What is a KPI?
A KPI, or key performance indicator, is a measurable value that shows how well you're progressing toward a specific business goal. Unlike general metrics, a KPI is chosen because it reflects an objective you care about.
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KPI versus metric
Every KPI is a metric, but not every metric is a KPI. Page views and impressions are metrics, and they become KPIs only when they directly measure progress on a goal.
How to choose KPIs
Start with the business goal, such as more qualified leads or higher revenue. Then choose the few measures that show progress, ideally including both leading indicators, which move early, and lagging ones, such as revenue.
Each KPI needs a clear definition, a data source, a target, and an owner. Without these, people can argue about what the number means.
Common marketing KPIs
Examples include conversion rate, cost per lead, CAC, ROAS, pipeline, and revenue. The right ones depend on your goals and business model.
Common questions
What does KPI stand for?
KPI stands for key performance indicator. It's a number used to track progress toward an important goal.
How many KPIs should you track?
Fewer is usually better. A small set that people understand and act on is more useful than a long list that no one reviews.
What is the difference between a KPI and an OKR?
A KPI tracks ongoing performance, while an OKR sets an ambitious objective with key results to reach in a set period. KPIs can serve as the key results in an OKR.
What makes a good KPI?
It's tied to a goal, clearly defined, measurable, and something your team can influence. It should also lead to a decision when it changes.
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