What is a KPI?

By Scott Max

A KPI (Key Performance Indicator) is a value, usually numerical (to be fully measurable) that shows whether a company or a person is meeting the objectives it set at the beginning of a task, campaign or a specific period of time.

This video will help explain:

Beyond knowing if something is fulfilling its objectives, these KPIs are used in many occasions as an engine to motivate us, since, as it is not a subjective data, as it can be the attitude or if someone works well or not in a team, it is a totally measurable element that only allows a realistic reading and that supposes a goal.

What are the requirements for a good KPI?

For us to be able to say that a KPI is well defined (like any kind of goal) we should apply what is known as SMART Criteria, that is, make sure that it is:

  • Specific: our KPI must be identified with a specific aspect in order to make an improvement comparison. The more specific it is, the easier it will be to measure it.
  • Measurable: of course it has to be measurable in order to be able to assess progress.
  • Achievable (Attainable): this is key. A KPI that is not attainable will not generate anything beyond frustration.
  • Realistic: this point is closely related to the KPI being achievable. We must be aware of the resources available to us to overcome the KPI before we set it as a goal.
  • We can frame it in a time frame: setting a dead-line will optimize our efforts and create a history with which to compare our progress.

Are there different types of KPIs?

According to their typology we can differentiate many types of KPIs. For example, within digital marketing, according to the type of campaign or the type of channel, we can define KPIs of community increase, KPIs of total reach, KPIs of engagement... and so on, to infinity.

But, in reality, we like to differentiate between two large groups of KPIs:

Individual KPIs

These are KPI's that affect only one person within a team and depend only on that particular person. For example: that one person manages to reduce the time it takes to write a post by an average of 10% in one year.

Collective KPIs

These are the KPI's that affect an entire group and depend on the collaboration of all members to achieve them, making them also responsible for achieving them. For example: that a company increases its turnover by 5% during the year 2018.

Now that you know what a KPI is, it is time to set yours and focus your efforts on achieving it. Remember that the key is to measure them, so you can set more ambitious KPIs every time.

Most common further questions:

What is a KPI example?

136 Key Performance Indicators Examples (The Complete List) Key performance indicator (KPI) is a measurable value that shows the progress of a company's business goals. KPIs indicate whether an organization has attained its goals in a specific time frame. How to choose the right KPIs to monitor?

What are the 5 key performance indicators?

  1. Sales growth.
  2. Income Sources.
  3. Revenue Concentration.
  4. Profitability Over Time.
  5. Working Capital.

What is KPI in job description?

(KPIs) are the measurable outcomes tied to the responsibilities outlined in the job description.

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