A KPI (Key Performance Indicator) is a quantifiable measure chosen to track progress toward an important business goal, such as revenue growth, retention or response time.
Why it matters
Without agreed measures, teams argue from opinion. A small set of KPIs focuses attention on what matters and shows early when something is off. Good KPIs are tied to a goal, measured consistently and owned by someone who can act on them. Review KPIs on a regular schedule, such as weekly or monthly, and retire any that no longer drive decisions. A KPI nobody acts on is just a number on a dashboard.
Example
Goal: keep customers longer. KPI: 90-day retention rate, measured as users still active after 90 days divided by users who signed up. If 400 of 1,000 are still active, the KPI is 40 percent, and the team sets a target of 50 percent for next quarter.
Common mistakes
- Tracking dozens of metrics so none gets attention.
- Choosing vanity numbers, such as page views, that do not link to a goal.
- Setting a target without a deadline or an owner.
Related
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