Key Performance Indicators, or KPIs, is very common in businesses. KPIs allow us to measure how well an organization performs in relation to strategic goals. Whether you have a company, business units, or projects, KPIs are very important in tracking your performance information. Organizations, or their stakeholders, are able to understand how your company is doing in regard to your objectives. Hence, KPI is really a “key performance indicator” for your business.

KPIs also help with decision-making. You may have heard of marketing metrics in relation to KPIs. However, it is important to note that not all marketing metrics are KPIs. KPIs are navigational tools that simplify organizational performance. The following article will discuss KPIs and how to determine which KPIs are the most important for your business.

What are KPIs?

If you are familiar with KPIs, you may have a general understanding of what exactly they are. Key Performance Indicators are measurable values that show the effectiveness and performance of a company. In other words, KPIs portray how well a company achieves their business objectives. There are several KPIs to choose from, including high-level and low-level KPIs. High-level KPIs are associated with the overall performance level of a business, whereas low-level KPIs are concerned with the specific processes or individuals in sales, marketing, and a call center.

According to Klipfolio, revealing the definition of KPIs involves asking certain questions. These questions include asking yourself what is the overall desired outcome of your company. Ask yourself: What is the main objective? How am I going to measure the progress of my business? By asking questions, you can focus on what matters and how to choose the right KPI for you and your company. One example is that if you are interested in increasing your sales revenue, you will name the Key Performance Indicator as “Sales Growth KPI.”

Time and effort are necessary for a successful experience with KPIs. KPIs are important if you make them important. With communication and hard work KPIs can be very useful and valuable for your business.

The Most Important KPIs

Before you decide which KPI is best for you and your company, it is important to set the goal or objective. By settling on a key business objective, you can begin planning and making a strategy. KPIs help during the planning process and keep the business focused on achieving the goal you previously set.

Determining which KPI is best and most important for you depend on what your goals are. There are specifically two different types of KPIs: Business KPIs and Department/Function Specific KPIs. Department/Function Specific KPIs are also categorized under External and Internal KPIs. A good KPI is described as having several characteristics, such as being measurable, effective, relevant, useful, and available. By understanding the five important traits of a good KPI you can more easily distinguish which KPI is right for your company.


A good KPI involves being measurable. If a metric is unavailable, then it is impossible to use it as a KPI. When you are looking for your KPIs make sure that there is a tool to measure and track your progress. KPIs can be read in the form of numbers. Their quantitative characteristic is important during the process of tracking and noting your company’s performance.


Effectiveness is very important, especially in business. KPIs should be effective when it comes to highly impacting its corresponding goal or goals. On the other hand, if a metric does not impact its goal, then it is not a good KPI.


In addition to being effective, your KPI needs to be relevant to its corresponding goal. Relevance and effectiveness go hand-in-hand. Your KPI can be highly effective and impacting, but it may lack relevance to the goal.


Evidently, it is important for KPIs to be useful. KPIs need to not only be useful, but instantly available. Acting quickly helps a business thrive, which is why it is important to be able to act instantly with the information provided by your KPI.


Similar to being immediately useful, KPIs should be easily available for you. The availability of your KPI should allow to access it in a timely manner in order to make quicker decisions. If it takes months to compute a KPI a couple times, it is not timely and is therefore not a good KPI.

For more information and a list of examples of KPIs, visit Optimize Smart. Gross Profit, Goal Conversion Rate, Sales Growth Rate, and Operating Profit are a few examples of KPIs. KPIs are important because they can help manage your business by focusing on your organization’s goal.

As a writer and a poet, Alexandra finds that words have the power to connect people from around the world.