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What is a KPI? (Definition and Examples) đź‘€
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What is a KPI? (Definition and Examples) đź‘€

September 3, 2020
Rob Lennon
Customer Education Lead at Hugo
Marketer and author with experience spanning a diverse 16 years in retail and SaaS startups across healthcare, mar-tech, and ad-tech, and productivity software sectors.

Successful businesses thrive on progress.

Whether you’re a B2C company with a short sales cycle or a B2B brand targeting a committee of buyers, creating top-down goals is a necessary step in keeping everyone across the organization on track and accountable.

One of the most common methodologies for this level of goal-setting is the use of KPIs.

To help get you started, this article offers a definition of KPIs as well as a wide range of KPI examples.

KPI Definition

A key performance indicator (KPI) is a measurable outcome that enables an organization to track progress against stated business goals. This can run the gamut from sales and marketing targets to product development and customer satisfaction metrics.

Types of key performance indicators

Organizations across industries use KPIs to evaluate employees at all levels, often weaving them into quarterly and annual performance reviews to lend some objectivity to the process.

They also leverage KPIs to track high-level business objectives like hitting revenue targets. In many ways, each individual KPI is like a building block that contributes to the overarching goal of growing the business.

Here are some examples of common KPIs—from individual employees to the business in general:

KPI examples for employees

  • Maintain a first-response time (FRT) of less than an hour for all support tickets
  • Produce four new SEO-optimized articles during Q3
  • Close a minimum of 10K in new business during Q4

KPI examples for managers

  • Hire and onboard three new employees into key roles by the end of the year
  • Generate $200K in new sales pipeline during Q3
  • Increase organic web traffic by 30 percent by the end of Q2

KPI examples for businesses

  • Close $2M in new business by the end of the year
  • Increase NPS score by 30 points by the end of the year
  • Build, QA, and release new product by Q2 of next year

How to write KPIs

Effective KPIs start with considering your desired results.

If a marketing manager needs to increase the number of qualified leads they hand off to sales, for example, they might consider tactics like “create an engaging social campaign” or “run a series of targeted display ads.”

As KPIs, these goals would translate to specific outcomes like “increase social referral traffic by 10 percent” or “increase unique web visits by 30 percent.”

To write effective KPIs:

Start with the end in mind

What goal are you trying to achieve and what actions will help to get you there?

Be ambitious but realistic

Is the target KPI realistically achievable within the timeframe given?

Don’t choose what you can’t measure

KPIs need measures. If you can’t measure it, there’s no way to determine success or failure.

Have a reliable data source

There shouldn’t be any ambiguity around how each KPI is measured and tracked. Get relevant data from reliable sources.

Choose a reporting frequency

Not all KPIs are created equally. Some demand weekly reports, while others are best suited to monthly or quarterly check-ins.

How to measure KPIs

KPIs must be measurable in order to be actionable.

Whether you’re measuring revenue, customer service, marketing, or efficiency, you’ll derive the most value from KPIs when you define relevant and specific goals from the beginning. 

To illustrate how to approach KPI measurement, let’s take a closer look at one of the most common business goals: increasing sales.

There are a number of things an organization can focus on to support the goal of increased sales. A marketing manager might zero in on:

  • Generating more leads
  • Building brand awareness
  • Increasing social media presence

To achieve these goals, the business may:

  • Invest in advertising
  • Invest in SEO content
  • Create social-first demand gen campaigns

But none of these actions are measurable enough on their own to trace back to a lift in sales. To transform these goals into clear KPIs, you must attach numerical outcomes to specific objectives:

  • Invest in advertising becomes Run targeted display ads to prospects who meet specific criteria to increase web traffic by 10 percent
  • Invest in SEO content becomes Increase organic traffic by 10 percent each quarter by producing 3 new SEO-optimized articles based on keyword research
  • Create social-first demand gen campaigns becomes Increase social referral traffic by 30 percent in Q3 by building a calendar of engaging social posts around relevant themes

With relevant and specific KPIs, measurement becomes a matter of pulling data from relevant systems:

  • Measure your ad investment by cross-checking Google Analytics with your advertising tool of choice to see how many people clicked your ad and landed on your website.
  • Measure your SEO investment by using Google Analytics to compare month-over-month traffic and see how many unique site visits each article attracts.‍
  • Measure your social campaigns by cross-referencing native engagement metrics with social referral traffic in Google Analytics.
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Rob Lennon
Customer Education Lead at Hugo
Marketer and author with experience spanning a diverse 16 years in retail and SaaS startups across healthcare, mar-tech, and ad-tech, and productivity software sectors.

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