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What are Kpis? Definition

What are Kpis? Definition

KPIs, or key performance indicators, are a type of metric used to measure and track progress towards specific business goals. They provide insight into whether or not a company is on track to meet its targets, and can be used to identify areas of improvement. There are many different types of KPIs, and the ones that are most relevant to a company will depend on its industry, size, and objectives. So, what exactly are KPIs? In this blog post, we’ll explore the definition of KPIs and some examples to help you better understand how they can be used in your business.

What are Kpis?

In business, KPIs (Key Performance Indicators) are specific, measurable values that indicate whether progress is being made toward organizational goals.

There are many different types of KPIs that can be used to measure progress in different areas of business. Some common examples include:

Sales KPIs: Revenue, conversion rate, average order value
Marketing KPIs: Website traffic, leads generated, social media engagement
-Customer service KPIs: First contact resolution rate, customer satisfaction score

The important thing to remember with KPIs is that they should be aligned with your company’s overall goals and objectives. That way, you can use them to gauge whether or not you’re on track to achieving your desired results.

The Different Types of Kpis

There are three different types of KPIs: leading, lagging, and environmental.

Leading indicators are those that can predict future performance. For example, if you’re trying to increase sales, a leading indicator could be the number of new leads generated.

Lagging indicators show past performance and are often used as a benchmark. For example, if you want to decrease employee turnover, a lagging indicator would be the percentage of employees who have left in the past year.

Environmental indicators track external factors that can impact your business. For example, if you’re trying to increase web traffic, an environmental indicator would be the number of people searching for your keywords on Google.

The Benefits of Using Kpis

There are numerous benefits to using KPIs in your business. Perhaps the most obvious is that they can help you measure progress and identify areas of improvement. By establishing KPIs, you can track whether you are making progress towards your goals and objectives. In addition, KPIs can also help you benchmark your performance against others in your industry. This allows you to see how well you are doing relative to your competitors and make necessary adjustments to stay ahead of the curve.

Another benefit of using KPIs is that they can help you focus on the most important aspects of your business. With so many different moving parts, it can be easy to lose sight of what is truly important. By identifying and tracking KPIs, you can ensure that you remain focused on the areas that will have the greatest impact on your bottom line.

Finally, using KPIs can also help you improve communication within your organization. When everyone understands what is being measured and why, they can be more effective in their roles. Furthermore, tracking KPIs can help expose areas of potential conflict so that they can be addressed before they cause major problems.

In short, there are many reasons to use KPIs in your business. They can help you measure progress, identify areas for improvement, benchmark your performance against others, focus on the most important aspects of your business, and improve communication within your organization.

How to Create Effective Kpis

There is no exact science to creating effective KPIs, but there are some best practices that should be followed to ensure they are as useful as possible. Here are some tips for creating effective KPIs:

1. Make sure KPIs are aligned with business objectives. This seems like a no-brainer, but it’s important to make sure your KPIs are actually measuring something that is important to the success of your business.

2. Keep them simple. Avoid using jargon and technical terms that not everyone in your organization will understand. The goal is to create KPIs that can be easily understood and interpreted by all.

3. Make them actionable. In other words, don’t just create KPIs for the sake of having them – make sure they can be used to drive decision making and improve performance.

4. Make them measurable. This ties in with making them actionable – if a KPI can’t be measured, it’s not going to be very useful in terms of improving performance.

5. Make sure they are reviewed regularly. KPIs should not be set and forgotten – they should be reviewed on a regular basis to ensure they are still relevant and useful.

Kpi Examples

There are a variety of ways to measure success, and the KPIs you choose should be based on what’s important to your business. To get started, here are a few examples of KPIs that can be used in different industries:

Sales KPIs
Average order value
New customers
Customer churn rate

Marketing KPIs
Website traffic
Leads generated
Cost per lead
Conversion rate

Operational KPIs Employee satisfaction score
Customer satisfaction score
First call resolution rate
Average handle time

IT KPIs Service desk ticket volume
Mean time to repair (MTTR)
IT asset utilization

Manufacturing KPIs Production throughput rate
Scrap rate
On-time delivery percentage


KPIs are an important metric for businesses to track in order to gauge their success. By understanding what KPIs are and how to track them, businesses can ensure that they are on the right track and making the most of their resources. We hope this article has helped you understand KPIs a little better and given you some ideas on how to implement them in your own business.

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