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key Performance Indicator(KPIs) – Importance, Advantages and More

Key Performance Indicators(KPIs)

Key Performance Indicator (KPIs) is a primary performance measure used to track goals and quantify results. A KPI, an acronym from the English phrase key performance indicator (key performance indicator), is a quantitative metric that shows how your team or company is progressing toward your most important business goals. So companies use KPIs at various levels. You can set company-wide, team-specific, or individual KPIs, depending on the metrics you want to track. A good KPI can give you an idea of ​​whether you are on the right track to achieving your strategic goals.


Importance of KPIs

Key performance indicators shed light on a company’s performance. Without KPIs, it would be difficult for company leaders to meaningfully assess and then make operational changes to address performance issues. Therefore keeping employees focused on business initiatives and tasks critical to the organization’s success can be difficult without KPIs to reinforce the importance and value of those activities. In addition to highlighting business successes or problems based on current and historical performance measurements, KPIs can point to future results, giving executives early warning of potential business problems or maximizing return on investment. Can provide initial guidance on opportunities. Armed with such information, they can proactively manage business operations, potentially gaining a competitive advantage over less data-driven competitors.

Advantages Of Measuring Key Performance Indicators (KPIs)

Here we show you the benefits of measuring KPIs:

  • Track your customer interactions throughout the buyer’s journey.
  • Improve your campaigns and future measurement plans.
  • Report your goals and results.
  • Troubleshoot your website performance and more.

Here are some examples of the KPIs that are often tracked in the pillars of digital marketing:

Site performance/user experience (UX)

  • New visitors versus repeat visitors.
  • Pages per visit.
  • The total views of the page.
  • Bounce rate.
  • The average duration of the session.

Search engine optimization (SEO).

  • Clicks
  • Click Through Rate (CTR).
  • Organic search traffic.
  • Referred traffic.

Social networks

  • I like it
  • shared
  • Comments
  • Mentions
  • reach


  • The conversion rate of potential customers.
  • The cost per potential customer.
  • The price per acquisition.
  • The cost of customer acquisition.
  • The value of a customer for life.

KPI Type

KPIs that quantity the results of business activities, such as periodical revenue and revenue growth. So it’s called a lagging indicator. Because it will follow what happened. Therefore comparing KPIs announcing upcoming business developments—for example, Booking sales that will generate revenue in future quarters—are called leading indicators.

There is also a distinction between numerical quantitative and qualitative metrics that are more abstract and open to interpretation, such as evaluating user experience with the product or on the website. For qualitative indicators, identifying useful KPIs can be challenging. Therefore choosing the right one depends on the organization’s ability to measure it in some way. For example, the percentage of wild transactions in an online shopping cart could indicate the customer experience on a retail website.

From a functional perspective, KPIs cover financial, marketing, sales, customer service, manufacturing, and also supply chain metrics. KPIs can also track presentation metrics related to internal processes such as HR and IT operations.

How to Measure KPIs

Without comparative marketing efforts, it is more challenging to measure success. So follow these five steps to measure KPIs:

1. Set business goals

Before you continue the process of data collection and KPI analysis, you should have a plan to measure your performance in defining your business goals. So these may include growing your brand awareness, increasing your social media presence, or improving your conversion rates.

2. Choose your marketing strategy

Your marketing strategy, as well as the techniques and tools that you use, will not only help you achieve your goals but also influence the KPIs that you use to monitor performance. For example, if you want to use social media marketing as one of your networks, use the model KPIs listed below.

3. Select key performance indicators

To avoid info overload, choose, monitor and report a certain number of KPIs. So these KPIs will line up with your business goals. Therefore, you will know if you are meeting your objectives.

4. Organize and segment your data

Various analytics tools provide a way to section data to make it easier to assess changes in KPIs and determine their causes. Examples of segments include operating or device systems and user characteristics.


KPI targets help you set and achieve measurable goals in a company. Before you start, ensure you have a clear goal or strategic plan you want to accomplish with this KPI or the set of KPIs you define. Once you have described your KPI, share it with the key project stakeholders. It also shares real-time updates so that everyone can stay informed on progress.

Also Read: What is App Development?

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