Metrics Spotlight: What is a KPI?

KPI are metrics that represent your company performance.   The business benefit of KPIs is creating a means to measure how well your business is meeting its operational objectives.  KPI usually takes the form of a ratio, though it can be either a count or ratio.

The post "4 Good Questions For Selecting KPIs for Your Business" lists a few key questions to ask in selecting a KPI. But no matter what, KPIs have two particular qualities meant to create meaning across all parts of an organization. Those qualities help KPIs provide a context to business performance that managers consider important. The two qualities are that…

• Management agrees on the KPIs needed.  This makes the KPIs easy to understand, and help to order the urgency of response needed.
• KPIs relate analytics metrics to the business. Because KPIs can be specific to a particular business, many analytics solutions do not have metrics that neatly fit into the KPI format. But a few metrics can be helpful off the bat or be a part of a compound metric. The value depends on the purpose for your business.

Here are a few examples that can be found in a standard analytics tool:

• Average number of visit from a social media platform
• Average time spent on site or page
• Average order value by social media platform
• Average time spent by community

For other KPI ideas, look at suggestions on dashboard sites in the Zimana post "Dashboard Resources for Analytic Best Practices: 4 for the hip pocket"  as well as "4 Good Questions for Selecting KPIs for Your Business".  And for more about social media influence on KPIs, read the Zimana post "When KPIs Socialize".