Key Performance Indicator (KPI)

Showing KPIs to stakeholder

What are KPIs?

A key performance indicator (KPI) is a measurable value that illustrates how effectively a company is performing towards key business objectives. Organizations use KPIs to monitor their success at reaching targets.

KPIs help evaluate a company’s progress in accomplishing key objectives. These metrics are used at all levels, helping executives, managers, and employees identify where improvements can be made. KPIs lead to better decisions and more effective goal execution. The most essential KPI is revenue, but many others can be used based on a company’s goals.

KPIs must be selected so that they align with a company’s strategy and goals. They also need to be relevant to the industry, department, team, and skillset of the individual employee.

KPIs are wonderful tools, but only when quantifiable goals are set in advance. This is where objectives and key results (OKRs) are beneficial. OKRs are an essential tool for defining goals. Different companies and departments will use a different set of OKRs and KPIs to measure success. 

OKRs vs KPIs: Learn more about the difference between OKRs and KPIs

While KPIs evaluate success, there is no one-size-fits-all. For example, a sales team might set a goal to increase its productivity. In this case, its KPIs might look something like this:

  • KPI (1): Sales revenue

  • KPI (2): Win ratio

  • KPI (3): Average deal size

If the sales revenue (KPI 1) is high and the win ratio (KPI 2) is high, but the average deal size (KPI 3) is too low, this last area may require more managerial commitment.

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KPI examples

Below are some KPI examples based on more senior roles to give you an idea of what KPIs can be for different departments or teams. 

Sales KPIs

  • Sales

  • Win ratio

  • Subscriptions

Marketing KPIs

  • Qualified leads

  • Conversion rate

  • Social media followers

Public relations KPIs

  • Web coverage

  • News coverage

  • Share of voice

Online marketing KPIs

  • Average cost per lead (CPL)

  • Number of conversions

  • PPC or AdWord CTR

  • Website or landing page conversion rate

Content marketing KPIs

  • Recurring visitors

  • Blog comments

  • Blog shares

Partner marketing KPIs

  • Partner-generated revenue

  • ROI per partner

  • Partner market share

Human resources KPIs

  • Employee satisfaction index

  • SCR (salary competitiveness ratio)

  • Retention rate

Engineering KPIs

  • Sprint points

  • Progress vs. schedule (deadlines successfully met?)

  • P-O or P-1 active bugs in production

  • Rework

  • Architecture improvements

Quality assurance KPIs

  • Number of P-0 or P-1 bugs in product

  • Covered project requirements

  • Passed tests

Product management KPIs

  • Product engagement rate

  • Customer NPS from product feedback

  • Customer retention

  • Customer complaints

Customer success KPIs

  • Customer NPS score

  • Customer satisfaction (CSAT) score

  • Customer retention rate

  • Customer churn

Customer support KPIs

  • Average response time

  • Average resolution time

  • Incident rate

Customer retention KPIs

Finance KPIs

  • Working capital

  • Operating cash flow

  • Payroll headcount ratio

Operations KPIs

  • Labor utilization (employee ROI)

  • Project schedule variance (missed deadlines)

  • Rework (work that had to be done again)

Choosing your KPIs

Having numbers, graphs, and charts will give your team cred, but it's not worth it if you end up wasting a bunch of time to get the data.

The first step in avoiding this is making sure you're measuring what matters. If you're collecting data just for the sake of having more graphs, then ditch that KPI or trade it out for something that will actually help your team be more cost or time efficient or improve the quality of your deliverables.

Utilizing KPIs 

Start measuring the right key performance indicators (if you aren't already) so you can show your company that you and your team are an invaluable and integral part of the success of the business, and to ensure that work stays in your hands.