KPI is an abbreviation for Key Performance Indicators, which means “key performance indicators”in English. Performance indicators are components of a strategic plan that a company plans to implement over a certain period of time. In other words, a KPI is a reflection of a result that can be quantified.

Thanks to Key Performance Indicators, an organization can assess how close or, conversely, far it is from the goal facing it. The development or promotion strategy depends on what performance indicators are set for, and includes 5-7 KPIs.

Imagine that at the end of the reporting period, you need to inform your colleagues and management about how your project is being implemented. You understand that everything is going well, and the necessary goals have been achieved. But how can you confirm this with facts? How can I measure the success rate of a project or the degree of problems encountered?

KPI is the answer to these questions. With these metrics, you will measure the right aspects of performance. You can also show them how close they are to the goals you set at the start. Since the evaluation is performed numerically, KPIs can be expressed in the form of graphs, diagrams, and other visual ways.

Difference between KPI and performance indicators

To develop a company in the future, you need to understand how to measure success in strategic planning. To continue or correct the chosen path, you should evaluate whether the right decisions are being made. However, you should not analyze all the available data. Prioritization is key: which indicators are more important than others.

The terms “performance indicator” and” Key Performance Indicator ” are sometimes confused. The difference in the word “key” means the choice of those parameters that are important for this particular company during this particular time period. It is important to pay increased attention to those 5-7 KPIs that demonstrate the implementation of the plan.

Unlike KPIs, Performance Indicators report the results of standard business processes, but they are not such important metrics that need to be constantly monitored. They increase productivity or work value, but are not critically important. In addition, performance indicators do not always relate to the values that the company has planned to achieve.

In other words, any KPI is a performance metric, but not every such metric is a KPI.

What should I choose as key indicators? Depends on the current business priorities. Let’s look at some examples.


The company plans to grow by 20% compared to the previous month. One of the KPIs can be formulated as “new deals this month”. But simply the performance indicator would be responsible for a less important parameter, for example, “site traffic volume”.

Selecting the appropriate KPI

If a company starts using key performance indicators, it is important for it to clearly identify priority plans and ways to achieve them.

How suitable is a particular key performance indicator? It should be:

  • specific;
  • measurable;
  • achievable;
  • relevant;
  • linked to deadlines;
  • available for evaluation, including repeated evaluation.

Another common method for determining KPI: consistency, reach, urgent need, accuracy, practical feasibility, and survivability.

Let’s take a closer look at the factors that are taken into account when choosing KPIs for a business.

Defining indicators for analysis

A properly assigned KPI should clearly reflect the value to be measured. The more information a metric contains, the better for your business. In order not to get confused, it is convenient to divide KPIs into several main categories.

  1. Activity indicators. Reflect the dynamics of movement towards the goal. For example, these are actions, processes, and the number of potential customers.
  2. Result indicators. This is relative progress compared to the planned total. Expressed as a percentage or fraction. An example is an increase in revenue compared to the previous period or with the planned amount of profit.
  3. Project indicators. Refer to the progress of a particular project and are expressed as a percentage of completion or summed up results. For example, what percentage of actions to close the project have already been completed.
  4. Target indicators. This is a numerical result relative to the date on which the goal was set to be achieved. For example, the strategic goal was to reach the доходу 1 million revenue level by December 1, 2020. The goal’S KPI will show you how far it was implemented by the desired date.

Setting a measurable goal

Regarding KPIs, a goal is a numerical parameter that the company wants to achieve. You need to define the goal in the form in which the metric is measured. For example, if the indicator is expressed as a percentage, then the goal should also be set as a percentage. And for a numeric value, you need to set a specific number as the goal.

Selecting data sources

Each KPI is based on initial data about the company’s performance. Make sure that the plan specifies the source of this information and the calculation formulas that are uniform for the entire team.

Assigning a person responsible for KPIs and monitoring frequency

Key performance indicators should be monitored throughout your work. You need to assign a specific person to the responsible role who will collect data, monitor results, and provide reports. The optimal frequency for monitoring KPIs is considered to be a month.

Checking the selected KPI

It is difficult to answer unequivocally which KPIs were chosen correctly and which ones will have to be changed after the first report. But in order to make as few adjustments as possible, check the standard requirements for key performance indicators. KPIs should:

  • show whether this strategy works now and in the future;
  • focus employees ‘ attention on important indicators for the company;
  • promote transparent and understandable reporting;
  • provide regular performance information;
  • display reliable data about current business processes;
  • lead from intermediate results to final results: show the speed of achieving the goal.

If you tested your KPIs on this list and they meet these requirements, then the indicators were selected correctly. However, you should take into account the specifics of your business, the scale of development plans, and other individual characteristics. There is no single correct guide to action here.

KPI in Internet Marketing

Marketers use dozens of key performance indicators for advertising campaigns and other activities. However, the list of KPIs varies depending on the specific area of the business and its specifics.

Let’s analyze seven common KPI categories.

  1. Traffic. Select branded ads from search engines, contextual advertising, and social networks. Traffic is evaluated by traffic, page views, sources, and clickability (CTR).
  2. User behavior. Includes calculations of bounce rate, Site time (TSS), and browsing depth (PPV).
  3. Conversion rate. The conversion rate is calculated as the number of users who performed the target action divided by the total number of users. Often, the goal achievement indicator is also calculated.
  4. The cost of attraction. Cash costs are calculated per user (CPV), Per Click (CPC), per order (CPO), and Per Lead (CPL).
  5. Average receipt. We use calculations of the average price per order on the site (AOV). Thanks to them, marketers optimize advertising costs and implement pricing.
  6. Return on investment. This is an indicator of the return on investment – for example, in advertising, office construction, and equipment purchase. The return on investment indicator – ROI – is equal to the ratio of net profit and Investment expressed as a percentage.
  7. Repeat sessions and sales. Most often, the site return rate (RVR) and lifetime customer value (LTV) are used. The latter indicator is calculated only for regular customers.

Web analytics systems allow you to track key performance indicators. For Example, Google Analytics. This is a built-in web analytics where you can calculate:

  • clicks;
  • unique users;
  • impressions;
  • engagement-viewing depth and time on the site;
  • click ability;
  • bounce rate;
  • conversion rate;
  • CPC;
  • pay for the action and much more.

These metrics give you a general idea of the situation with running ads and sales. But if you want to keep your finger on the pulse of all marketing KPIs, you need end-to-end analytics – combining data from CRM, multiple advertising platforms, and other tools

What metrics will be available to you:

  • cost of attracting a lead;
  • return on investment;
  • return on advertising costs and other important metrics.

Building a strategy with KPI

The main goal of key performance indicators is to help you make informed decisions and improve business efficiency. It doesn’t matter if you have chosen KPIs to achieve global strategic goals or to solve current team tasks. We offer you 3 tips on building an effective strategy using KPIs.

  • Keep an eye out for changes at all times. Continuous KPI monitoring provides information about whether everything is working as planned. Prompt response to changes in key performance indicators means confidence in the correct path and timely adjustments, which means saving the company time and money.


For your online store, an important KPI is the percentage of refusals from purchases at checkout-“abandoned shopping cart”. You have changed the design of the order page – and the number of “abandoned baskets” has increased dramatically. Since you noticed the problem quickly, you can fix it before it leads to losses.

  • Consult with the team. Within the team, you should agree on which indicators are important and which can be considered secondary. This will allow you to develop a unified strategy for monitoring KPIs and maintaining them at the right level. When a company changes key performance indicators or even adjusts its strategy, management needs to quickly communicate information to employees. So the whole team will immediately rebuild the work and harmoniously implement new standards. Sharing key information within the company will allow you to discard unnecessary data and establish effective work.


You always strive to achieve more ad impressions on the web. Now the management decided to pay attention to other KPIs – the indicator of ad clickability and the level of conversion to orders. According to this change, marketers should immediately start working in the new mode. As a result, impressions may decrease, but the number of real transactions should increase.

  • Measure success numerically. The company’s goals should not be generalized or vague. Let’s say you have defined the goal of “becoming a Microelectronics market leader”. How do I know if my goal has been achieved? How do I measure how close a company is to achieving this goal? Obviously, working at a loss is unlikely to be an indicator of the achieved goal. However, even a high level of income is not proof that you are a market leader.
  • KPI require goals to be clear and measurable. In the case above, you can choose the phrase “have more customers than your direct competitors”. Or” earn more revenue per year than other manufacturers in the country”, etc. constantly tracking your KPIs will allow you to quantify how close you are to market leadership. 

By choosing key business success metrics, you can determine how to measure your achievements. Up-to-date and reliable data will help you evaluate your progress, adjust your strategy, or get the expected profit.

Grow your business with KPI tracking

Key performance indicators are numerical metrics of results or actions that are important to the business. With KPIs, you track your progress towards your goal in detail and reasonably. Learn the rules of working with KPIs and achieve success even faster and at a lower cost!

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