Key performance indicators (KPIs)

There are multiple types of KPIs, and the right KPIs for you depend on the nature of your business and its priorities, so there is no way to create an exhaustive list of all possible KPIs. Instead, the 12 categories below show you different types of KPIs. Note that these aren’t 12 separate categories, but rather 12 descriptors that show the various ways KPIs work, which can give you a framework for creating and selecting your own.

• Quantitative KPIs: These first two categories are broad classifications that can overlap with the other 10. Quantitative indicators measure objective, number-based aspects of business performance. You may immediately think of financial KPIs, such as the number of quarterly sales or customer lifetime value, but this also includes marketing numbers, such as click-through rate, social media following, and email open rate. Quantitative KPIs also apply to internal performance, such as employee turnover or retention rate.
• Qualitative KPIs: Qualitative indicators refer to non-numerical performance, such as customer reviews and employee satisfaction. These measures are often based on opinion or interpretation and aren’t cut-and-dried objective data the same way that quantitative indicators are. However, you can—and should—still find ways to measure performance in these areas. For example, with customer reviews you can ask customers to give a rating on a scale of 1 to 5; or you can categorize written reviews as either positive or negative, and track your percentage of positive reviews.
• Leading KPIs: Leading indicators help you forecast what will likely happen in the future based on trends. With the above example of customer reviews, you could look at a decrease of rating as a potential leading indicator for customer attrition.
• Lagging KPIs: Lagging indicators track performance that has already happened, so that you can track progress and recognize trends. For example, if you run a display ad campaign to promote one of your products, your lagging KPI could be product sales growth over time.
• Input KPIs: Input indicators help you track resources you need to use in order to produce desired results, which can include budget, equipment, and staff.
• Output KPIs: On the other side of input indicators are output indicators, which track the results brought about by the inputs. Hiring additional staff in your call center could be the input, with a decrease in customer wait time as the resulting outcome.
• Process KPIs: Process indicators allow you to measure effectiveness and efficiency of the operation of your business. For example, you could look at your process for producing a video ad campaign, from ideation to design to execution, and look for ways to improve inter-team communication or consolidate efforts in order to reduce time or cost.
• Practical KPIs: With practical indicators, you look at how the processes in your business impact other parts of your business. With the above example of the process of creating video ads, a poor process could result in wasted resources, an increase in overtime hours, or the need to repeat or reverse previous work.
• Directional KPIs: Directional indicators measure positive or negative trends over time. To use a physics metaphor, if you’re tracking monthly sales, then the number of sales is the velocity; the rate of increase or decrease is the acceleration—the directional KPI. You may look at trends in your business’s performance in comparison to others in the field.
• Actionable KPIs: Actionable indicators measure internal business changes. How effective is your business at enacting changes such as improving company culture or employee satisfaction?
• Financial KPIs: We referenced financial indicators above when discussing quantitative KPIs. These KPIs track your business’s economic growth and stability or sustainability. Examples of financial KPIs include revenue growth and net profit margin.
• Outcome KPIs: Outcome indicators look at the impact of the actions taken by your business. Take the example from output KPIs: a decrease in customer wait time (output) generated by hiring additional call-center staff (input). One potential outcome indicator is increased customer satisfaction.

Let’s take a look at some KPI examples that marketers often use for their campaigns.

• Campaign reach: Choose KPIs that indicate the size of your campaign’s audience, including ad impressions, email sends, and page views.
• Campaign engagement: Use KPIs to quantify how audiences respond to your campaign, such as clicks and click-through rate, bounce rate, social shares, and video completion rate.
• Campaign results: The KPIs that measure campaign results can vary depending on what you want your audience to do. You may look at product sales for a lower-funnel campaign, brand recall for an awareness campaign, and conversion rate (CVR) on an online form for a consideration campaign.

KPIs are related to objectives and key results (OKRs) but they are not the same thing. Whereas KPIs are individual metrics that track your company performance, the purpose of an OKR is to act as a strategic framework for the business. KPIs can certainly feed into your OKRs; the objectives in OKRs are the larger organizational goals that explain the why of your KPIs.

1. Identify your business goal

Understanding the relationship between KPIs and OKRs can help you create and define your own KPIs. Your long-term business objectives will guide you in creating a KPI, so select one of your overarching goals.

3. Make it measurable

Know how you will determine success or failure on the KPI. What is the improvement you want to achieve in this metric? What is the time frame for accomplishing that improvement? Can your employees understand how their work contributes to it?

4. Keep track of it

Establish a regular cadence for checking on the KPI. If your time frame is one year, you might choose monthly or bimonthly updates. For marketing KPIs, you can use reporting or analytics solutions such as Amazon Attribution to help you measure progress.

Once you go through this process and create multiple KPIs, consider creating a KPI dashboard that provides visibility into your progress through an aggregated view.