KPIs are Key Performance Indicators. This term is often used to describe all data points in an organisation. However, metrics are any data points that can be measured, whilst Key Performance Indicators (KPIs) are standalone metrics used to measure specific activities, products or initiatives. They are quantitative and can be financial or non-financial metrics.

Key metrics and KPIs for your business should align with your business objectives. Commonly tracked KPIs include revenue growth, profit margins, customer acquisition cost, customer satisfaction scores, sales conversion rates, sales cycle length and inventory turnover. Tracking these indicators helps monitor performance and guide strategic decisions. It’s important to select KPIs that directly reflect your business goals and review them regularly to ensure they remain aligned with your evolving business strategy.

Whilst KPIs are benchmarks for performance and often tied to strategic goals, they do not inherently include the actions or projects needed to achieve those goals. In comparison, OKRs (Objectives and Key Results) are qualitative metrics that measure progress towards an objective. They are specific, time-bound and measurable. They are used to set ambitious goals with measurable outcomes to drive significant leaps in performance and innovation.

OKRs are typically set on a quarterly or annual basis and encourage teams to stretch beyond their current capabilities. Examples of OKRs might be:

• Launch targeted marketing campaigns in key segments, achieving a lead conversion rate of 15%
• Increase average deal size by 10% with the introduction of cross-selling strategies
• Achieve a customer satisfaction score (CSAT) of 90% through enhanced post-sale support and engagement

Choosing what to measure is important, but understanding why you are measuring it is crucial. This represents the alignment between your data strategy and your business strategy.