is no , select a lagging indicator. Lagging indicators aren’t predictors of what is going to happen, but they do tell you what did happen. So if your goal is to increase sales but you don’t know which activity will make that happen, then simply measure “sales.” This KPI will tell you what happened for that goal over the last quarter or the last year by examining your outputs and outcomes. In the meantime, you’ll want to try different activities to see what actually does make an impact on sales.

If the answer is yes , select a leading indicator . When you do find out which activity will drive better results, select that activity as your KPI. For example, if you know sales increase when your sales team makes more outbound calls, choose “# of outbound calls” as your KPI. You’ll know that if you hit or exceed your target for outbound calls, your sales numbers will also increase. You could have more than one KPI if both are strong leading indicators.

Example: Leading Vs. Lagging Indicators In KPI Selection

Let’s continue with our X Company example, whose goal is to educate the public about cybersecurity issues via content on its website.

- If the company doesn't know which activity will increase the number of website visits, it would simply track "website visits." While tracking this KPI, the company would also experiment with ways to increase visits to see what works.

- If the company already knows that appearing on page 1 for various Google search results leads to more website visits, it could start to measure keyword page 1 rankings. In this case, the company might still track website visits as a measure but not as a key performance measure.

Leading indicator KPIs help you see progress (or setbacks) sooner, so you can act accordingly without having to wait for outcomes.

3. Make sure each KPI meets the SMART framework

Identifying the activities that have an impact on your objectives gets you closer to determining your KPIs, but an effective KPI should also be SMART:

• Specific: It should be clearly defined and not too broad.
• Measurable: It should be easily quantifiable.
• Attainable: It should be realistic to obtain.
• Realistic: It should be practical and pragmatic.
• Timely: It should be measurable on a regular—and fairly frequent—basis, for example, monthly or quarterly as opposed to annually.

Other metrics don’t have to be SMART, but KPIs should be. These criteria help you further define your KPIs, producing a more effective measure of performance.

4. Clearly define all aspects of each KPI

You have a good KPI in mind—that’s great! Before you can start using it, you need to clarify the essential information outlined below. Doing so will help you introduce and explain each KPI to the relevant parties; it will also help with tracking. We recommend using a template like the one shown below so you know you’ve covered everything.

1. Description: Write a brief description of the measure and what it should reveal.

2. Formula: Is there a calculation required to report the measure? If so, record it clearly.

3. Reporting frequency: Decide how often to report the KPI—monthly, quarterly, etc.

4. Owner: Who is the person or department that will report on the measure and performance? Accountability is crucial for follow-through.

5. Target: Note the level of performance you are trying to achieve. It should be a numerical (quantitative) target.

5. Get feedback from your team about each KPI

We’ve seen it happen too often: When presented with KPI data in strategy meetings , attendees spend too much time trying to figure out what the data means and why they’re collecting it, instead of making decisions based on the data. What could have been a productive strategy meeting turns into an information session on KPIs.

All it takes is a little bit of planning to prevent this scenario. Talk to your team about each KPI ahead of time. Find out what questions people have about the data and include the answers in the KPI descriptions. If a formula is involved, write it out in a way that’s easy to understand. Incorporate any suggestions they have into the defining list when appropriate. Then, at the meeting, you can talk about strategy instead.

Think you’ve developed some meaningful measures? Great! Now it’s time to find out how well your organization—and your KPIs—are performing.

Setting up effective KPIs involves defining clear business objectives, which ClearPoint Strategy facilitates through its strategic planning capabilities. Our software allows you to:

• Define and align KPIs directly with strategic goals.
• Automate data collection and reporting to streamline the process.
• Evaluate KPI performance using real-time dashboards that provide insights into your organization's operational efficiency.

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Key performance indicators (kpis) measurement & tracking.

The KPI process doesn’t end once you’ve set the measures; next, you need to gauge their performance. That requires tracking them effectively and knowing when it’s time to replace them.

Tracking KPIs The Right Way

It’s necessary to continually review and track your KPIs and their performance on a monthly, quarterly, or other predefined reporting frequency. Regular monitoring makes it easy to see the time frame in which something may have underperformed or overperformed, as well as what may have happened within this period to cause the change.

Here are the steps involved in setting up a reporting system:

• Identify your data source(s). Where is the data for the KPI coming from? For X Company’s website example, it might be Google Analytics and/or HubSpot. For customer data, it might be Salesforce. For revenue data, it’s your company accounting software. The source will be key to the KPI tracking workflow.
• Define your reporting frequency. Decide how often you should track your KPI. It depends on the availability of the data and how frequently it becomes available. It’s also useful to consider how the data helps you make decisions.

For example, X Company may want to track website visits monthly so it knows if enough people are coming to the site for the sales team to source leads from. If the KPI target is falling short, the company will need to find another way to provide leads to the sales team that month. On the other hand, it may want to track the KPI quarterly because the number of website visitors can be extremely volatile depending on the month. As long as the KPI goes up quarter by quarter, there’s probably no need for a strategy change.

• Create your calculations. Build out your calculations in the system you’ll be using to track KPIs. Some organizations use spreadsheets to track KPIs; others use strategy reporting software to ease the burden of reporting and help them gain better insights from the data.
• Decide on your evaluations. You need a way to quickly and expertly evaluate whether you’re meeting your goals, which is where evaluation status signals are useful. RAG—or red, amber, green—statuses act as a KPI traffic light: Red is an alert; amber signals caution, and green means you’re on track. Consider the target levels you want for your KPIs. One example scenario: If a KPI is within 20% of your target, it might be considered yellow; below 20%, it's red; above that, it’s green. Regardless of what you decide, you also need to think about whether your target will change from one quarter to the next or if it will stay the same.
• Build your chart. Charts are useful for visualizing data, making it easy to see trends, progression over time, target vs. actual performance, industry benchmarks, etc. Figure out the appropriate visualization for your data and how to construct it to highlight the information you want to convey.

With ClearPoint Strategy , you can visualize data through customized dashboards that help elucidate trends and pinpoint areas requiring attention. Our software supports decision-making by providing actionable insights and timely data.

See ClearPoint Strategy in action! Click here to watch our quick 6-minute demo

How strategy reporting software like clearpoint strategy simplifies kpi tracking.

For KPI and strategy reporting, consider leveraging an advanced performance management software like ClearPoint Strategy . While the time you'll save in tracking and reporting alone is well worth the investment (some of our customers reduced the time they spent gathering and reporting data by 89%!), another extremely useful feature of our software is its ability to link KPIs to organizational objectives. Ultimately, that makes it easier to evaluate whether you're using the right KPIs.

Before switching to ClearPoint, one healthcare organization was tracking KPIs in Excel. Keeping track of the key measures for each department and physician required manually copying and pasting data from various systems into +400 Excel spreadsheets that included complex calculations to produce a total "score". The organization found it difficult to get a handle on its overall performance–and challenging to gain any insights from the spreadsheet alone.

Now that they're using ClearPoint, leaders can easily see ho the organization is tracking on a set of standar measures, and compare the performance or physicians and departments. Different departments upload data monthly, and LPI dashboards are shared on the intranet for all employees to see. Individual physicials receive their own scorecards every month. And strategy meetings are now simpler and more focused because it has replaced the Excel spreadsheets with easy-to-read briefing books summarizing the most important information leaders need to know. That's the power of ClearPoint Strategy KPI tracking!

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Kpi tracking: using dashboards.

A KPI dashboard consolidates all your KPIs in one place for easy viewing and decision-making. With a KPI dashboard, you can quickly identify which metrics have fallen below target and which ones are trending upwards. It provides a holistic view of all your metrics, so you can move forward with the quantitative information you need to decide what's next. In ClearPoint, KPI dashboards automatically update as you update the data sources, saving you time and effort.

You can create any type of KPI dashboard that suits your needs; below are three examples of KPI dashboards that are especially useful.

Red Measures Dashboard

A red measures dashboard focuses on poorly performing metrics, making it easy to identify and address lagging KPIs.

KPI Dashboard Template

A KPI dashboard template visualizes the performance of an organization's metrics over time. These dashboards typically include indicators to specify the red, yellow, or green status of each measure; adding qualitative fields to your KPI dashboards is a great way to add more context alongside these indicators.

Trend Dashboard Template

Trend dashboard templates visually display trends in metrics over time, making it easy to identify problematic periods and dig deeper to address their potential causes.

Conducting Your First Strategy Review Meeting

The most important part of the KPI process is actually using them in the way they were intended—to help drive business decisions. The strategy meeting is when your team will analyze these key performance indicators to determine how well your company is meeting goals. To conduct a productive strategy meeting that encourages discussion around KPI progress:

• Have your team add qualitative analysis to all your KPIs. Numerical data can be hard to interpret when presented on its own. Present qualitative data as well to provide additional context. Ideas, explanations, and hypotheses help readers get an in-depth understanding of the factors that may be influencing the data.
• Send a report with KPIs in advance so your team can review them. If everyone comes to the meeting prepared, it will allow for a more efficient use of time.
• If people have questions about the KPI, update the definition and formula so they are clear to everyone. This will help prevent the same questions from popping up again in the next meeting.
• Update the chart to show the information you need. Make sure it highlights the information attendees need to know and includes the most current data available.
• Ask: Do these KPIs help us determine if we’re making progress on our goals? Use your meeting to reassess your performance measures. Which measures are working well and should be kept? Which ones should you drop or replace because they aren’t really telling you how the objective is doing? If the KPI doesn’t seem to be a good indicator after all, it may be time to go back to the drawing board.

Get your FREE eBook on 142 important KPIs for local governments here

When is it time to retire/change a kpi.

Because the goals and circumstances of your business are always changing, your KPIs should change as well. How do you know when it’s time to make a change? Things that should trigger a reevaluation of your KPIs include:

• When you’ve completed an objective
• When you have another KPI for your objective that helps you better make decisions
• When your KPI doesn’t lead to decisions
• When your initiatives change (and therefore the way you track progress toward your objective should change)

3 Key Performance Indicator (KPI) Best Practices

Organizations that are serious about using KPIs to reach their strategic goals tend to be high-performers. If you’re hoping to become part of that group, remember these three best practices as you design and deploy your own KPI framework:

1. Choose the minimum number of KPIs necessary to achieve your objectives

Few metrics actually have the potential to make a major difference in performance, but it’s easy to get carried away by the overabundance of data. In one MIT study, executives were asked how many of the KPIs they oversee required most of their attention; a majority of respondents said just two or three. Many organizations choose too many KPIs and then waste resources trying to keep up with them. Be stingy and stick to the best measures—the ones that directly contribute to your objectives. We recommend only tracking a few—one to two KPIs per objective.

You can (and should) track other data, but separate those measures from your KPIs. That data will be helpful if you need to dive into the underlying components that make up a KPI.

2. Use a tool that does most of the work for you

Today, there’s simply no need to spend time cutting and pasting data from various sources into Excel or spending a full week per month generating KPI reports in PowerPoint. When companies have to expend that much effort to track KPIs, they eventually abandon the effort altogether. Technology has made it easier to manage KPIs every step of the way, from data-gathering to analysis to presentation. As one of the leading strategy reporting platforms, ClearPoint has automated 70% of the reporting process. Not only does automation save time, but it also makes your reports more accurate, and useful for your audience.

3. Create a culture of KPI monitoring & improvement

If you want to embrace the idea of KPI monitoring, reporting, and improvement, your people will have to embrace it, too. There’s no “right” way to get people on board, but if you’re transparent about your actions and maintain open lines of communication, your efforts are more likely to succeed. Include your team in the KPI process by asking for their feedback and answering their questions. Create clear accountability for specific data points, including how data is acquired, how it’s reported, and who can speak to what occurred during that reporting period. Also, make sure the levers that drive each KPI are fully controllable by your team, or there will be little motivation to improve.

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Make the most of your kpis.

There’s no question that KPIs can have a positive impact on your organization, but it does take time and dedication to use them effectively. And while we’ve emphasized the importance of choosing the “right” KPIs, keep in mind that, no matter how long you’ve been doing it, this is something of an experimental process. With experience and practice, you’ll start to gain better visibility into performance and more easily make the strategic decisions that will take your business in the right direction.

ClearPoint Strategy simplifies this integration, ensuring that KPIs contribute effectively to strategic discussions and decision-making processes.

If you have more questions about how to use KPIs, or about how ClearPoint might work for your organization, please reach out—we’re here to help!

Discover the Power of Effective KPI Management with ClearPoint Strategy Software

Take the first step towards mastering your business performance metrics with ClearPoint Strategy. Our software simplifies the creation, tracking, and analysis of KPIs, ensuring your strategic goals are met with precision and ease. Don't miss out on the opportunity to see ClearPoint Strategy in action— book a demo today!

Book your FREE 1-on-1 DEMO with ClearPoint Strategy

What are kpis.

Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively an organization is achieving its key business objectives. They provide a way to track progress, assess performance, and make data-driven decisions. KPIs can be financial, such as revenue growth, or non-financial, such as customer satisfaction.

How do you set up good KPIs?

To set up good KPIs:

- Align with Goals: Ensure KPIs are directly linked to your organization’s strategic objectives. - Use SMART Criteria: Make KPIs Specific, Measurable, Achievable, Relevant, and Time-bound. - Involve Stakeholders: Engage key stakeholders in the KPI-setting process to ensure buy-in and relevance. - Limit Number: Focus on a few critical KPIs to avoid information overload and maintain focus. - Define Clear Metrics: Establish clear definitions and methods for calculating each KPI. - Set Benchmarks: Determine target values or benchmarks for each KPI to measure success.

What is an example of a KPI?

An example of a KPI is "Customer Satisfaction Score (CSAT)." This KPI measures the level of customer satisfaction with a product or service. For instance, a company might aim to achieve a CSAT score of 90% or higher by the end of the year, indicating high customer satisfaction.

How do you measure KPIs effectively?

To measure KPIs effectively:

- Collect Relevant Data: Gather accurate and timely data related to each KPI. - Use Appropriate Tools: Utilize software and tools such as dashboards, analytics platforms, and reporting systems to track and visualize KPIs. - Regular Monitoring: Continuously monitor KPIs to track progress and identify trends. - Compare to Benchmarks: Measure KPI performance against predefined targets or industry standards. - Analyze Results: Perform regular analysis to understand underlying factors affecting KPI performance. - Adjust Strategies: Use insights from KPI measurements to make informed adjustments to strategies and operations.

How can KPIs be used to improve the performance of an organization?

KPIs can improve the performance of an organization by:

- Providing Focus: KPIs help prioritize efforts and resources toward achieving strategic goals. - Enhancing Accountability: Clear KPIs hold individuals and teams accountable for their performance. - Facilitating Decision-Making: Data-driven insights from KPIs support informed decision-making. - Identifying Improvement Areas: KPIs highlight areas needing improvement, enabling targeted actions. - Motivating Employees: Clear performance targets can motivate employees to achieve high standards. - Tracking Progress: KPIs provide a continuous feedback loop to monitor progress and adjust strategies as needed.

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Home > KPI Examples – The 50 Best KPIs for Growing Businesses

KPI Examples – The 50 Best KPIs for Growing Businesses

Key Performance Indicators are one of the most widely used methods for measuring and monitoring performance.

We cover how they can be applied to your situation and also feature a few kpi examples to review and download., what are key performance indicators (kpis).

KPIs are a set of values which are used to measure the key “drivers” of a business’ performance. KPIs will usually comprise both financial & non-financial values and should be S.M.A.R.T (a term coined by the management theorist Peter Drucker);

Specific – a specific bounded area of interest Measurable – able to be measured objectively, reliably and quantitatively Attainable – able to be met given the business circumstances Realistic – reasonable given the business’ resources Time-bounded – a specific time period for achievement

KPI suggestions

• KPIs should be aligned to the key drivers of performance of the business – in other words they must be relevant.
• Don’t have too many KPIs to measure and monitor – it’s better to have a smaller number to ensure accuracy and focus – 5 to 8 KPIs should be sufficient.
• KPIs need to be supported by robust, accurate and timely measurement and reporting processes.
• KPIs must be tailored to the type of business – performance drivers of a services business are very different to a manufacturing business for example.
• KPIs should address as many aspects of the business as possible – a common mistake is to focus solely on bottom line financial measures.
• It is often the trend in KPIs which gives the most valuable information rather than an absolute number.

KPIs do not tell the whole performance story as some aspects of performance cannot be readily expressed in qualitative terms (such as business culture or social & environmental initiatives). So its wise to not take KPIs as the complete measure of business success.

KPI Examples

Financial kpis.

Financial KPIs focus of course on financial performance and are routinely measured and reported.

• Net Profit (Sales less Cost of Sales less Expenses – $ and %)
• Ratios – Cost of Sales (Cost of Sales / Sales), Gross Profit margin (Gross Profit / Sales), Net Profit margin
• Trends –month-to-month movement in KPIs
• Gross Sales ($ and %)
• Average sale value $
• Sales Pipeline – proposals, quotations, orders in progress etc
• Returns and refunds ($ and %)

Customer KPI Examples

• # of customers,
• Movement in customer numbers (# and %)
• Customer retention (# of customers lost / total customers)
• Lifetime customer value
• Customer satisfaction scores (eg Net Promoter Score)

Employee KPI Examples

• Employee / sales ratio (employee expense / gross sales)
• Staff satisfaction (measured via quantitative surveys)
• Staff turnover (leaving staff / total staff)

Product or process efficiency metrics

• Rate of production (# or volume of units / time)
• Rate of defects (#, % defects / Volume)
• Cycle times

For a more extensive list of KPI Examples, please download the full list here .

Using your KPIs

In addition to being widely used by inside management, KPIs have many other uses. When combined with infographics, KPIs can be a powerful reporting and communications tool.

Investor reporting

Although not a statutory requirement, many enterprises include reporting of KPIs as part of “best practice” investor reporting (including in public company Annual Reports). This type of reporting can provide valuable insights into the enterprise which may not be evident from statutory disclosures.

KPIs can be used as the basis for dashboards to provide a focused “one-page” view of performance. Regular dashboard reports help the founder keep an effective finger on the pulse of the business.

Benchmarking

KPIs are often used as the basis for benchmarking or performance studies versus peers and competitors.

Properly constructed KPIs are a powerful tool for understanding and monitoring performance and for that reason are used extensively within (probably) the majority of enterprises globally. If you need help with constructing & reporting on your KPIs, reach out to the seasoned team at Fullstack whom can help with outsourced CFO services .

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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.

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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. They can also be used to judge progress or achievements against a set of benchmarks or past performance.

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.

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Understanding Key Performance Indicators (KPIs)

Key performance indicators are used in business to judge performance and progress toward specific, measurable goals. They may be compared to:

• A predetermined benchmark
• Other competitors within the industry
• The performance of the business over time

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 KPI data is gathered and compared to whatever target has been set. The results of that comparison then are analyzed and used to draw conclusions about how well current systems, or recent changes to those systems, are working to achieve the department or business's goals. This lets management know whether the current systems are effective or whether to make changes to improve those outcomes and meet future goals.

The goal of KPIs is to communicate results succinctly to allow management to make more informed strategic decisions. They are often measured using analytics software and reporting tools.

The information from key performance indicators may be financial or nonfinancial and may relate to any department across a company, or the performance of the business as a whole.

Companies can use KPIs across three broad levels.

Company-wide KPIs focus on the overall business health and performance. These types of KPIs are useful for informing management of how operations stand in the company as a whole. 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.

Department-level KPIs are more specific than company-wide KPIs and often provide information on why specific outcomes are occurring. Companies often dig into department-level KPIs to better understand the results of company-wide KPIs. For example, if overall revenue is down, a company may want to look at customer conversion or satisfaction rates in specific departments.

Project or Sub-Department

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

Common Types of of Key Performance Indicators

Most KPIs fall into four broad categories. Each category has its own characteristics, time frame, and level of business that is likely to use it. Different KPIs may also be used by different departments within the same business.

Strategic KPIs are usually the most high-level. These types of KPIs may indicate how a company is doing, although they don't provide much information beyond a high-level snapshot.

Executives are most likely to use strategic KPIs. Examples include return on investment , profit margin , and total company revenue .

Operational

Operational KPIs are focused on a tight time frame. These KPIs measure how a company is doing month over month, or sometimes day over day, by analyzing different processes, segments, or geographical locations.

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, a finance department may keep track of how many new vendors they register within their accounting information system each month. A marketing department measures how many clicks each email distribution receives.

These types of KPIs may be strategic or operational. What sets them apart is that they provide the greatest value to one specific set of users.

Leading/Lagging

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. Leading KPIs indicate a change that is coming in the future. Lagging KPIs indicate a change that has already happened.

Examples of these are 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.

Financial Metrics

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 : KPIs that measure how well a company will manage short-term debt obligations based on the short-term assets it has on hand. Also known as current ratios , which divide current assets by current liabilities.
• Profitability ratios : KPIs that measure how well a company is performing in generating sales while keeping expenses low. An example is the net profit margin.
• Solvency ratios : KPIs that measure the long-term financial health of a company by evaluating how well a company will be able to pay long-term debt. An example is the total debt-to-total-assets ratio .
• Turnover ratios : KPIs that 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

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 : Counts customer service requests and measures how many new and open issues customers are having.
• Number of resolved tickets : 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 : 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 : 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 : 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 : 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 : Many companies may perform surveys or post-interaction questionnaires to gather additional information on the customer’s experience, though this is a vague and imprecise measurement.

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

Process Performance Metrics

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 or improvements to be made.

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 : Often measured as the production time for each stage divided by the total processing time. For example, a company may strive to spend only 2% of its time soliciting raw materials. If it discovers it takes 5% of the total process, the company knows that area needs to be improved.
• Total cycle time : 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 an extended period.
• Throughput : The number of units produced divided by the production time per unit, measuring how fast the manufacturing process is.
• Error rate : The total number of errors divided by the total number of units produced. A company striving to reduce waste can use this metric to understand the number of items that are failing quality control testing.
• Quality rate : A measure of the items produced that pass quality control checks. 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 Metrics

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

• Website traffic : 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 whether or not customers are being funneled appropriately.
• Social media traffic : 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 : Measures how well promotional programs convert customers to perform certain actions, such as a campaign to encourage purchases during a sale. A company can divide the number of successful engagements by the total number of content distributions to understand what percentage of customers answered the call to action.
• Articles published : The number of blog posts or print articles a company publishes in a given timeframe, such as a month or a quarter.
• Click-through rates : The number of specific clicks that are performed on email distributions. Programs may track how many customers opened an email, how many opened the email and clicked on a link, and how many clicked on the link and followed through with a sale.

Any department within a company can be improved to increase efficiency and employee satisfaction. This includes how the internal technology (IT) department is operating. These KPIs can indicate whether the IT department is adequately staffed. Examples of IT KPIs include:

• Total system downtime : 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, which can slow operations and harm customer service.
• Number of tickets/resolutions : The resolution of tickets related to internal staff requests such as hardware or software needs, network problems, or other internal technology problems. This is similar to customer service KPIs.
• Number of developed features : Quantifying the number of product changes to internal software or systems in order to measure internal product development.
• Count of critical bugs : The number of critical problems within systems or programs. A company will need to have internal standards for what constitutes a minor vs. major bug.
• Back-up frequency : How often critical data is duplicated and stored in a safe location. Management may set different targets for different bits of information depending on record retention requirements.

Sales Metrics

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) : The total amount of money that a customer is expected to spend on your products over the entire business relationship.
• Customer acquisition cost (CAC) : 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 : The average size of new agreements. A company may have a desired threshold for landing larger or smaller customers.
• Average conversion time : The amount of time from first contacting a prospective client to securing a signed contract to perform business.
• Number of engaged leads : How many potential leads have been contacted. This metric can be further divided into mediums such as visits, emails, phone calls, meetings, 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 Metrics

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

• Absenteeism rate : How many dates per year or specific period employees are calling out or missing shifts. This KPI may be a leading indicator for disengaged or unhappy employees. It can also help managers plan for seasonal staffing variation, such as times of year when employees are more likely to be sick.
• Number of overtime hours worked : The number of overtime hours worked to gauge whether employees are potentially facing burnout or if staffing levels are appropriate.
• Employee satisfaction : A gauge of how employees are feeling about various aspects of the company, often performed via survey. To get the best value from this KPI, companies should consider using the same survey questions every year to track changes from one year to the next.
• Employee turnover rate : 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 : 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.

How to Create a KPI Report

It can be difficult to sort through the vast quantities of information collected by a company and determine which KPIs are most useful and impactful for decision-making. When beginning the process of pulling together KPI dashboards or reports, consider the following steps:

• Establish goals and intentions . KPIs are only as useful as the users make them. Before pulling together any KPI reports, establish specific goals, then pick the KPIs that will inform achieving those goals.
• Draft SMART KPI requirements . Vague, hard-to-ascertain, and unrealistic KPIs serve little to no value. Instead, focus on what information you have that is available and SMART (specific, measurable, attainable, realistic, and time-bound).
• 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 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. Create separate reports if necessary, each focusing on a specific problem or goal.

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).

Advantages of Key Performance Indicators

A company may wish to analyze KPIs for several reasons.

• Encourage actionable goals : Tracking and analyzing KPIs effectively requires knowing what you are trying to achieve. This can encourage businesses to set specific, actionable goals and create systems that help meet those goals, rather than creating systems without knowing what purpose they serve.
• Data-driven solutions : KPIs help inform management of specific problems and find solutions for them. The data-driven approach provides quantifiable information useful in strategic planning and ensuring operational excellence.
• Improve accountability : 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.
• Measure progress : KPIs connect business goals to actual operations. A company may set targets, but without the ability to track progress toward those goals, there is little to no purpose in those plans. KPIs allow companies to set objectives, and then monitor progress toward those objectives.

Limitations of Key Performance Indicators

There are some downsides to consider when working with KPIs.

• Time commitment : 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.
• Require regular follow-up : 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.
• Subject to manipulation : 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 .
• Risk of incentivizing wrongly : If management seems to care more about numbers than actual results, quality may decrease as managers are hyper-focused on productivity KPIs. Employees also may feel pushed too hard to meet specific KPI measurements that may not be reasonable.

Encourage actionable goals

Data-driven solutions

Improve accountability

Measure progress

Time commitment

Require regular follow-up

Subject to manipulation

Risk of incentivizing wrongly

What Does KPI Mean?

A KPI is a key performance indicator: data that has been collected, analyzed, and summarized to help decision-making in a business. 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, by comparing KPIs to set benchmarks, such as internal targets or the performance of a competitor, 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. Five KPIs that are commonly used across a variety of business are:

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

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 informed decisions.

Key performance indicators are metrics that businesses track and analyze to understand performance and meet actionable goals. Commonly used KPIs include financial, customer service, process, sales, and marketing 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.

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What is a KPI ?

Key Performance Indicators (KPIs) is a measure of how your teams are performing to meet the overall business goals and objectives. KPIs can be used to track the performance of the different functions within an organization as well as individual team members. Do you like to know the difference between KPI vs Metrics, read here.

Other Definitions of KPI

Hubspot : “A KPI is a key performance indicator that measures how your company is performing at achieving a certain goal or objective. There are KPIs for every aspect of business, whether it's financial, marketing, sales, or operational”

Kpi.org : “Key Performance Indicators (KPIs) are the critical (key) indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.”

Clearpoint strategy : “Key Performance Indicators (KPIs) are the subset of performance indicators most critical to your business at the highest level of your organization. KPIs are used to help you measure your progress toward achieving your strategic goals.”

Why are KPIs important to hit organizational goals?

For a really long time, organizations over indexed on just two components when it came to managing teams and achieving business goals:

   1. Creating a plan

   2. Executing the plan

Teams focused on the end goal, went about executing their tasks, and finally the big end of the quarter meetings was when the leaders discovered if they managed to hit the numbers - depending upon which the next set of action items were planned.

However, this process often left teams blindsided where a lot of effort is invested but without the desired result - by the time the leaders became aware of the situation, it was already too late to course correct.

Then in the early 90s, Peter Drucker came up with the concept of performance indicators which would give organizations a better way to understand the progress teams make on key business goals on a regular basis instead of learning it right at the end.

Importance of KPIs

Making key business decisions.

‍ One of the important reasons to define organizational KPIs is it gives you a crystal clear picture on how different functions within the company are performing and if they are aligned toward the overall company goal.

Having a clear grasp on the KPIs allows you to make important big picture decisions - whether it is creating product roadmaps, deciding on the marketing budget, making new hires that is reflective of the current state of the company.

For example, say your customer support KPIs show that it takes more time to close tickets than you’d like, perhaps it is the cue for you to add one more person to the CS team. ‍ Rewarding Team Members Defining KPIs sheds light on the team performance and in the process acknowledging significant individual contributions and even rewarding their performances.

It not only boosts employee morale but it also motivates the entire team to perform better.

How would it feel to be able to see how your SaaS business is performing in real-time? See how live KPI dashboards give you visual feedback on multiple metrics that helps you take data-driven decisions. Identifying outliers When it comes to defining KPIs, one of the lesser emphasized aspects is how KPIs allow you to surface business outliers and take the right course of action, which wouldn’t be possible if not for the regular tracking.

Seeing the right KPIs or sometimes a combination of different KPIs in a single dashboard gives you insights and patterns on organizational functions that you couldn’t have possibly found on their own.

For example, say your Marketing KPIs reveal a lot of lead conversations around a particular feature before they convert, yet your Product KPI suggests that the same customers are not actually using that feature - it is a sign of whether you want to consider working on that feature in the next product roadmap.

Likewise, if your Google Ads account is not performing at the level you want, it's time to take a deeper look at which KPI you should be measuring and optimizing.

Different types of KPIs

There are many types of KPIs that you can use in your business. Some KPIs are high level, others are low level within an organization. The common thread is that all of these are objectives and you should use the ones that make most sense for your business strategy, some of the most common categories are,

Qualitative KPI or Quantitative KPIs

A quantitative KPI is a measurable characteristic, really anything that involves numbers. This is the most common type of KPI and covers many things for instance like users , impressions , sessions and so on.

Qualitative KPI

Whereas qualitative KPI is a descriptive characteristic, something like employee satisfaction.

Operational KPI

Operational Key Performance Indicator (KPI) evaluates the efficiency of its day-to-day operations within an organization. These KPI helps management identify which strategies are effective. Examples for operational KPIs are cost per conversion , Lead conversion ratio, cost per acquisition etc.

Every SaaS growth team should measure these Sales KPIs to stay on top of the game. If you use Pipedrive, then these KPIs will be of great value to your sales team .

Strategic KPI

Strategic KPIs are more about monitoring progress or trends toward a stated destination, and focus on more long-term, big-picture goals within an organization like customer acquisition cost.

Leading KPI

A leading KPI measures performance before the business or process follows  a pattern or trend, this can be used for future prediction.

Lagging KPI

A lagging KPI measures performance after the business or process follows a pattern or trend, such as annual sales for the previous year.

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Kpis vs. metrics: what is the difference.

You know what KPIs are and why they are crucial to your organization’s overall growth -  but before starting to define KPIs, you wanted to do your research and noticed that there was one particular term that popped up more than anything anytime someone talked about KPIs - Metrics! The simplest difference between KPIs and Metrics is KPIs are a measure of your teams’ performance across functions at an organizational level while Metrics are a measure of smaller individual activities rolled out within functions.  Read More: The Complete KPI vs Metric Definitions and Measurement Guide.

Defining KPIs for your company

1. Describe the actionable end result you want to achieve 2. Have a specific timeframe   3. Set Performance thresholds ‍ ‍

Set a concrete goal

The first step in defining KPIs is setting a concrete goal you want to achieve at the end of the specified time frame. This goal is also known as the North Star Metric for your organization - the single number that every team and individual in the organization is working to improve. For example, in Facebook’s early days the company’s goal was as simple as getting users to add 7 friends in their Facebook account. Once they knew this was the number they were going after every activity they did across engineering, product, and marketing was closely tied to achieve that goal.

‍ North Star Metrics: Popular Examples If you are a product company, here are examples of North Star Metrics defined by some of the most popular SaaS companies:

Note: When defining your North Star, ensure that it’s a tangible and specific number that is directly tied to what your product does instead of business goals like revenue or customers. ‍

Have a specific timeframe  

When setting KPIs it is crucial to have a specific time period during which you will track the performance of your teams. Without this you will not be able to accurately gauge how the numbers are improving . For example, if your KPIs are tied to say, the number of weekly active users which you’ve set as your North Star, you need to know how the timeframe it takes to move the needle on that number. Say, your weekly active users continue to rise steadily, but it takes twice the time than what you expected, would you consider that as a win? Definitely not! That is why it is important to always have a specific time frame when tracking KPIs. An ideal time period to track your KPIs can be somewhere between 3 and 6 months depending on your demographics.

Set Performance thresholds

Performance thresholds are organizational benchmarks you set when measuring KPIs -  it includes defining numbers for what is an ideal performance or what constitutes a good or bad performance. Talking about C-suite leaders, they spend much of their time on metrics to gauge how well their teams are faring. The question is: which key performance indicators will they prioritize while they have so much on thier plate? Having clear thresholds makes it easy for you to review the performance of the team as well as individual members and even set up incentives like rewards for crushing the numbers.

Mistakes to avoid when tracking KPIs

1. Measuring what you want to see One of the biggest blindspots teams fall in when it comes to KPIs is measuring what is easy and convenient - or worst, measuring numbers that they know will make for a good show in front of the team. Keep in mind that the purpose of KPIs is to measure the team’s performance holistically - sometimes that means talking about KPIs where the team didn’t hit its goals or ignoring KPIs where you flourished but it does not tie down to what you want to achieve. When it comes to KPIs, it is better to be ruthless than be sorry.

Are you making these mistakes when setting KPI, for your GTM teams? 2. Measuring Everything When tracking KPIs, teams often tend to err on the side of information overload, filling up the spreadsheets with lots and lots of KPIs just because they are to measure - this is where you should exercise great caution because sometimes even no information is better than irrelevant information. Make sure that you narrow down your objectives to a handful of KPIs that tell you how well you performed.

Read more about tracking basic KPIs in your GTM dashboard

‍ 3. Having KPIs that are not tied to your North Star Metric KPIs are a handful of numbers that exactly tell where your teams are with respect to your goals - and any number that does not directly help you in understanding where you stand have no business on your KPI dashboard. Having KPIs that don't impact your North Star is a big waste of time and resources which could be utilized working on the right KPIs instead. In order to be super organized, look for a good Data visualization tool that helps to represent data in an actionable way. There are a plethora of data visualization alternatives in the market today with the help of which you can take smart data-driven decisions. Ready to track and measure your KPIs? Check out how Dataflo supercharges your team when it comes to KPIs.

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KPI Examples and Templates

This resource provides visual KPI examples and templates for key departments such as Sales, Marketing, Accounting, Supply Chain, Call Centers and more

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A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs to evaluate their success at reaching targets. Selecting the right KPIs will depend on your industry and which part of the business you are looking to track

Once you’ve selected your key business metrics, you will want to track them in a real-time reporting tool. KPI management can be done using dashboard reporting software, giving your entire organization insights into your current performance. Learn more about how to track KPIs in a report or dashboard .

KPI Dashboard Templates & Examples

To be useful, key performance indicators need to be monitored and reported on; if they change in real-time, they should be monitored in real-time. KPI Dashboards are the perfect tool for your performance tracking reports as they can be used to visually depict the performance of an enterprise, a specific department, or a key business operation.

Here are some KPI examples to demonstrate how you can present key performance indicators to your team in dashboards and reports:

Executive Dashboard Dashboards

Executive dashboards provide a powerful way to monitor your business performance. Discover why 12,000+ customers rely on us to make better decisions.

Marketing Dashboards Dashboards

How do you track your marketing performance? Browse countless dashboard examples for digital marketing, social media, content marketing, PPC, and SEO.

SaaS Dashboards Dashboards

SaaS (Software as a Service) businesses operate in a fiercely competitive market. A SaaS Dashboard organizes key SaaS metrics from sales, marketing, finance, support, and development teams to give executives a bird’s-eye view of the business.

Sales Dashboards Dashboards

Sales teams operate in a fast-paced, target-oriented environment. Modern, data-driven sales teams closely monitor individual and team performance to adjust and improve strategies in real time.

Social Media Dashboards Dashboards

A social media monitoring dashboard displays all of your metrics in a single view. Use your social media metrics to shape your marketing strategy, engage with your audience, increase your conversion rates, and generate revenue.

Business Dashboards Dashboards

Monitor the health of your business in real-time.

Supply Chain Dashboards Dashboards

A Supply Chain Dashboard is a reporting tool used to track supply chain KPIs and metrics in a single display or interface. Supply chain dashboards track inventory levels, logistics management, and warehouse operations.

Call Center Dashboards Dashboards

A call center dashboard increases the visibility of real time, business-critical metrics providing you with the information needed to respond to challenges before they become crises.

HR Dashboards Dashboards

An HR dashboard is a powerful tool for tracking HR metrics and driving strategic decisions. By creating a dashboard that meets your HR team’s needs, you can track progress efficiently and enhance HR processes.

Why Are KPIs Important?

Each department will use different KPI types to measure success based on specific business goals and targets. If you need more examples of the advantages of KPIs, here’s a quick look:

• Key Performance Indicators (KPIs) gauge the success of a business, organization, or individual in reaching specific objectives.
• The KPIs can differ based on industry, company, and personal objectives.
• Popular KPI examples include customer satisfaction, employee retention, revenue growth, and cost reduction.
• KPIs are often measured on a periodic basis, such as monthly, quarterly, or yearly.
• KPIs should possess measurable, attainable, and relevant characteristics aligned with the organization's objectives.
• Regular tracking of KPIs ensures the organization is on track to meet its goals.
• In combination with other metrics, such as financial metrics, KPIs provide a comprehensive view of performance.
• KPIs can be utilized to compare performance across different departments, teams, or individuals.
• KPIs help identify areas for improvement and set future objectives.

How to Write and Develop Key Performance Indicators

When writing or developing a KPI, you need to consider how that key performance indicator relates to a specific business outcome or objective. Key performance indicators need to be customized to your business situation and should be developed to help you achieve your goals. Follow these steps when writing one:

Write a clear objective

When setting up your KPIs, the first step is to define a clear and specific objective for each metric. This objective should align with your overall business goals and provide a roadmap for what you're trying to achieve. For example, if your business goal is to increase customer retention, your KPI objective could be "to reduce churn rate by 10% in the next quarter."

Share objectives with stakeholders

Once you've established your KPI objectives, sharing them with all relevant stakeholders is crucial. This includes not just your team members but also executives, investors, and even key customers, where appropriate. Transparency ensures everyone is on the same page and working towards the same goals.

Conduct weekly or monthly reviews

Regular review of your KPIs is essential for tracking progress and making timely adjustments. Depending on the nature of the KPI and the business cycle, reviews can be conducted weekly or monthly. Use these review sessions to analyze data, discuss challenges, and celebrate wins.

Prioritize actionable KPIs

An actionable KPI is one that provides insights that you can act upon. For instance, instead of a vague KPI like "increase brand awareness," opt for something more actionable like "increase website traffic by 15% through targeted social media advertising." This gives you a clear action path to follow to achieve your objective.

Keep KPIs flexible to suit business needs

Business needs and environments are constantly changing. Your KPIs should be flexible enough to adapt to these changes. For example, if your business has recently entered a new market, you may need to adjust your KPIs to focus on customer acquisition rather than retention.

Set realistic targets but add stretch goals

While your KPIs should be challenging, they also need to be attainable to keep your team motivated. Always cross-reference your KPIs with historical data and current capabilities to ensure they are realistic. Additionally, consider adding a "stretch goal" that goes beyond the primary objective to encourage exceptional performance.

Harness the power of data-driven decision making.

Update your objectives as needed

As you review your KPIs, there may be instances where objectives need to be updated. This could be due to a change in business strategy, market conditions, or internal capabilities. Regular updates ensure that your KPIs remain relevant and aligned with your current business goals.

Key Performance Indicators Best Practices

Measuring and monitoring business performance is critical, but focusing on the wrong key performance indicators can be detrimental. So can be poorly structured ones or ones that are too difficult, costly to obtain, or to monitor on a regular basis.

So what makes business performance indicators “key,” and how should a business owner, executive, or manager select them? There are six factors that separate effective, value-creating key performance indicators from detrimental, value-diminishing ones. Follow these six best practices:

• Aligned: Make sure they align with the strategic goals and objectives of your organization
• Attainable: The indicators you choose to measure should have data that can be easily obtained
• Acute: They should keep everyone on the same page and moving in the same direction
• Accurate: The data flowing into the performance indicators should be reliable and accurate
• Actionable: Does each one give you insight into the business that is actionable?
• Alive: Your business is always growing and changing. Your KPIs should evolve as well!

Learn more about KPI best practices .

Business Metrics vs KPIs

A Business Metric is a quantifiable measure that is used to track and assess the status of a specific business process. Every area of business has specific metrics that should be monitored – marketing metrics can include tracking campaign and program statistics, while sales metrics may look at the number of new opportunities and leads in your database, and executive metrics will focus more on big-picture financial metrics . Learn more: Business Metrics .

100+ KPI Examples & Templates

Depending on your industry and the specific department you are interested in tracking, there are a number of KPI types your business will want to monitor. Each department will want to measure success based on specific goals and targets. Take a look at the departmental KPI examples below to learn more about the one you should be measuring.

Below are the 100 important business KPI examples to track & measure.

• Marketing Key Performance Indicators
• Sales & Retail Key Performance Indicators
• Key Performance Indicator Examples for Operations
• Project Management Key Performance Indicators

Marketing Key Performance Example (KPI) Examples

Marketing Key Performance Indicators (KPIs) help you evaluate the success of your marketing efforts and identify areas for improvement. These KPIs cover various aspects of marketing, from digital marketing channels and social media to email marketing and customer relationship management. Regularly monitoring these KPIs can help you refine your marketing strategy and optimize your campaigns for better results.

Return on Marketing Investment (ROMI)

ROMI measures the effectiveness of your marketing campaigns by comparing the revenue generated to the cost of the campaign. It helps you understand which marketing activities are most profitable, allowing you to allocate resources more efficiently.

Customer Acquisition Costs (CAC)

This KPI calculates the cost incurred to acquire a new customer. This KPI is crucial for understanding how much you're spending to grow your customer base and whether your marketing efforts are sustainable in the long run.

Conversion Rate (CVR)

Conversion rate is the percentage of visitors to your website or landing page who take a desired action, such as making a purchase or signing up for a newsletter. A higher CVR usually indicates a more effective marketing strategy.

Cost per Lead (CPL)

CPL measures the cost incurred for each lead generated through your marketing efforts. This KPI helps you understand the efficiency of your lead generation campaigns and whether they are worth the investment.

Cost per Acquisition (CPA)

This metric calculates the cost to acquire a customer through a specific marketing channel or campaign. It's a more specific version of CAC and helps you identify the most cost-effective acquisition methods.

Click-Through Rate (CTR)

CTR is the ratio of users who click on a specific link to the number of total users who view the ad or page. A higher CTR indicates that your ad or content is capturing attention effectively.

Net Promoter Score (NPS)

NPS measures customer loyalty and satisfaction by asking customers how likely they are to recommend your product or service. It's a key indicator of customer experience and potential for growth.

Average Time on Site (ATOS)

ATOS measures the average amount of time a visitor spends on your website. A longer average time usually indicates more engaging content and a higher likelihood of conversion.

Email Open Rate

With this KPI, you can measure the percentage of recipients who open your email. A higher open rate generally indicates a more effective email subject line and greater engagement with your audience.

Email Click-Through Rate (CTR)

This measures the percentage of email recipients who clicked on one or more links in an email. A higher email CTR suggests that your email content is relevant and compelling to the reader.

Email Conversion Rate

Email conversion rate shows you the percentage of email recipients who complete the desired action after clicking on a link in your email, such as making a purchase. It helps evaluate the effectiveness of your email marketing campaigns.

Social Media Engagement Rate

This measures the level of engagement your social media posts receive, including likes, shares, and comments. A higher engagement rate usually indicates more effective content and stronger audience connection.

Social Media Follower Growth

With this KPI, you can track the rate at which your social media following is growing. A steady increase in followers is a good indicator of the effectiveness of your social media strategy.

Social Media Reach

This measures the total number of people who have seen your social media posts. A larger reach increases the potential for engagement and conversion.

Net Profit Margin

This KPI measures the profitability of your marketing efforts by comparing net profit to revenue. A higher net profit margin indicates more effective marketing and greater financial health.

Marketing Qualified Leads (MQL)

MQLs are leads that have been deemed more likely to become customers compared to other leads based on lead intelligence. This KPI helps you focus your efforts on high-potential leads.

Website Traffic by Source

This KPI tracks the sources from which visitors are coming to your website, such as organic search, social media, or direct traffic. It helps you understand which channels are most effective in driving traffic.

Landing Page Conversion Rate

This measures the percentage of visitors to a landing page who take a desired action. A higher conversion rate indicates a more effective landing page design and offer.

Customer Lifetime Value (CLV)

CLV calculates the total value a customer is expected to bring to your business over their entire lifetime. This KPI helps you understand how much you can afford to spend on customer acquisition and retention.

Sales & Retail KPI Examples

The key performance indicator examples below encompass a diverse range of sales facets, including the generation of revenue, overall profitability, the management of customer relationships, and the efficacy of the sales team. By consistently evaluating these KPIs, it becomes possible to hone sales strategies and enhance the performance of the sales team, ultimately leading to more favorable outcomes.

Sales Revenue

This is the total income generated from sales of goods or services. It serves as the starting point for any sales analysis and is a critical indicator of business health and growth potential.

Gross Profit Margin

Gross profit margin is the percentage of revenue that exceeds the cost of goods sold. A higher margin indicates a more profitable business and provides room for growth and expansion.

Net profit margin measures the percentage of revenue remaining after all operating expenses are deducted. It provides insights into overall profitability and financial efficiency.

Sales Growth Rate

Sales growth rate is the percentage increase in sales over a specific period. It's crucial for understanding the scalability of your business and for setting future revenue goals.

Average Deal Size

Average deal size refers to the average value of each sales transaction. A higher average deal size often indicates a more effective sales process and higher-quality leads.

Sales Qualified Leads (SQL)

SQLs are leads that have been vetted and are considered ready for the sales team to engage. This KPI helps prioritize leads and focus sales efforts on high-potential prospects.

Lead Conversion Rate

Lead conversion rate measures the percentage of leads that convert into paying customers. A higher rate indicates a more effective sales funnel and better lead quality.

Sales Pipeline Value

Sales pipeline value is the total value of all opportunities in the sales pipeline. It provides an estimate of future revenue and helps in resource allocation.

Win Rate (Closing Ratio)

Win rate is the percentage of deals that are closed successfully. A higher win rate indicates a more effective sales process and team.

Average Sales Cycle Length

This KPI measures the average time it takes to close a deal, from initial contact to final sale. A shorter sales cycle is generally more efficient and cost-effective.

Customer Retention Rate

Customer retention rate refers to the percentage of customers who continue to buy from you over a specific time period. High retention rates are indicative of customer satisfaction and loyalty.

Customer Churn Rate

Customer churn rate is the percentage of customers who stop buying from you during a specific period. A lower churn rate is ideal and indicates strong customer relationships.

Upsell/Cross-sell Rate

This KPI measures the percentage of existing customers who purchase additional products or services. A higher rate indicates effective sales and marketing strategies for customer expansion.

Average Revenue per User (ARPU)

ARPU calculates the average revenue generated from each user or customer. It's a key metric for understanding the value each customer brings to your business.

Quota Attainment Rate

This KPI refers to the percentage of sales reps who meet or exceed their sales quotas. A higher rate indicates a well-performing sales team and effective sales strategies.

Customer Lifetime

As mentioned, customer lifetime measures the total time a customer continues to purchase from your business. A longer customer lifetime indicates strong customer loyalty and higher lifetime value.

CPA calculates the cost to acquire a customer through a specific marketing channel or campaign. It helps you identify the most cost-effective acquisition methods.

Sales Productivity

With this KPI, you can track the effectiveness of your sales team in generating revenue. It takes into account various factors like time spent on calls, meetings, and revenue generated.

Average Purchase Value (APV)

APV measures the average value of each transaction made by your customers. A higher APV indicates that customers are purchasing more expensive items or more items per transaction.

Customer Satisfaction Score (CSAT)

CSAT measures customer satisfaction through surveys and feedback. A higher CSAT score indicates higher customer satisfaction, which often leads to higher retention rates.

KPI Examples for Operations

These KPIs look at different parts of operations, like making things efficiently, keeping track of stock, and how well the business is doing with the money. By keeping an eye on these key performance indicator examples, you can make your operations better and help your business do even better overall.

Overall Equipment Effectiveness (OEE)

OEE measures the efficiency and effectiveness of your equipment. It combines availability, performance, and quality metrics to show how well your machinery is operating.

First Pass Yield (FPY)

FPY measures the percentage of products manufactured correctly the first time without the need for rework or repair. A higher FPY indicates a more efficient and effective production process.

On-Time Delivery (OTD)

OTD measures the percentage of products or services delivered on time to customers. High OTD rates improve customer satisfaction and can lead to increased loyalty and sales.

Production Downtime

This KPI tracks the amount of time production is halted, usually due to machine failures or maintenance. Reducing downtime is crucial for increasing efficiency and profitability.

This is the maximum amount of time allowed to produce a product in order to meet customer demand. It helps in balancing workloads and identifying bottlenecks in the production process.

This KPI refers to the total time taken to complete a specific task or process from start to finish. Reducing cycle time can lead to increased throughput and operational efficiency.

Throughput Rate

Throughput rate measures the number of units produced per unit of time. Increasing throughput rate can lead to higher production volumes and potentially higher revenues.

Capacity Utilization

This KPI measures how effectively you're using your production capacity. Higher capacity utilization rates often indicate more efficient use of resources.

Labor Productivity

Labor productivity measures the output produced per hour of labor. Higher labor productivity can indicate more efficient work processes and can contribute to lower production costs.

Inventory Turnover

Inventory turnover measures how many times inventory is sold and replaced over a specific period. A higher turnover rate indicates better inventory management and stronger sales performance.

Operating Cashflow

Operating cashflow keeps track of the cash generated from core business operations. Positive operating cash flow is essential for covering operational expenses and for business growth.

Days in Inventory

This KPI measures the average number of days items stay in inventory before being sold. Lower days in inventory indicate faster inventory turnover and better cash flow.

Order Picking Accuracy

With this, you can measure the percentage of orders picked without errors. Higher accuracy rates improve customer satisfaction and reduce the costs associated with returns and corrections.

Return on Assets (ROA)

ROA measures the profitability of a company in relation to its total assets. A higher ROA indicates more effective use of assets to generate profits.

Return on Investment (ROI)

ROI measures the profitability of a particular investment relative to its cost. A higher ROI indicates a more successful investment.

Total Cost of Ownership (TCO)

TCO calculates the total cost of purchasing and operating a product over its lifetime. Understanding TCO helps in making more informed purchasing decisions.

Cost of Goods Sold (COGS)

COGS measures the direct costs involved in producing goods that have been sold. Lowering COGS can lead to higher gross profit margins.

Cost Variance

You should use the cost variance KPI to measure the difference between planned and actual costs. Understanding cost variance helps in better budget management and financial planning.

Waste Reduction Rate

This KPI measures the percentage reduction in waste materials in the production process. A higher waste reduction rate indicates more sustainable and cost-effective operations.

Employee Turnover Rate

Employee Turnover Rate measures the percentage of employees who leave the company in a given period. A lower turnover rate is generally indicative of higher employee satisfaction and lower recruiting costs.

Project Management KPIs

Paying attention to the below KPIs allows project managers to make better decisions, manage risks effectively, and ultimately deliver successful projects that meet or exceed stakeholder expectations.

Project Timeline (Schedule Variance)

This KPI measures the difference between the planned and actual project timelines. A negative variance indicates a delay, while a positive variance suggests the project is ahead of schedule. This KPI is crucial for assessing project efficiency and for stakeholder communication.

Budget Variance

It compares the estimated budget to the actual costs incurred. A positive variance indicates the project is under budget, while a negative variance means it's over budget. Monitoring this KPI helps in financial planning and risk mitigation.

Cost Performance Index (CPI)

CPI measures the cost efficiency of a project by comparing the budgeted costs to the actual costs. A CPI greater than 1 indicates a favorable cost performance, while a CPI less than 1 suggests cost overruns.

Schedule Performance Index (SPI)

SPI measures the schedule efficiency of a project by comparing the planned progress to the actual progress. An SPI greater than 1 indicates that the project is ahead of schedule, while an SPI less than 1 suggests a delay.

Scope Creep

Scope creep refers to uncontrolled changes or additions to a project's scope without corresponding increases in resources or timeline. This KPI is essential for maintaining project integrity and meeting original objectives.

Resource Utilization

To measure how efficiently project resources, such as manpower and materials, you should use this KPI. Higher utilization rates indicate more efficient resource management, which can lead to cost savings.

Earned Value (EV)

The earned value measures the value of the work completed up to a certain point against the original budget. It helps in assessing project performance and predicting future outcomes.

Actual Cost (AC)

This pertains to the total cost incurred for the project work performed during a specific period. Monitoring AC helps in budget control and future financial planning.

Planned Value (PV)

Planned value is the estimated cost for project activities planned to be completed by a specific time. It serves as a baseline for comparing actual performance and is crucial for budget management.

Estimate at Completion (EAC)

EAC provides a forecast of the total cost of the project at completion. It's vital for budget planning and for communicating with stakeholders about financial expectations.

Estimate to Complete (ETC)

ETC estimates the remaining costs needed to complete the project. This KPI helps in budget reallocation and in assessing whether additional resources are required.

As mentioned, ROI measures the profitability of the project by comparing the benefits gained against the costs incurred. A higher ROI indicates a more successful project in terms of financial returns.

Risk Exposure

Risk exposure quantifies the potential impact of identified project risks. It helps in prioritizing risks and in developing appropriate mitigation strategies.

Change Requests

This KPI tracks the number and nature of changes requested during the project. Monitoring change requests helps assess scope creep and its impact on the project.

Team Productivity

It measures the output per team member over a specific period. Higher productivity levels indicate effective team management and can lead to faster project completion.

Stakeholder Satisfaction

Stakeholder satisfaction measures the level of satisfaction among project stakeholders, including clients, team members, and investors. High satisfaction levels are often indicative of project success.

Quality Metrics

Quality metrics, like Defect Density and Rework, measure the quality of the project's deliverables. Lower defect density and less rework indicate higher quality and greater customer satisfaction.

On-Time Completion Rate

This KPI measures the percentage of project tasks completed on time. A higher rate indicates effective schedule management and a greater likelihood of overall project success.

Project Milestone Achievement

You can track the number of project milestones reached on time using this KPI. Achieving milestones as planned is crucial for maintaining project timelines and stakeholder confidence.

Project Health

Project health is a comprehensive KPI that combines schedule, budget, scope, and quality metrics. It provides a holistic view of project performance and is crucial for decision-making and stakeholder communication.

Your Guide to Informed Decision-Making

KPIs are more than just buzzwords; they are the lifeblood of effective business management. We hope our comprehensive guide has helped you understand the complex world of KPIs. Remember to tailor the KPIs you’re measuring to your business goals to ensure that you focus on what truly matters for your organization's success.

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• 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.

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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. Both approaches can be valuable for various business contexts, from team management to expansion projects .

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

What's the difference between accuracy and precision?

How Asana streamlines strategic planning with work management

What is management by objectives (MBO)?

7 steps to complete a social media audit (with template)

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Top kpi examples that every business needs to measure.

A Gartner study found that successful organizations are 1.6x more likely to establish clear strategies and goals. When working to achieve goals, KPIs serve as the compass, guiding you toward your objective and providing invaluable insights into various facets of operations. 

With so many metrics available, you might find it challenging to determine which KPIs deserve your attention. In this article, we explore essential key performance indicators examples that every business needs to measure, highlighting their significance and impact on organizational growth and sustainability.

Table of contents:

What are KPIs?

1. financial kpis, 2. marketing kpis, 3. sales kpis, 5. operations kpis, 6. customer service kpis, 7. product development kpis, 1. saas kpis, 2. supply chain kpis, 3. manufacturing kpis, 4. healthcare kpis, 5. e-commerce kpis, 6. retail kpis, 7. telecommunications kpis, 8. transportation and logistics kpis, navigating change with kpis and strategic analytics.

Key Performance Indicators (KPIs) are quantifiable metrics used by organizations to assess their performance in achieving specific goals and objectives. These measurable values span across various facets of business operations, such as financial performance, customer satisfaction, employee productivity, and operational efficiency. 

KPIs are vital tools for evaluating progress, identifying areas for improvement, and making data-driven decisions. By tracking and analyzing these metrics through a KPI dashboard (or Liveboards as we call them), businesses can effectively monitor their performance, align activities with strategic objectives, and drive continuous improvement to ensure long-term success and competitiveness in their respective industries.

Key performance indicators (KPI) examples across various business functions

The finance department is responsible for managing financial data within a company. Key players in this department include financial analysts, accountants, and financial managers. They often rely on comprehensive financial Liveboards to track and analyze key metrics for informed decision-making and performance management. 

Financial KPI examples include:

Revenue growth rate: The revenue growth rate measures the percentage increase in a company's revenue over a specific period. This metric is crucial for evaluating your company’s ability to generate more sales and expand its market presence. By tracking the revenue growth rate, you can assess the effectiveness of your sales and marketing strategies and pinpoint areas for improvement.

Gross profit margin: Gross profit margin represents the percentage of revenue that exceeds the cost of goods sold (COGS). It helps you measure the efficiency of your production and pricing strategies, as well as your ability to generate profits from your core business activities. A higher gross profit margin indicates that you can retain more revenue after accounting for the direct costs associated with producing goods or delivering services.

Net profit margin: Net profit margin represents the percentage of revenue that remains as net profit after deducting all expenses, including COGS, operating expenses, taxes, and interest. It helps you understand the overall profitability of your operations, taking into account all expenses incurred to generate revenue. A higher net profit margin signifies that you are able to generate more profit from each dollar of revenue.

Projected revenue: Projected revenue is the estimated total income that a company anticipates generating within a specific future period, often a fiscal year or quarter. It plays a critical role in financial planning and forecasting, providing insights into your company's expected financial performance and helping to guide strategic decision-making. 

🔍Here are 21 financial KPIs and metrics you should track in 2024

Marketing involves activities aimed at promoting products or services, building brand awareness, and driving prospect engagement for sales. It encompasses various channels such as advertising, digital marketing, public relations, and market research. Marketers rely on sophisticated marketing Liveboards to monitor and analyze key metrics, enabling data-driven decision-making and campaign optimization.

Marketing KPI examples include:

Customer acquisition cost (CAC): Customer acquisition cost measures the cost incurred to acquire a new customer. It provides valuable insights into the efficiency of your marketing campaigns and aids in budget allocation.

Customer lifetime value (CLTV): Customer lifetime value estimates the total revenue a customer is expected to generate over their entire relationship with the company. This estimation guides customer segmentation and retention strategies.

Conversion rate: The conversion rate tracks the percentage of website visitors or leads who take a desired action, such as making a purchase or signing up for a newsletter. Analyzing conversion rates helps identify areas for improvement in the sales funnel and enhances overall campaign performance.

Return on advertising spend (ROAS): ROAS calculates the revenue generated from advertising campaigns relative to the cost of those campaigns. You can gain insights into the profitability and efficiency of your marketing efforts.

Website traffic: Website traffic measures the volume of visitors to a website. It includes metrics such as total visits, unique visitors, and page views, providing insights into the effectiveness of SEO efforts, content marketing, and online advertising initiatives.

🔍 15 marketing KPIs and metrics to track in your dashboard

Sales encompass the process of identifying, prospecting, and converting leads into customers through communication and relationship-building efforts. Sales teams play a pivotal role in driving revenue growth and expanding market share for businesses across various sectors. Utilizing a comprehensive sales Liveboard , you can monitor key performance indicators in real-time. 

Sales KPI examples include:

Monthly sales growth: Monthly sales growth measures the percentage increase or decrease in sales revenue from one month to the next. It provides insights into the short-term sales performance of your company. 

Average profit margin: Average profit margin calculates the percentage of revenue that translates into profit after accounting for all costs and expenses. It indicates the efficiency of your operations in generating profits from its sales. 

Monthly sales bookings: Monthly sales bookings represent the total value of sales orders or contracts secured within a specific month. This KPI reflects your sales team's ability to generate new business and close deals within a given period. It provides visibility into your company's revenue pipeline and helps forecast future revenue streams. 

Sales opportunities: Sales opportunities refer to qualified leads or prospects in the sales pipeline that have the potential to be converted into customers. This KPI helps sales teams prioritize their efforts and focus on prospects with the highest likelihood of closing a sale. 

Sales targets: Sales targets represent the specific, measurable goals set for sales teams to achieve within a given period. These targets are typically based on revenue or sales volume objectives and are aligned with the overall business objectives.

🔍 Top 16 KPIs and metrics every sales team should be tracking in 2024

The Human Resources (HR) function within organizations is responsible for managing various aspects of the employee lifecycle, including recruitment, onboarding, training, performance management, compensation, and employee relations. HR plays a vital role in attracting and retaining talent, fostering a positive work culture, and ensuring compliance with labor laws and regulations. To efficiently monitor and analyze these multifaceted responsibilities, HR departments often utilize tools such as HR dashboards .

HR KPI examples include:

Employee turnover rate: Employee turnover rate measures the percentage of employees who leave the organization within a specific period. This indicates workforce stability, engagement levels, and the effectiveness of retention strategies.

Employee satisfaction score: Employee satisfaction score surveys or assessments measure employee satisfaction and engagement levels. These provide insights into organizational culture, leadership effectiveness, and areas for improvement.

Time-to-hire: Time-to-hire calculates the average duration from posting a job vacancy to hiring a suitable candidate. It reflects recruitment efficiency and the organization's ability to attract top talent.

Training and development ROI: Training and development ROI evaluates the return on investment from training and development initiatives. It helps in assessing the impact on employee performance, productivity, and skill development.

HR-to-employee ratio: The HR-to-employee ratio compares the number of HR staff to the total number of employees, indicating HR department efficiency and workload distribution.

🔍 12 HR metrics examples and KPIs you should track

Operations management focuses on the efficient production and delivery of goods and services. It involves optimizing processes, managing supply chains, and ensuring that operations run smoothly to meet customer demands. Operations teams often use Liveboards to track and analyze performance metrics for continuous improvement.

Operations KPI examples include:

Operational efficiency: Operational efficiency measures the effectiveness of operations in converting inputs into outputs. It helps in assessing the overall productivity and performance of operational processes.

Inventory turnover: Inventory turnover indicates how often inventory is sold and replaced over a specific period. It helps manage stock levels and understand sales patterns.

Order fulfillment time : Order fulfillment time tracks the average time taken from receiving an order to delivering it to the customer. This KPI assesses the efficiency of the order processing and delivery system.

Quality control metrics: Quality control metrics measures the number of defects or errors in products or services. Helps in evaluating the effectiveness of quality management processes.

Customer service focuses on delivering support and assistance to customers before, during, and after a purchase. It plays a crucial role in ensuring customer satisfaction and loyalty. Customer service teams use various metrics to evaluate performance and identify areas for improvement.

Customer service KPI examples include:

Customer satisfaction score (CSAT): The CSAT score is the measure of customers' satisfaction with a product or service based on their feedback.

Net promoter score (NPS): The NPS score assesses the likelihood of customers recommending a company’s products or services to others.

First response time: First response time is the track of the average time taken for customer service teams to respond to a customer's initial inquiry.

Resolution time: Resolution time is the measure of the average time taken to resolve a customer issue or complaint.

Product development focuses on creating new products and improving existing ones. It involves research, design, testing, and launching new products to meet market demands and drive innovation. Product development teams track various metrics to ensure the successful delivery of products.

Product development KPI examples include:

Time-to-market: Time-to-market is the time taken from product conception to its launch in the market. It helps in assessing the efficiency of the product development process.

Product defect rate : Product defect rate is the percentage of products that fail to meet quality standards. You can assess the effectiveness of quality control during development.

Customer feedback score : Customer feedback score is the input from customers regarding the product’s features and performance to guide future improvements.

Information Technology (IT) focuses on managing technology infrastructure, software, and data systems within an organization. IT professionals monitor various KPIs to ensure system reliability, security, and efficiency.

IT KPI examples include:

System uptime: System uptime is the percentage of time that IT systems and applications are operational and available.

Incident response time: Incident response time measures the average time taken to respond to and resolve IT incidents or issues.

IT support ticket resolution time: IT support ticket resolution time is the average time taken to resolve support tickets submitted by users.

Data breach incidents: Data breach incidents are the number of security breaches affecting company data, highlighting the effectiveness of security measures.

Key performance indicators (KPI) examples across various industries

The Software as a Service (SaaS) industry revolutionizes software delivery by providing cloud-hosted applications on a subscription basis. Within this industry, tracking KPIs is essential for evaluating performance and guiding strategic decision-making. These metrics enable SaaS companies to optimize their operations and drive sustainable growth.

Examples of KPIs in this industry include:

Monthly recurring revenue (MRR): Monthly recurring revenue measures the predictable revenue generated from subscription fees on a monthly basis, providing insights into revenue stability and growth trajectory.

Churn rate: The churn rate tracks the percentage of customers who cancel their subscriptions within a specific period. This indicates customer satisfaction, product-market fit, and the effectiveness of customer success efforts.

Average revenue per user (ARPU): Average revenue per user determines the average revenue generated from each user or customer. It aids in pricing strategies, upselling efforts, and revenue forecasting.

Gross margin: Gross margin calculates the percentage of revenue remaining after deducting the cost of goods sold (COGS). This metric reflects the profitability of SaaS offerings and operational efficiency.

Customer satisfaction score (CSAT): Customer satisfaction score surveys customers to assess their satisfaction levels with the SaaS product and service. It provides actionable feedback for product enhancements, support improvements, and customer retention initiatives.

🔍 12 key SaaS metrics and KPIs you should track in 2024

In the supply chain industry, KPIs play a vital role in evaluating the efficiency, effectiveness, and performance of various processes and stakeholders involved in the supply chain network. These KPIs provide valuable insights into factors such as inventory management, order fulfillment, supplier performance, transportation efficiency, and overall supply chain costs. 

Order fill rate: Order fill rate measures the percentage of customer orders fulfilled completely from available inventory, indicating efficient inventory management and customer satisfaction.

Perfect order rate: Perfect order rate reflects the percentage of orders delivered without errors or defects. It showcases operational excellence and enhances customer trust and loyalty.

On-time delivery: On-time delivery measures the percentage of customer orders delivered according to the promised delivery date, demonstrating reliability and responsiveness to customer needs.

Cycle time: Cycle time calculates the average duration required to complete a specific process within the supply chain. It highlights operational efficiency and identifies areas for improvement.

Inventory turnover: Inventory turnover indicates how quickly inventory is sold or used up, reflecting the efficiency of inventory management and minimizing carrying costs.

🔍 15 supply chain KPIs and metrics you should track in 2024

The manufacturing industry is characterized by complex processes, high-volume production, and stringent quality standards. In such an environment, key performance indicators are crucial for monitoring and optimizing operational efficiency, quality control, and cost management. KPIs enable manufacturers to identify bottlenecks, improve production processes, and enhance overall productivity. These metrics are typically displayed on a manufacturing Liveboard, providing real-time visibility into performance and facilitating informed decision-making.

Overall equipment effectiveness (OEE): Overall equipment effectiveness measures the efficiency of manufacturing equipment by assessing availability, performance, and quality. It helps in identifying opportunities for downtime reduction and productivity improvement.

First pass yield (FPY): First pass yield calculates the percentage of products manufactured correctly on the first attempt without rework or defects. This indicates process reliability, quality control effectiveness, and waste reduction.

Defect rate: Defect rate tracks the percentage of defective products or components produced within a specific period, highlighting quality issues, root causes, and areas for corrective action.

Production cost per unit: Production cost per unit calculates the total cost of production divided by the number of units manufactured, providing insights into cost efficiency, profitability, and pricing strategies.

Inventory turnover rate (ITR): The inventory turnover rate evaluates how quickly inventory is sold or used within a specific period.

🔍 12 manufacturing KPIs and metrics you need to track in your dashboard

In the healthcare industry, where patient outcomes and quality of care are paramount, KPIs play a pivotal role in measuring and improving clinical effectiveness, operational efficiency, and patient satisfaction. The metrics are often visualized on a healthcare Liveboard, offering comprehensive insights into performance and facilitating proactive management of healthcare operations.

Patient satisfaction score: The patient satisfaction score measures patient perceptions of the quality of care, communication with healthcare providers, and overall experience, influencing patient retention, loyalty, and reputation.

Cost per procedure: Cost per procedure measures the average cost incurred by the healthcare facility for performing a specific medical procedure. It provides insights into resource utilization, cost containment strategies, and pricing structures.

Average revenue per patient: Average revenue per patient KPI calculates the average revenue generated by each patient during their interaction with the healthcare facility. Analyzing average revenue per patient helps in understanding the financial impact of patient interactions on the organization.

Revenue cycle length: Revenue cycle length tracks the average duration from patient encounter to reimbursement receipt. Monitoring revenue cycle length helps in identifying inefficiencies and bottlenecks in revenue cycle management.

Employee turnover rate: Employee turnover rate KPI measures the percentage of employees who leave the healthcare organization within a specific period. Analyzing employee turnover rate helps in workforce management, talent retention, and organizational performance assessment.

🔍 15 healthcare KPIs & metrics you should track in 2024

The e-commerce industry involves buying and selling goods or services online, facilitated by digital platforms and electronic transactions. KPIs in this industry are essential for evaluating and optimizing various aspects of online business operations. By monitoring e-commerce KPIs , businesses can assess the effectiveness of marketing campaigns, website performance, and customer engagement strategies. These metrics are typically displayed on an e-commerce Liveboard , providing real-time analytics and facilitating data-driven decision-making to drive business growth and profitability.

Average order value (AOV): AOV measures the average amount spent by customers in a single transaction.

Cart abandonment rate: This measures the percentage of users who add items to their shopping cart but do not complete the purchase. A high abandonment rate indicates potential issues with the checkout process or pricing.

Retention rate: Retention rate measures the percentage of customers who return to make a repeat purchase. It helps gauge customer loyalty and satisfaction.

Average session duration: The average session duration metric tracks the average amount of time visitors spend on your website during a single session. Longer session durations can indicate higher engagement and interest in your products or content.

Average customer service response time: This metric tracks the average time it takes for customer service representatives to respond to inquiries or support tickets. A fast response time contributes to better customer satisfaction and retention.

In the retail industry, where consumer preferences and market trends constantly evolve, key performance indicators are indispensable for monitoring and optimizing store performance, sales effectiveness, and customer satisfaction. By analyzing these indicators, retailers can identify sales trends, assess store profitability, and optimize merchandise assortments. 

These metrics are usually displayed on a dynamic retail Liveboard, offering comprehensive insights into store performance.

Sales revenue: Sales revenue is the total amount of money earned from selling goods or services over a specific period. It's a fundamental measure of a retail business's financial health.

Sell-through rate: The sell-through rate is the percentage of inventory that is sold compared to the total available inventory. It helps retailers identify slow-moving or obsolete products.

Employee productivity: Employee productivity measures the sales generated per employee or per labor hour. It helps evaluate staffing levels and employee performance.

Online sales metrics: Online sales metrics are various metrics related to e-commerce performance, such as website traffic, conversion rate, average order value, and bounce rate. They provide insights into online customer behavior and website effectiveness.

Foot traffic: Foot traffic is the number of people who enter a physical store within a specific period. It's a measure of store popularity and can help assess the effectiveness of location and marketing efforts.

In the telecommunications industry, KPIs are essential for measuring service quality, customer satisfaction, and operational efficiency. With rapid technological advancements and growing customer expectations, telecom companies must leverage these metrics to stay competitive and ensure optimal performance. KPIs help telecom operators monitor network performance, customer interactions, and financial health, enabling them to enhance service reliability, address customer concerns proactively, and make data-driven decisions. 

Average revenue per user (ARPU): ARPU is the average revenue generated from each customer over a specific period. It helps assess revenue generation and guide pricing strategies.

Customer churn rate: Customer churn rate is the percentage of customers who discontinue their services within a given period. A high churn rate may indicate issues with service quality or customer satisfaction.

Network availability: Network availability is the percentage of time the network is operational and accessible to users. It reflects the reliability and stability of the network.

Call drop rate: The call drop rate indicates the percentage of calls that are disconnected unexpectedly. This metric helps identify network issues and improve service quality.

Customer satisfaction score (CSAT): The CSAT score assesses customer satisfaction with service quality and support. It provides insights into customer perceptions and areas for improvement.

In the transportation and logistics sector, KPIs are essential for optimizing the movement of goods and services across supply chains. These metrics offer insights into the efficiency, reliability, and cost-effectiveness of logistics operations. By monitoring KPIs, organizations can identify and address bottlenecks, reduce operational costs, and improve service delivery. Effective KPI tracking helps transportation and logistics companies meet delivery deadlines, manage resources efficiently, and enhance overall customer satisfaction in an increasingly complex and fast-paced industry.

On-time delivery rate : On-time delivery rate measures the percentage of deliveries completed by the promised date. This KPI indicates the efficiency and reliability of the delivery process.

Warehouse productivity: Warehouse productivity is a KPI that assesses the efficiency of warehouse operations, including inventory management, picking, and packing processes.

Transit time : Transit time is the average time taken to move goods from the origin to the destination. Shorter transit times can improve customer satisfaction and supply chain efficiency.

Delivery cost per order: Delivery cost per order is the average cost incurred for each delivery. It helps in evaluating cost efficiency and identifying areas for cost reduction.

As businesses evolve in response to shifting market dynamics, the strategic utilization of key performance indicators becomes increasingly vital. By embracing a culture of performance measurement and leveraging advanced analytics tools, you can effectively capitalize on opportunities and navigate challenges. This helps in maintaining a competitive edge in an ever-evolving business landscape. 

ThoughtSpot stands at the forefront of this journey, offering transformative analytics solutions. Harness the power of data-driven insights for strategic decision-making and operational excellence—schedule a demo . 

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What Are Business KPIs? Types and Examples

• November 29, 2023
• Business Analytics

Key Performance Indicators (KPIs) serve as crucial metrics for evaluating an organization’s progress towards its goals. They provide valuable insights into performance, enabling informed decision-making. In this guide, we’ll delve into the significance of KPIs, their types, examples, and the process of creating and utilizing them effectively.

1. What Are Key Performance Indicators (KPIs)?

KPIs are quantifiable measures that reflect the success of an organization in achieving its objectives. These indicators vary across industries and are tailored to align with specific goals, whether they relate to financial performance, customer satisfaction, operational efficiency, or other strategic areas.

Also known as key success indicators (KSIs), KPIs differ across companies and industries based on specific performance criteria. For instance, a software company aiming for the highest growth in its sector might prioritize year-over-year (YOY) revenue growth as its primary performance indicator. On the other hand, a retail chain might give more importance to same-store sales as the most relevant KPI metric for assessing growth.

At the core of KPIs lies the process of collecting, storing, cleaning, and synthesizing data. This information can be financial or non-financial and may pertain to any department within the company. The ultimate goal of KPIs is to convey results concisely, enabling management to make more informed strategic decisions.

Example of KPIs

Key Performance Indicators (KPIs) are essentially goals that you strive to accomplish. To simplify, consider owning an apple stand with the aim of selling 1,000 apples this month. This becomes your KPI. Whether you sell 250 apples per week or all 1,000 in the first three days, the goal is to reach that 1,000 mark. Monitoring your progress becomes easier, like when it’s the second week of September and you’ve sold 550 apples – you can check your KPI to gauge if you’re on track.

In business, KPIs can be broad, assessing overall performance, such as achieving $1M in annual recurring revenue for the fiscal year. On a more detailed level, KPIs can delve into specific departmental, team, or individual processes.

2. Categories of KPIs

Key Performance Indicators (KPIs) can be broadly classified into four distinct categories, each exhibiting unique characteristics, time frames, and target users.

Strategic KPIs

Strategic KPIs are high-level performance measurements that align with the overall strategic goals and objectives of the organization. These KPIs are critical for assessing the long-term success and direction of the company. For Example, Increasing the company’s market share by 5% in the next fiscal year to establish a stronger position within the industry.

Operational KPIs

Operational KPIs are metrics that focus on the day-to-day processes and activities within the organization. These KPIs are essential for evaluating the efficiency and effectiveness of operational procedures. For Example, Reducing the average order processing time from 48 hours to 24 hours to enhance order fulfillment speed and customer satisfaction.

Functional KPIs

Functional KPIs are specific to individual departments or functions within the organization, such as sales, marketing, customer service, or production. These KPIs help measure the performance and impact of each functional area on the overall business objectives. For Example, Increasing the conversion rate of website visitors to customers from 2% to 4% through targeted marketing campaigns and website optimization efforts.

Leading and lagging KPIs

Leading and lagging Key Performance Indicators (KPIs) provide insights into whether the analyzed data is indicative of future events or reflective of past occurrences. Take, for instance, two distinct KPIs: overtime hours worked and profit margin for a flagship product. The quantity of overtime hours worked can serve as a leading indicator if the company starts observing a decline in manufacturing quality. Conversely, profit margins, being a consequence of operational activities, are categorized as lagging indicators.

3. Types of KPIs

Financial kpis.

These KPIs are critical in measuring the financial health and performance of a company. They provide insights into a company’s profitability, liquidity, solvency, efficiency, and investment potential. They help stakeholders understand how well a company uses its resources to generate income and growth.

Examples of Financial Metrics and KPIs include:

• Gross Profit Margin
• Net Profit Margin
• Return on Investment (ROI)
• Economic Value Added (EVA)
• Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
• Operating Cash Flow

Customer Experience KPIs

These KPIs focus on assessing the overall experience and satisfaction of customers with a company’s products or services. They provide insights into customer loyalty, satisfaction, and engagement. They help companies understand their customers’ needs and expectations, and identify areas for improvement to enhance customer retention and acquisition.

Examples of Customer Experience Metrics and KPIs include:

• Net Promoter Score (NPS)
• Customer Satisfaction Score (CSAT)
• Customer Effort Score (CES)
• Customer Lifetime Value (CLV)
• Customer Churn Rate
• First Call Resolution (FCR)

Process Performance KPIs

These KPIs are used to measure the efficiency and effectiveness of business processes. They provide insights into the performance of key processes, helping to identify bottlenecks, improve workflows, and optimize resource use. They are essential for ensuring operational excellence and competitiveness.

Examples of Process Performance Metrics and KPIs include:

• Time to Market (TTM)
• First-Time-Right Rate
• Process Downtime
• Efficiency Ratio

Marketing KPIs

These KPIs measure the effectiveness and return on investment of marketing campaigns and initiatives. They provide insights into brand awareness, lead generation, conversion rates, customer acquisition costs, and customer lifetime value. They help marketers make data-driven decisions and optimize their marketing strategies.

Example of Marketing KPIs include:

• Monthly website traffic
• Page likes and comments
• Social media engagement rates
• Number of new monthly leads
• Click-through rate percentage

These KPIs gauge the performance and effectiveness of IT functions and systems. They provide insights into system reliability, security, user satisfaction, and the efficiency of IT processes. They help IT teams to ensure uninterrupted business operations, optimize IT resources and processes, and align IT initiatives with business goals.

Example of IT KPIs include:

• System Uptime
• Mean Time to Repair (MTTR)
• Incident Resolution Time
• Help Desk Response Time
• Percentage of IT Spending Against Revenue
• Application Performance

These KPIs assess the performance and effectiveness of sales teams and strategies. They provide insights into sales growth, revenue, sales cycle length, deal size, and quota attainment. They help sales leaders to drive sales performance, manage sales pipelines, and plan sales strategies.

Examples of Sales KPIs include:

• Monthly sales growth
• Monthly customers per sales rep
• Quarterly sales bookings
• Number of engaged leads in sales funnel
• Average conversion time

Human Resource and Staffing KPIs

These KPIs measure the effectiveness and efficiency of HR processes and staffing strategies. They provide insights into employee engagement, productivity, retention, and development. They help HR leaders to attract, retain, and develop talent, and create a positive workplace culture.

Examples of Human Resource and Staffing KPIs include:

• Monthly overtime hours
• Quarterly training costs
• Cost per new hire
• Employee productivity
• Monthly absenteeism rate

4.   KPI Levels

Companies utilize KPIs to monitor and evaluate their performance across different levels.

Starting with company-wide KPIs, these are metrics that provide a high-level overview of the overall health and performance of the business. They are often tied to the company’s strategic objectives and offer insights into whether these goals are being met. Examples of company-wide KPIs include measures like total revenue, net profit margins, or customer retention rates, which reflect the overall success of the business.

Moving a level deeper, department-level KPIs come into play. These are more specific indicators that focus on the performance and efficiency of individual departments within the organization like sales, marketing, HR, finance, or operations. These KPIs help track the progress of each department towards its specific goals, which in turn contribute to the overall company objectives. For instance, the sales department might monitor KPIs such as quarterly sales growth, while HR could be tracking employee turnover rates.

The third level involves digging even deeper into project-level or subdepartment-level KPIs. These metrics measure the success of particular projects, teams, or initiatives within a department. They provide detailed insights into the effectiveness of specific tasks and processes, helping identify areas for improvement and ensuring that every aspect of the operation is aligned with broader company goals. For instance, a marketing team might have a project-level KPI for a specific campaign, such as the number of leads generated or the conversion rate.

By utilizing KPIs across these three levels, companies can gain a comprehensive understanding of their performance from multiple perspectives. This helps inform decision-making at all levels of the organization and ensures alignment between individual, departmental, and company-wide goals.

5 .  What is the best way to measure KPI?

You may be wondering, “How can I assess my company’s Key Performance Indicators (KPIs)?” The most effective approach is to employ the SMART framework.

What is the SMART framework?

The SMART framework is a set of guidelines that ensure your KPIs are effective. The acronym stands for Specific, Measurable, Attainable, Relevant, and Time-bound.

Here’s a breakdown:

• Specific: Your KPI should target a precise area for improvement. It could be anything from sales to customer satisfaction or website traffic.
• Measurable: Your KPI needs to be quantifiable. This means it should provide clear data, like percentages, to track progress.
• Attainable: Your KPI should be realistic. It’s essential to set achievable targets within a given timeframe, rather than aiming for impossible figures.
• Relevant: Your KPI should align with your business objectives and focus on critical success areas.
• Time-bound: Your KPI should have a set timeframe. Whether it’s monthly, quarterly, or yearly, having a fixed duration helps with performance tracking and growth comparison.

The SMART framework can be further expanded into SMARTER by including evaluation and re-evaluation steps. Regularly checking your KPIs ensures they remain relevant, attainable, and on track.

6. What Makes a Good KPI?

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. But not all KPIs are created equal. Here’s what makes a KPI effective:

Alignment with Strategic Goals

An effective KPI should align with your organization’s strategic goals and objectives. It should reflect what your business wants to achieve and how it plans to do so. This alignment ensures that everyone in the organization understands what’s important and works towards the same targets.

Actionable Insights

A good KPI provides actionable insights. It should guide decision-making and influence behavior. If a KPI reveals a discrepancy between a goal and current performance, there should be clear actions that can be taken to address this gap.

Understandability

A KPI should be easily understood by everyone in the organization, regardless of their role or level of expertise. It should be defined in simple terms and communicated clearly. This ensures that everyone knows what the KPI represents and how their actions contribute to its achievement.

The KPI should be relevant to the department, team, or individual responsible for its achievement. It should be closely tied to their work and influenceable by their actions. Irrelevant KPIs can lead to frustration and wasted effort.

Timely and Measurable

Good KPIs should be measurable and updated frequently enough to provide timely feedback. They should allow for tracking progress over time, which helps in making adjustments as necessary.

Encourages Performance Improvement

Finally, an effective KPI encourages performance improvement. It should challenge teams or individuals to improve their work and achieve better results. By setting a benchmark for success, a good KPI motivates and drives performance.

7.   How to Set a Good KPI

Setting good Key Performance Indicators (KPIs) involves aligning them with your specific business goals, ensuring they are measurable, relevant, and time-bound. While industry-recognized KPIs can provide a starting point, it’s crucial that the ones you set are tailored to your unique business situation.

Let’s illustrate this with an example of a poorly set KPI versus a well-set one:

Bad KPI Example: “Increase website traffic.”

While this KPI sounds like a reasonable objective for a company seeking to enhance its online presence, it’s too broad and not specific enough. It doesn’t provide a clear target, it’s not time-bound, and it doesn’t necessarily align with a meaningful business outcome. More website traffic is generally a positive thing, but if it doesn’t lead to increased conversions or sales, it may not be contributing to the company’s bottom line.

Good KPI Example: “Increase website conversion rate by 15% over the next quarter.”

This is a much more effective KPI. Firstly, it’s specific and measurable – you’re aiming for a 15% increase. Secondly, it’s time-bound, as you’re looking to achieve this within the next quarter. Finally, it’s directly tied to a meaningful business outcome. Increasing the website conversion rate means more website visitors are taking the desired action (like making a purchase or signing up for a newsletter), which can directly contribute to increased revenue or customer engagement.

8. What are KPI reports?

A Key Performance Indicator (KPI) should align with strategic goals, offer actionable insights, be easily understood, and promote performance improvement. KPI reports track the performance of specific business activities and objectives using these KPIs. They provide valuable insights on a company’s progress towards its goals and help identify areas for improvement, enabling businesses to make informed decisions and corrective actions when necessary.

The content of a KPI report can vary depending on the industry, company size, and specific goals of the business. However, most KPI reports include the following:

• Specific KPIs: These are the metrics that the business is tracking. They could be financial (like revenue or profit margin), customer-centric (like customer satisfaction or net promoter score), internal processes (like efficiency or productivity), or related to growth and innovation.
• Benchmark Data: This provides context for the KPIs, comparing current performance against past performance, industry standards, or competitor data.
• Visualizations: Graphs, charts, and other visual aids are often used to make the data easier to understand at a glance.
• Analysis and Interpretation: This section explains what the data means, why it matters, and what actions might be taken as a result.
• Action Plan: If the KPIs indicate that changes are needed, the report may include recommendations or an action plan.

9.   What are the Benefits of KPIs?

Implementing Key Performance Indicators (KPIs) offers numerous well-documented advantages. These encompass boosting employee engagement, aligning your team with the organization’s mission, and fostering improved accountability.

Beyond merely tracking and controlling performance, KPIs can bring the following advantages to your business:

Improves Employee Engagement

KPIs provide a clear understanding of what is expected from employees, by defining their roles and responsibilities in measurable terms. They help in setting performance standards and identifying areas for improvement. When employees know what they are working towards, and how their efforts contribute to the overall goals of the organization, it can significantly boost their engagement and motivation. Furthermore, KPIs offer a basis for providing constructive feedback and recognizing employee achievements, which can further enhance job satisfaction and engagement.

Connects Your Purpose and Culture

KPIs that align with your organization’s mission, vision, and values can help reinforce your company culture. They serve as a constant reminder of what the organization stands for and strives to achieve. By setting and pursuing KPIs that reflect your purpose, you can create a work environment where everyone understands and is committed to the organization’s core principles. This not only strengthens your company culture but also fosters a sense of unity and shared purpose among employees.

Makes Everyone Accountable for Performance

KPIs hold everyone in the organization accountable for achieving specific outcomes. They make it clear who is responsible for what, eliminating ambiguity and promoting responsibility. When individual or team performance is linked to specific KPIs, it creates a sense of accountability and ownership. This can foster a high-performance culture where everyone is focused on delivering results. Furthermore, by regularly monitoring and reviewing KPIs, you can ensure that everyone stays on track and any performance issues are promptly addressed.

10. What is the Difference Between a Key Performance Indicator and a Metric?

Key Performance Indicators (KPIs) and metrics are both forms of measurement used in business, but they serve distinct purposes and convey different kinds of information.

A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. KPIs are chosen to align with strategic goals and are used to gauge the performance of the company in reaching these goals. They are typically few in number and high in importance, acting as a compass guiding the organization towards its desired destination. For example, a KPI might be the growth rate of new customers acquired, reflecting a company’s strategic goal of expanding its customer base.

On the other hand, a metric is a broader term for any kind of measurement used to quantify the state or progress of a business process. Metrics can cover a wide range of data points across all areas of a business, not just those tied to strategic goals. They provide detailed information about operational performance and can be numerous and varied. For instance, a metric could be the number of website visitors, which gives insight into online traffic but may not be directly linked to a strategic objective.

So, while both KPIs and metrics help businesses assess performance, the main difference lies in their purpose and focus. KPIs are strategic, driving action towards key objectives, while metrics offer a more comprehensive view of overall performance without necessarily being tied to strategic outcomes.

11. What are the Benefits of Using KPI Software?

At a certain juncture, one might question the necessity of software when a spreadsheet appears to suffice. However, it’s important to recognize the limitations inherent in spreadsheets. They provide restricted data visualization options, such as pie charts and bar charts, and entail significant time and manual effort for report setup.

Spreadsheets demand consistent manual upkeep to ensure data remains current. In contrast, dashboard and reporting tools streamline data retrieval directly from the source, minimizing manual intervention. These tools prove invaluable for crafting specialized dashboards tailored to various needs, whether it be executive dashboards for high-level performance monitoring, marketing dashboards for tracking campaign outcomes, social media dashboards for analyzing engagement, or sales dashboards for monitoring sales performance.

Regardless of organizational size, Key Performance Indicator (KPI) software offers a myriad of benefits. Here are essential advantages worth noting.

Extensive Visualization Options

KPI software provides a wide array of visualization options that go beyond what’s possible with basic spreadsheets. These tools offer dashboards that can be customized with different types of charts, graphs, and even interactive elements. This allows you to visualize your data in ways that make the most sense for your specific needs. For example, you might use a heat map to visualize geographic data or a scatter plot to show the relationship between two variables. The visualizations can often be interactive, allowing you to drill down into specific data points for more detail. These advanced visualization capabilities can make it easier to spot trends and patterns at a glance.

Centralization of Data

Centralizing your data means bringing all your data together in one place. With KPI software, you can pull data from multiple sources—like your CRM, marketing automation tool, financial system, and more—and view it all together on one dashboard. This saves you from having to log into multiple systems and manually compile data, which can be time-consuming and error-prone. Plus, having all your data in one place makes it easier to compare and correlate different data sets, giving you deeper insights.

Real-Time Monitoring

Real-time monitoring is another significant advantage of KPI software. Instead of having to manually update your data and reports, the software can automatically refresh your data at set intervals. This means you can see up-to-the-minute data on your dashboard at any time. Real-time monitoring allows you to quickly spot any issues or opportunities, so you can react more swiftly. For instance, if you see a sudden drop in website traffic or sales, you can investigate immediately instead of waiting until the end of the month when you run your reports.

Scalability

KPI software is designed to scale with your business. As your company grows and your data needs become more complex, you can add new data sources, track more KPIs, and create additional dashboards as needed. Many KPI tools also offer features like user management and access controls, so you can easily manage who has access to what data as your team grows. This scalability means that investing in KPI software can benefit your business in the long term, not just the short term.

Integration with Existing Sources

Most KPI software can integrate with a wide variety of data sources. This includes common business tools like Salesforce for CRM data, Google Analytics for website data, and QuickBooks for financial data, among others. These integrations mean you can pull in data from the tools you’re already using without having to manually export and import data. Plus, by bringing all this data together, you can get a more holistic view of your business performance.

12. How to Create a KPI Dashboard

Creating a KPI dashboard is a multi-step process that involves careful planning and implementation. Here’s a step-by-step guide on how to do it:

Identify Your Key Performance Indicators (KPIs)

The first step in creating a KPI dashboard is to identify the KPIs that are most relevant to your business goals. These could include metrics related to sales, customer service, marketing, finance, or any other aspect of your business. The key is to choose KPIs that provide actionable insights and align with your strategic objectives.

Choose a KPI Dashboard Software

Next, you’ll need to choose a software platform for your KPI dashboard. There are many options available, ranging from simple spreadsheet-based solutions to sophisticated business intelligence tools. When choosing a software, consider factors like ease of use, customization options, integration capabilities, and cost.

Design Your Dashboard

Once you’ve chosen your software, you can start designing your dashboard. This involves deciding how to visually represent each KPI. Most dashboard software will offer a variety of visualization options, such as charts, graphs, and gauges. Aim for a design that is clean and intuitive, with the most important KPIs prominently displayed.

Integrate Your Data

After designing your dashboard, the next step is to integrate your data. This typically involves connecting your dashboard software to your various data sources, such as your CRM system, financial software, or marketing analytics tool. Most dashboard software will have built-in integrations or APIs to make this process easier.

Test and Refine Your Dashboard

Once your data is integrated, spend some time testing your dashboard. Check that all the data is displaying correctly and that the dashboard is easy to navigate. You may need to make some adjustments to the layout or visualizations based on your testing.

Share Your Dashboard

Finally, share your dashboard with the relevant stakeholders in your organization. This could include executives, managers, or any other team members who would benefit from the insights provided by your KPIs. Most dashboard software will have sharing features that allow you to easily distribute your dashboard to others.

Regularly Review and Update Your Dashboard

As your business evolves, so too should your KPI dashboard. Regularly review your KPIs to ensure they are still relevant and update your dashboard as needed. This might involve adding new KPIs, removing outdated ones, or adjusting your visualizations.

Final Thoughts

In conclusion, KPIs play a pivotal role in measuring and optimizing organizational performance. By identifying meaningful KPIs, establishing effective reporting mechanisms, and leveraging technology to facilitate data-driven decision-making, organizations can harness the power of KPIs to drive success and continuous improvement. By incorporating these practices, organizations can effectively harness the power of KPIs to steer their success and foster continuous improvement.

Remember, KPIs should be dynamic and evolve in response to changing business needs, ensuring they remain aligned with the organization’s strategic priorities.

Frequently asked questions

What are the limitations of kpis.

While KPIs are valuable for tracking performance, they do have limitations. They can overemphasize quantitative data, leading to neglect of qualitative factors. Misinterpretation of KPIs can lead to misguided strategies. Sole reliance on KPIs may provide a narrow view of performance. Lastly, there’s a risk of results manipulation to meet KPI targets.

What Are 5 of the Most Common KPIs?

Five common KPIs are:

• Sales Revenue
• Customer Acquisition Cost
• Employee Turnover Rate
• Customer Satisfaction Score

How Do You Measure KPIs?

Measuring KPIs involves several steps:

• Define your objectives.
• Identify relevant KPIs.
• Collect data using appropriate tools and methods.
• Analyze the data to understand performance.
• Based on the results, make necessary changes to improve performance

What does KPI stand for in sales?

In sales, KPI stands for Key Performance Indicator. Sales KPIs are metrics that measure the effectiveness and efficiency of a sales team or strategy.

Jennifer comes from a discipline of Operations, including Finance and Technology. Having worked in operational and financial management for more than fifteen years, Jen has a distinct set of skills and is known for complex analysis of operations, finance, and technology to improve core business strategies.

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60 KPI Examples In Business: Must Know Indicators

On this page:

• What is KPI? Characteristics of a good KPI.

60 essential KPI examples in a business:

• Digital marketing and website KPIs examples
• Sales manager KPI examples
• Social media KPI examples
• Finance KPIs
• Customer satisfaction KPI examples
• KPI for project manager examples
• Infographics in PDF

What is KPI? 

Key Performance Indicator (KPI) is a value that measures your performance. It helps you understand how your entire business or a concrete division is performing.

It shows how effectively your company is reaching its key business targets.

No matter, in which management level you are operating, you need to monitor your most important KPIs to ensure your team efforts are in the right direction.

“What gets measured gets improved.” This quote by Peter Drucker clearly sums the value of the KPIs.

However, to be effective and to help you improve your business profitability, KPI must have some critical characteristics. It must follow some rules for creating.

7 Key characteristics of the good KPIs:

• Measurable They should be measurable to analyze the positive or negative alternations from the target. You should also define what is being measured. For example, when it comes to sales, you may measure sales performance and how many new customers an employee brings in.
• Relevant It means KPIs should be assigned to the relevant manager or team that has the right expertise. This way the results will be more successful.
• Simple and clear KPIs should be so clear and simple that every user understands what exactly the KPI is measuring.
• Timely The KPI reports must be in the right frequency. Not too often and not too infrequently. Only this way the employees can make timely decisions while they aren’t overwhelmed with different types of data .
• Visible It is a must for KPIs to be visible across the organization. There are many data dashboard examples  with shareable and collaborative features. Visibility means the teams are more aware of everyday performance and thus can do an improved data-driven decision making .
• Actionable An effective KPI must answer a concrete question to support effective decisions.
• Achievable The more realistic a KPI is, the more likely you are to achieve it. Do not set unrealistic KPIs because they are one of the major team de-motivators.

So, let’s go to the KPI examples in a business.

The Most Important Digital Marketing And Website KPIs Examples

1. Click-Through Rate (CTR) – measures the number of clicks you get on your ads per number of impressions.

2. Cost Per Click (CPC) – shows the actual cost you pay for each click in your pay-per-click marketing campaigns.

3. Cost Per Action (CPA) – measures how much is your cost to attain a type of conversion (such as registration on your website).

4. Website traffic sources – this website KPI example relates to estimating which traffic sources bring visitors to your website. This helps you to define the most profitable marketing channels.

5. Social interactions – measure the levels of engagement with your social media posts and campaigns. Post engagement is the most important metric of your success on social media platforms. More for social media KPI, you can see below.

6. Email click rate –  shows who is truly engaged with your email content. Those who are truly engaged click on something in your email. There is a range of email data mining software tools that allow you to explore a large number of emails and shows you important KPIs.

7.   Keyword ranking – this is the most important KPI for SEO (Search Engine Optimization). Shows how your website is ranking in the search engines machines like Google, Bing, and Yahoo for particular keywords.

8. Landing page conversion rates – shows how many people are visiting each of your landing pages and how many of them are filling your lead capture forms.

9. Cost per lead – you should keep your lead acquisition costs relatively low so that you are able to hold good margins and achieve business growth.

10. Returning website visitors – indicate how efficient is your website at creating and maintaining an audience.

11. The rate of organic searches – what percentage of your traffic is coming from organic searches.

12.  The amount of mobile traffic – indicates how effectively your website is optimized for mobile devices like Smartphones and tablets.

13.  Average time on a website page – This KPI is vital for organic search traffic because Google ranks website pages based on their relevance.

14. Pages per visit – this digital marketing KPI shows whether your visitors bounce right after arriving at your website or they are interested in your content, stay longer, and read several of your pages.

15.  The number of backlinks to your website – These KPI examples show the number of quality links from other authoritative websites to your site. A critical indicator for building your website authority.

More on how to set digital marketing KPIs, you can read in the article “Choosing effective digital marketing KPIs” by Smart Insights here .

Top Sales Management KPI Examples In A Business

16.  New leads (Lead flow) – you can call it also new opportunities. This is the number of new leads that are arriving into your sales department each month/week. Ultimately, to increase sales what you need is more leads.

17.  Client acquisition rate  – indicates how many of the new prospects your reps bring convert to customers.

18.  Sales growth – measures your growth in sales over a particular period of time (month, week, year). By measuring the growth of your sales, you also measure the growth of your company.

19.  Product performance – If you are selling many products and there are targets for each product, it’s vital to track sales for each of them. This KPI ranks your products based on their revenue performance.

20.  Sales per sales representative /sales team – measure the performance of each of your sales representatives or sales teams.

21.  Average profit margin – this sales management KPI helps you evaluate the profit margins across your products or services.

22. Sales closing ratio – estimates the ratio between the number of quotes your sales reps sent out and the number of deals they managed to complete and close.

23. Sales target – this critical sales KPI shows the actual revenue vs the forecasted revenue. It allows you to find out if you are on the right path to reach your planned goals.

24. Customer acquisition cost – indicates all costs related to bringing a customer. Your final goal is to increase customer lifetime value and at the same time to cut customer acquisition cost. This way you can maintain a profitable business.

25. Customer lifetime value – the amount of money you can make from a customer over the lifetime of your relationship. The longer you keep customers that pay to you, the more money you’ll make.

26. Average sales cycle length – the goal of this KPI example is to shorten your average sales cycle length. The too long cycles can hurt your sales.

Top Social Media KPI Examples

27.  Share of voice  – the number of times your brand is mentioned in the various types of social platforms as compared to competitors.

28.  Average clicks per post – helpful to find out the type of content that your users are engaging with.

29. Social media followers – a great way to quickly understand where you stand on social platforms.

30.  Likes, shares, retweets – an important measure of the reach and engagement of your business when it comes to social presence.

31.  Subscriber by age and gender – knowing who is visiting your social profiles is practical. You should understand visitor and reader demographics such as gender, location, age, and etc. They can help you further in your market segmentation .

32.  Social sentiment – shows your brand perceptions by customers and shows brand equity. Advanced text analysis software tools allow businesses to understand the sentiment behind brand mentions, giving them the data they need to maintain the brand strategy on track.

33.  Goal conversion rate – social media is a great tool for driving non-revenue conversions such as white paper downloads or webinar registrations. Estimating the social conversion rate for achieving these goals helps you assess your success better.

34.  Website visits from social media – This is a valuable social media KPI that indicates the number of your fans that take the further step and visit your website. Bringing your fans to your website moves them closer to conversion or purchasing.

35.  New vs lost followers – this KPI compares the number of followers you have earned and those you’ve lost over a concrete period. Thereby, you can measure your followers’ growth.

Essential Finance KPI Examples in A Business

36 . Gross profit margin  = (revenue – cost of products sold)/revenue. This important financial KPI example shows whether you are pricing your products and services appropriately. As you know, your gross profit margin must be big enough to cover your fixed expenses and provide you with a profit.

37.  Net profit – this is the money you have after you’ve paid all the costs and bills. Net profit = total revenue – total expenses.

38.  Net profit margin – indicates the percentage of your revenue. The equation is: net profit margin = net profit/total revenue. This is one of the most tracked KPIs in finance. It tells how well your business does at turning revenue into profits.

39.  Current ratio  = your current assets / your current liabilities. Examples of your current liabilities are debt and account payables. Examples of current assets are cash, inventory and accounts receivables. This KPI tells your ability to pay your obligations in the short-term, mainly within the next 12 months. The final goal is to have a ratio higher than 1. A current ratio of below 1 means you don’t have enough cash to pay your bills.

40.  Accounts payable turnover ratio – indicates whether you are paying your expenses at an appropriate speed. Shows how fast you can pay off suppliers and other bills.

41.  Accounts receivable turnover – shows whether you are receiving your payments in a reasonable time. In other words, it tells how fast you get your payments owed and presents a business’s efficacy in extending credits.

42 . Return on assets (ROA) – indicates the efficiency of utilizing your business’s assets to earn a profit. It estimates how profitable your company is when it comes to your total assets. ROA = net income/ total assets.

43.   Return on equity (ROE) – measures the profit your business earn from your shareholder investments. ROE = net income (minus dividends to preferred stocks)/ shareholder’s equity (excluding preferred shares).

The Most Important Customer Satisfaction KPI Examples

44. Customer satisfaction score (CSAT) – this relates to directly asking your customers to rate their satisfaction with your brand, product, service or overall business. CSAT is the average of all your customer responses. CSAT typically consist of numbers, but it could also consist of smiley faces, stars, etc.

45.  Net promoter score (NPS) – tells you the number of your customers that like your brand enough to recommend it to other people. Ultimately, clients referrals are the best type of advertising any business.

46.  First response time – measures how quickly your company answers to your customers’ requests. Each customer wants a smooth and fast shopping experience. Otherwise, they will go to your competitors.

47.  Customer retention rate – measure your ability to keep a paying customer over a given period of time (week, month, year). Acquiring new customers can be much more expensive than to retain one.

48.  Customer satisfaction improvement – this KPI tracks changes and variations in customer satisfaction over a set period of time. If you’ve already had high levels of customer satisfaction and they’re remaining constant, then you’re on the right path.

49.  Average resolution time – measures how quickly you can resolve customer issues related to your products or services. The great customer service requires resolving issues quickly and professionally.

50. Brand attributes  – shows whether your customers view your brand and business the way you want them to. This customer satisfaction KPI use the words that clients use to describe your brand. By collecting this information from your customers, you can estimate customer service and understand where you stand in the customers’ eyes.

Top Project Management KPI Examples 

51.  Cycle time – it measures the time that your project needed to complete a certain task. This KPI is important for repeated tasks in a project.

52. Time spent – this is the amount of time that is spent on a given project by all team members. You can measure it also by each team member individually.

53 . Actual cost KPI – tells you how much money you have spent on a given project as to date. It consists of all the project-related costs you’ve spent to date.

54.  Project’s return on investment (ROI) – indicates whether the benefits of your project exceed its expenses.

55.  Budget variance – this is a critical project management KPI that tells you how much the actual budget differs from the planned budget.

56. Cost performance index (CPI)  = earned value / actual costs. It shows the efficiency that you gain when you’re using project funds. This KPI enables you to forecast future performance and better realize your funds to projects.

57.  Customer satisfaction/loyalty – measures whether the customer is satisfied with your project. This KPI is generally measured effectively by a simple survey.

58.  Number of errors – the number of issues and the things that need to be repaired during the project. This KPI affects budget revisions.

59.  Percentage of the task completed – defining the percentage of completed tasks gives you a quick overview of your project’s performance. You are able to find out in what phase your project actually stands.

60.  Resource utilization – helps you find out what are the limits of your project teams and provides a quick glance at your team’s work. This KPI measures how the time of team members is used when they are working on the project.

Download the following infographic in PDF

Every business is filled with complications. It is imperative to watch kye performance indicators on a daily basis to keep your performance on the track.

Not only they allow you to measure your targets and receive important information but also help you to understand when you need to improve your atmosphere of learning, to better online your marketing presence or to stimulate more your sales teams.

What are the most important KPIs you are tracking daily? Share your thoughts in the field below.

About The Author

Silvia Valcheva

Silvia Valcheva is a digital marketer with over a decade of experience creating content for the tech industry. She has a strong passion for writing about emerging software and technologies such as big data, AI (Artificial Intelligence), IoT (Internet of Things), process automation, etc.

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What Is A KPI? Definition & Examples

Published: Aug 28, 2024, 4:18pm

Reviewed By

Table of Contents

What is a key performance indicator (kpi), kpi vs. metrics, common types of kpis, how to set kpis, kpi best practices, kpi benefits, frequently asked questions (faqs).

All businesses, from startup coffee roasters to billion-dollar e-commerce companies, are vested in tracking their progress, figuring out what works and fixing what doesn’t. That’s where Key Performance Indicators (KPIs) come in. Once you’ve determined what your strategic goals are, using KPIs to measure those goals regularly allows you to make informed decisions and improve outcomes. Keep reading to learn more about KPIs, how to choose your indicators and the best practices for using them.

A Key Performance Indicator (KPI) is a measurable target that indicates how individuals or businesses are performing in terms of meeting their goals. Reviewing and evaluating KPIs helps organizations determine whether or not they are on track for hitting their desired objectives.

By looking at several key indicators, which may include categories such as profits, sales numbers, employee turnover and average annual expenses , businesses can identify successes, as well as what is not working. Analyzing KPIs on a regular basis provides a solid overview of how well a business is performing, which allows the folks in charge to decide if current operations should be continued, or if a change of strategy is needed.

Although they are both designed to measure performance, KPIs and metrics have different characteristics and are used by businesses in different ways. Metrics are measures used to track progress and evaluate success, while KPIs are metrics tied to specific goals during a certain period of time.

KPIs are designed to align with business goals and targets, while metrics evaluate the performance of particular processes. Metrics are usually specific to a particular person or team, and frequently align with industry standards or best practices.

What Makes a Good KPI?

The best plans use between five and seven KPIs to track and manage progress. The best structured KPI plans include each element of what is called “SMART” criteria:

• Specific: define what each KPI is intended to measure, and why it is important
• Measurable: KPIs should include standards for measurement
• Achievable: the KPI should be a realistic, achievable goal
• Relevant: KPIs are intended to move a business forward, so they need to be relevant to improving outcomes
• Time-bound: it’s important to set a realistic time frame based on past performance, and make sure that the team sticks to the agreed-upon deadlines

You’ll find KPIs across nearly every industry and category, including sales, marketing , customer service, IT, human resources and finance. Since these indicators are often responsible for driving performance goals and results, it’s important to choose the correct ones for your business. Opting for a smaller number of manageable KPIs per goal allows companies to make the necessary assessments and keep their workforce aligned.

These are some examples of commonly used KPIs:

Example of Sales KPIs:

• Monthly sales growth
• Monthly customers per sales rep
• Quarterly sales bookings
• Number of engaged leads in sales funnel
• Average conversion time

Example of Marketing KPIs:

• Monthly website traffic
• Page likes and comments
• Social media engagement rates
• Number of new monthly leads
• Click-through rate percentage

Example of Human Resources KPIs:

• Monthly overtime hours
• Quarterly training costs
• Cost per new hire
• Employee productivity
• Monthly absenteeism rate

Example of Customer Service KPIs:

• Customer satisfaction score
• Customer retention rate
• Monthly support ticket submissions
• Average resolution time
• Cost per resolution

You can’t begin using KPIs until you have clearly defined strategic goals; these are what will serve as the jumping-off point for deciding which indicators will be the most useful to your organization. Once your objectives are in place, the next step is to select the appropriate analytical and reporting tools, which are typically software programs designed specifically for your type of business.

Once you begin implementing KPIs, you will have a clearer picture of which indicators are useful and which ones may need to be adjusted. If the KPI you are using is not providing enough information, or the right type of information, it’s likely time to swap it for a different approach.

This will also be true as a business changes or grows, with the KPIs needing to provide different insights. The most effective KPIs are the ones that boost performance, demonstrate the success of a business and help move you closer to your goals.

Steps to Setting a KPI

KPIs should be set strategically, with defined objectives that correspond to a business’s desired outcomes and strategic goals. Remember to make KPIs measurable, specific and include a time frame. Here are the steps to setting up a KPI:

• Determine Key Objectives: Start by defining what the key objectives are, taking into account that KPIs should align teams with an organization’s goals.
• Define Intended Results: Once the objectives have been determined, define what the results need to be in order to achieve success.
• Utilize Lagging and Leading Indicators: Lagging indicators look at past performance variables, such as revenue and profit, to show the outcome of past performance. Leading indicators define what actions are needed to achieve goals and meet overall objectives.
• Set Targets and Thresholds: Setting targets and thresholds provides a way for teams to see exactly where they are and where they are going on a KPI objective time frame.
• Assess Progress and Readjust: KPIs will likely need to be adjusted as a project evolves, so assessing progress regularly illustrates any hiccups and helps keep the objective on track.

Using the wrong KPIs can lead to something as simple as wasted time, or as significant as an outcome that affects your bottom line. For example, if you manage a donut shop and want to know how many dozen are sold each day with an intended goal of reducing food waste, tracking a KPI such as average customer wait time won’t provide the measurements you need to meet your objective.

When choosing the KPIs to implement in your business, keep the following in mind:

• Choose indicators that are directly related to your objectives
• Think about lagging versus leading indicators
• Opt for realistic measurements that are attainable
• Pick a few, specific indicators instead of too many

There are many benefits associated with using KPIs, as they allow the proper resources to be allocated and channeled, ultimately improving performance. Some of the benefits include:

Real-time monitoring

Since KPIs are ongoing, managers are able to monitor team performance and progress in real time as a project unfolds. This allows adjustments to be made and necessary resources to be allocated in order to maximize productivity.

Help avoid delays

Using the KPI framework, teams can quickly view where each task stands on the timeline, allowing them to see what is on track and what might be stalled. This helps avoid delays since adjustments can be made as needed, helping to ensure completion of the objectives.

Easy to formulate

KPIs have the ability to be both simple and straightforward, making them easy to formulate. Because establishing KPIs is not a complicated process, it can be done by any type and size of business once they determine their goals.

Ensure equity and clarity

Using KPIs also means sharing objectives and providing transparency, which often leads to more invested team members. Empowering employees with the autonomy that KPIs provide means that everyone is aware of what is going on, who is responsible for what and that there is equity in success.

Bottom Line

KPIs are an important tool businesses use to evaluate achievements, analyze issues and solve problems. Performed regularly, these measurements illustrate trends and patterns that are essential to making the most informed decisions possible. When the right types and amounts of KPIs are used, these indicators provide the data that will help benefit the overall health of an organization.

What is a KPI?

A Key Performance Indicator (KPI) is a way to measure performance or progress based on specific business goals and objectives. These show organizations how well they are performing and meeting objectives, as well as the areas that need improvement.

Are KPIs and metrics the same thing?

KPIs are different from metrics, in that they measure performance based on calculated business goals instead of specific business activities. Metrics tend to be more operational, while KPIs are strategic.

What are the most common KPIs?

The KPIs a business chooses to use are based on its individual goals and objectives. Some of the most common measurements are financial, customer service, performance, marketing and staffing.

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Non-Profit Business Plan Example: Your Guide to Success

A well-structured business plan is crucial for the success and sustainability of any non-profit organization. Despite operating as non-commercial entities, non-profits require a formalized strategy to navigate their missions effectively.

Key reasons why a business plan is essential for non-profits include:

• Mission Definition: Clarifies the organization’s purpose and the impact it aims to achieve.
• Goal Setting: Helps in establishing clear, measurable objectives to guide the organization’s efforts.
• Community Value: Demonstrates how the non-profit adds value to the community it serves.
• Financial Planning: Ensures there is a strategy in place for sustainable funding and resource allocation.
• Operational Roadmap: Provides a step-by-step guide to implementing plans and initiatives.
• Stakeholder Communication: Enhances transparency and keeps donors, volunteers, and board members informed and engaged.

Developing a comprehensive business plan is not just about meticulous planning—it’s a vital tool that facilitates the mission-driven success of non-profits.

By the end of this article, you will understand the critical components of a non-profit business plan and how to effectively create one to propel your organization’s mission forward.

• Key Takeaway: The article provides an in-depth understanding of how a well-developed business plan can drive the success of non-profit organizations.

Executive Summary

The Executive Summary serves as an integral part of any financial model or business plan. Its primary purpose is to provide a concise yet comprehensive overview of the entire document, offering key insights into your business’s financial health, strategic goals, and essential metrics. This summary enables stakeholders, such as investors, partners, and decision-makers, to quickly grasp the most critical information without delving into the detailed aspects of the plan.

Mission Statement, Vision Statement, Objectives, and Strategies

To enhance readability and provide a clear structure, the essential components of this section, including the Mission Statement, Vision Statement, Objectives, and Strategies, are presented in the table below. This format ensures that each element is easily distinguishable and can be reviewed efficiently.

Using a table format allows for a quick comparison and better understanding of each facet of your business’s foundational principles. Investors and stakeholders will appreciate this clarity and efficient presentation of information. Remember, the clearer and more organized your Executive Summary, the more likely you are to leave a lasting positive impression.

Best Practice Advice

It is often easier to write the Executive Summary after completing the rest of the financial model or business plan. This approach ensures that you have all the necessary information compiled and can distill the most vital points into your summary effectively. Including the Executive Summary at the beginning of the document, yet writing it last, can streamline your process and help encapsulate all critical elements succinctly.

By structuring your Executive Summary in a clear, professional, and reader-friendly manner, you maximize the impact of your pitch or presentation. Stakeholders can quickly apprehend the essence of your business proposal, which increases your chances of success in financial planning, fundraising, and overall strategic decision-making.

Organizational Structure: Leadership Team, Board of Directors, and Staff

A solid organizational structure is pivotal for a non-profit’s credibility and operational efficacy. It ensures that every decision-making process is streamlined, responsibilities are clearly defined, and accountability is maintained across all levels of the organization. Furthermore, a well-structured organizational framework boosts the confidence of donors, stakeholders, and beneficiaries alike, reinforcing the non-profit’s mission and vision.

Leadership Team

The leadership team plays a crucial role in steering the organization towards its goals. The following table provides an overview of the key individuals in the leadership team:

The clarity in the designation of leadership roles ensures that each team member understands their specific responsibilities and contributions towards achieving the non-profit’s objectives. This clarity is essential for fostering teamwork and driving the organization forward.

Board of Directors

The Board of Directors is responsible for governance, strategic direction, and ensuring the organization’s accountability. Below is a table detailing the board members and their roles:

Having a diverse and well-informed Board of Directors is crucial for maintaining a balanced perspective on the organization’s strategies and activities. The board ensures that all operations align with the organization’s mission while promoting transparency and accountability.

The staff are the backbone of the non-profit, carrying out day-to-day operations and initiatives. Here is an overview of the main staff members:

Each staff member’s role is integral to the success of the non-profit’s mission. Clearly defined responsibilities help ensure operational efficiency and enable the organization to meet its goals effectively.

In conclusion, a strong organizational structure is essential for a non-profit’s success. It provides a clear framework for decision-making, enhances accountability, and ensures that all team members can contribute their best towards fulfilling the organization’s mission. A well-defined structure also helps in building trust and credibility among stakeholders, which is vital for securing support and ensuring long-term sustainability.

Our Programs and Services

At eFinancialModels, we offer a diverse range of programs and services specifically designed to meet the needs of entrepreneurs, investors, consultants, and finance professionals. Our offerings are aimed at facilitating comprehensive financial planning, effective fundraising, precise valuation, structured budgeting, informed investment, and detailed feasibility analysis. Below is a detailed breakdown of our programs and services, categorized for easier navigation.

Financial Model Templates

Our financial model templates are meticulously crafted to address various business scenarios and needs. These templates can significantly streamline your financial planning and analysis, saving both time and effort.

• Startup Financial Model Templates
• Investment Analysis Templates
• Financial Planning and Forecasting Templates
• Industry-Specific Financial Models
• Valuation Model Templates

These templates provide a robust foundation for creating detailed financial reports. They simplify complex financial calculations and projections, making the process more efficient and comprehensive. By utilizing our templates, users can ensure consistency, accuracy, and professionalism in their financial documentation.

Financial Modeling Services

Our financial modeling services are tailored to offer personalized support for various financial needs. These services are executed by experienced financial analysts and are customized to meet specific client requirements.

• Custom Financial Model Development
• Financial Model Review and Validation
• Financial Advisory and Consultancy
• Feasibility Studies and Reports
• Business Valuation Services

Our expertise ensures that clients receive precise, objective, and actionable financial insights. Whether it’s developing a new financial model, validating existing models, or providing consultancy on financial strategies, our services are designed to add significant value to our clients’ financial planning processes.

Training and Workshops

We recognize the growing demand for proficient financial modeling skills. Therefore, we regularly conduct training sessions and workshops to educate and empower finance professionals, entrepreneurs, and business owners.

• Basic to Advanced Financial Modeling Training
• Excel for Finance Professionals Workshops
• Industry-Specific Financial Modeling Courses
• Online and On-site Training Sessions

These training programs aim to equip participants with the knowledge and skills required to build and analyze financial models independently. Our workshops are led by experts who bring real-world experience and practical insights to the learning environment, ensuring that participants gain relevant and applicable skills.

Alignment of Programs with Objectives

Our range of programs and services are each designed with specific objectives in mind, ensuring a perfect alignment with client needs. The table below summarizes the objectives corresponding to each program and service we offer.

The alignment of our programs and services with their respective objectives allows our clients to select the best-fit solution for their needs. Whether you are an entrepreneur looking for a start-up financial model or an investor in need of detailed investment analysis templates, our offerings are designed to meet your specific requirements efficiently and effectively. This targeted approach not only enhances the relevance and applicability of our services but also ensures maximum value for our clients.

Target Audience, Key Competitors, and Market Trends

Target audience.

At eFinancialModels.com, our target audience encompasses a wide range of professionals who are in need of robust financial modeling solutions. Understanding the needs and specific requirements of each segment is imperative for delivering tailored and effective financial model templates and services.

• Entrepreneurs – Small business owners and startup founders looking for financial planning and fundraising solutions.
• Investors – Individuals and institutional investors requiring detailed valuations and investment analyses.
• Consultants – Professional consultants who need advanced financial models for feasibility analysis and strategic planning.
• Finance Professionals – Accountants, CFOs, and financial analysts seeking tools for budgeting, forecasting, and financial management.

Our diverse target audience enables us to cater to a broad spectrum of financial modeling needs, ensuring that each group receives templates customized to their unique requirements and objectives. This approach enhances user satisfaction and positions us as a versatile resource for financial planning solutions.

Key Competitors

Understanding our key competitors is crucial for staying ahead in the market and continuously improving our offerings. Here are some main competitors in the financial modeling domain:

• Template Providers – Companies that offer a wide range of generic financial model templates.
• Financial Software Companies – Firms that specialize in financial planning and analysis software solutions.
• Consulting Firms – Professionals and agencies providing bespoke financial modeling consulting services.
• Freelancers – Independent financial modelers offering customized spreadsheet solutions.

By closely monitoring our competitors’ activities and continuously innovating our templates and services, we aim to stay ahead in the marketplace. Our commitment to quality and customization sets us apart from other providers.

Market Trends

Keeping up with market trends is vital for adapting to the changing landscape of financial modeling. The following table visualizes key market trends over the past few years, sourced from a reliable environmental sustainability report:

Understanding these market trends helps us align our product development with the current and future needs of the financial modeling industry. By doing so, we ensure that our templates remain relevant, innovative, and effective for our diverse user base.

Marketing and Outreach Strategies for Non-profits

A comprehensive marketing and outreach strategy is crucial for non-profits to enhance their visibility and maximize their impact. By effectively engaging with their audience, these organizations can better achieve their mission and goals. Below, we delve into specific strategies for Digital Marketing, Community Engagement, and Media Outreach, detailing their goals and expected outcomes.

Digital Marketing

Digital marketing is essential for non-profits to reach a broad audience, attract donors, and engage with volunteers. The key initiatives in digital marketing encompass various channels and techniques. Here are the main strategies and their respective objectives:

• Search Engine Optimization (SEO): Improve website visibility on search engines to attract organic traffic.
• Content Marketing: Create and distribute valuable content to attract and engage the target audience.
• Social Media Marketing: Build and nurture a community on social media platforms to increase awareness and engagement.
• Email Marketing: Develop personalized email campaigns to maintain donor relationships and drive donations.
• Pay-Per-Click (PPC) Advertising: Use paid advertising to target specific demographics and increase website traffic.

Digital marketing strategies enable non-profits to effectively communicate their mission, drive website traffic, and convert visitors into supporters. By implementing these strategies, organizations can expand their reach and foster a more engaged community.

Community Engagement

Engaging with the community is fundamental for non-profits to build strong relationships and encourage active participation. The following are critical community engagement initiatives with their associated goals:

• Workshops and Seminars: Provide educational opportunities to engage and inform the community.
• Volunteer Programs: Create meaningful volunteer opportunities to increase involvement and support.
• Partnerships: Collaborate with local businesses and organizations to extend the non-profit’s reach.
• Community Events: Host events to bring people together and raise awareness of the non-profit’s cause.
• Feedback Mechanisms: Implement platforms for community feedback and suggestions to improve services and engagement.

Community engagement strategies foster a sense of belonging and ownership among community members. By actively involving the community, non-profits can create a supportive and dynamic network that strengthens their operations and outreach efforts.

Media Outreach

Effective media outreach is vital for non-profits to gain public attention and credibility. Here are strategic initiatives to achieve media outreach goals:

• Press Releases: Disseminate newsworthy information to media outlets to generate coverage.
• Media Partnerships: Forge alliances with media organizations for consistent and broad coverage.
• Public Relations Campaigns: Run campaigns to enhance the non-profit’s public image and reputation.
• Guest Articles and Op-eds: Contribute thought leadership pieces to reputable publications.
• Media Kits: Develop comprehensive media kits to provide essential information to journalists.

Media outreach initiatives are instrumental in amplifying the non-profit’s voice and mission. By collaborating with media outlets and presenting a strong public image, non-profits can attract more supporters, donors, and volunteers.

Aligning Marketing Initiatives with Goals and Outcomes

The table below aligns specific marketing initiatives with their goals and expected outcomes, providing a clear view of the strategic impact:

This table helps visualize the connection between marketing initiatives and their outcomes, allowing non-profits to strategize more effectively. By aligning their efforts with specific goals, non-profits can better measure their success and adjust their strategies accordingly. This holistic approach ensures that every marketing and outreach effort contributes towards the overall mission and vision of the organization.

Effective Fundraising Strategies and Financial Planning for Non-Profits

Effective fundraising is the lifeblood of any non-profit organization. Without the proper funds, it becomes impossible to carry out vital programs, meet operational costs, and expand organizational impact. Equally important is meticulous financial planning, which ensures that every dollar raised is managed wisely to achieve maximum benefit. A well-rounded approach to fundraising and financial planning can be instrumental in securing long-term sustainability and advancing the mission of your non-profit.

Fundraising Strategies

To achieve a diverse and stable funding base, it is essential to deploy multiple fundraising strategies. These efforts can be broadly categorized into grants, donations, and events. Each type of fundraising has its unique advantages and requires tailored approaches. Below are detailed strategies for each type of fundraising:

• Identify potential grant opportunities from government agencies, private foundations, and corporate sponsorships.
• Develop a comprehensive grant proposal that clearly outlines your project or program’s objectives, methodologies, and expected outcomes.
• Maintain regular communication with grant providers to build relationships and ensure compliance with their reporting requirements.
• Measure and document the impact of grant-funded programs to strengthen future grant applications.

Grants are often a cornerstone for non-profits, providing substantial funding that can support large-scale projects and initiatives. By focusing on thorough research and relationship-building, organizations can tap into significant resources that can greatly enhance their operational capabilities.

• Create a compelling donation appeal that connects donors emotionally to your cause.
• Utilize online platforms and social media to expand your donation reach and engage with potential supporters.
• Implement a donor recognition program to show appreciation and maintain donor loyalty.
• Provide transparent reporting on how donated funds are being utilized to encourage trust and repeated giving.

Donations often form the backbone of a non-profit’s revenue. Effective communication, transparency, and continuous engagement with donors can help sustain and grow this vital funding source.

• Plan and organize fundraising events such as galas, auctions, or charity runs that attract community involvement.
• Promote your events through various channels, including social media, local media, and partnerships with other organizations.
• Secure sponsorships to cover event costs, ensuring that a larger portion of the proceeds directly supports your mission.
• Follow up with event attendees to thank them and provide information on future involvement opportunities.

Events are not only fundraising mechanisms but also platforms for raising awareness and building community support. By organizing well-promoted and engaging events, non-profits can create lasting connections with supporters and increase their visibility.

Projected Financial Data: Income and Expenses

To ensure the financial health of a non-profit, it is necessary to project and regularly review financial data, including income and expenses. The following table provides an illustrative example of a projected financial statement:

The above table is a simplified projection, but breaking down income and expenses can help organizations gain a clear understanding of their financial position. Analyzing these figures allows non-profits to make informed decisions, identify funding gaps, and adjust strategies as needed. Furthermore, regular financial review ensures accountability to stakeholders and supports effective planning for long-term sustainability.

Key Performance Indicators and Evaluation Methods

Measuring impact is crucial for demonstrating accountability and effectiveness in financial planning and analysis. By clearly defining Key Performance Indicators (KPIs) and aligning them with appropriate evaluation methods, businesses can ensure they are on track to meet their strategic goals. This section will break down KPIs and their corresponding evaluation methods into detailed bullet points and illustrate them with tables for a clear understanding.

Key Performance Indicators (KPIs)

Key Performance Indicators are essential metrics used to quantify how well an organization is achieving its business objectives. Below is a breakdown of some important KPIs relevant to financial modeling and planning:

• Revenue Growth Rate
• Net Profit Margin
• Customer Acquisition Cost (CAC)
• Customer Lifetime Value (CLTV)
• Operating Cash Flow
• Return on Investment (ROI)
• Debt-to-Equity Ratio
• Gross Margin
• Employee Productivity

Each of these KPIs provides a unique insight into various aspects of a business’s health and performance. Revenue Growth Rate, for instance, indicates the pace at which a company is expanding, while Customer Acquisition Cost (CAC) reveals the efficiency of marketing strategies. Regularly tracking these KPIs helps businesses make informed decisions and strategize effectively.

Evaluation Methods for KPIs

With the KPIs identified, the next step is to determine how to evaluate them effectively. Here are some common evaluation methods used to monitor these KPIs:

• Trend Analysis
• Benchmarking Against Industry Standards
• Variance Analysis
• Ratio Analysis
• Financial Modeling and Forecasting
• Scenario Planning
• Comparative Analysis
• Internal Audits
• Customer Feedback and Surveys
• Competitor Analysis

These evaluation methods provide various lenses through which businesses can analyze their performance. For example, Trend Analysis helps in understanding performance over time, while Comparative Analysis allows companies to measure their progress against competitors. Employing a combination of these methods can lead to a comprehensive evaluation of business performance.

KPIs and Evaluation Methods Alignment Table

The table below aligns the Key Performance Indicators with their respective evaluation methods across projected timelines. This approach ensures clarity in tracking and evaluating each KPI over specific periods.

Aligning KPIs with specific evaluation methods across projected timelines makes it easier for teams to focus on targeted analyses and reviews. For instance, analyzing the Revenue Growth Rate monthly or quarterly enables timely interventions, while monitoring Customer Lifetime Value (CLTV) annually can guide long-term strategic plans. This structured approach not only ensures regular performance reviews but also aids in achieving overarching business objectives.

Essential Takeaways for Creating an Effective Business Plan for Non-Profits

Creating a business plan for a non-profit organization requires careful consideration and strategic planning. To help you focus on the key aspects of a successful business plan, here are the core takeaways:

• Purpose and Mission: Clearly define the purpose and mission of your non-profit. This helps in establishing a strong foundation and communicates the organization’s objectives effectively.
• Market Analysis: Conduct thorough market research to understand the needs and gaps your non-profit aims to address. Analyze your target audience and evaluate your competition to gain insights into potential opportunities and challenges.
• Programs and Services: Detail the programs and services that your non-profit intends to offer. Explain how these initiatives align with your mission and how they will create a positive impact.
• Marketing and Outreach Strategy: Outline a comprehensive marketing and outreach plan to raise awareness and attract supporters. Include strategies for digital marketing, community engagement, and partnerships.
• Funding and Financial Projections: Develop a robust financial plan that includes funding sources, budget forecasts, and financial sustainability strategies. This will ensure that your non-profit can maintain and grow its operations.
• Organizational Structure: Define the organizational structure, including key team members, their roles, and responsibilities. This helps in ensuring that your non-profit is well-managed and operates efficiently.

Each of these points plays a crucial role in forming a comprehensive business plan for your non-profit. By paying attention to these elements, you can create a roadmap that guides your organization towards achieving its goals and making a meaningful impact in the community.

Creating a tailored business plan specific to your non-profit is essential for translating your vision into actionable steps. This personalized approach helps in addressing the unique challenges and opportunities faced by your organization, thereby increasing the likelihood of success. Do not hesitate to invest time and effort into crafting a detailed and well-thought-out business plan.

Frequently Asked Questions (FAQs)

In this section, we address some of the most frequently asked questions (FAQs) to assist our users in navigating specific concerns related to our financial modeling templates and services. Our goal is to provide clear and concise answers to help you understand our offerings better.

What Types of Financial Models Do You Offer?

We provide a comprehensive selection of financial model templates tailored to various needs, including:

• Budgeting and Forecasting Models
• Valuation Models
• Fundraising Models
• Investment Analysis Models
• Feasibility Study Models

Who Can Benefit from Using Your Financial Model Templates?

Our financial model templates are designed to serve a diverse range of users, including:

• Entrepreneurs
• Consultants
• Finance Professionals

Can I Customize the Financial Model Templates?

Yes, our templates are fully customizable. You can adjust assumptions and parameters to better suit your specific needs, and modify the formatting to align with your personal or organizational preferences.

Do You Offer Support for Using the Templates?

Absolutely. We provide extensive support for using our templates, including:

• Detailed user guides
• Email support
• Consulting services for more complex customization

How Do I Decide Which Financial Model Is Right for My Needs?

Choosing the right financial model depends on your specific goals and circumstances. Consider the following factors:

• The purpose of your financial analysis (e.g., budgeting, fundraising, valuation)
• The industry you operate in
• The size and complexity of your business
• Your familiarity with financial modeling

If you’re still unsure, our consulting services are available to help guide you to the most suitable model for your needs.

We hope this FAQ section clarifies some of the common queries about our financial model templates. Each question and answer are carefully crafted to provide you with the best understanding and to address typical concerns. If you have any further questions, do not hesitate to contact us for more detailed support.

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