Key Performance Indicator
A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity in which it engages. Often, success is measured in terms of meeting predetermined goals and objectives.
The term “key performance indicator” originated in the business world, but its concepts can be applied to any type of goal. In fact, you may already be using KPIs without realizing it. For example, if you are trying to lose weight, the number on the scale is a KPI.
There are two types of KPIs: leading and lagging. Leading indicators are those that show whether or not you are on track to reach your goals. Lagging indicators show whether or not you have actually reached your goals.
Some examples of leading indicators might include:
– The number of new customers acquired in a period of time
– The number of sales leads generated in a period of time
– The amount of traffic to your website in a period of time
And some examples of lagging indicators might include:
– Sales revenue for a period of time
– The percentage of customer complaints that were resolved within a certain timeframe
– Employee turnover rate for a period of time