The Importance of KPIs

You may read that title and say “I know this already, I use KPIs, All. The. Time.” But do you? A lot of people treat KPIs (Key Performance Indicators) and Metrics as the same thing. BUT THEY ARE NOT.

A Key Performance Indicator measures the progress of a pre-defined group of metrics, and thus the success (or failure) of specific tactics in achieving your strategic goals.


Just like a square is considered a type of rectangle, KPIs are comprised of metrics.

But as no rectangle is ever a square, metrics on their own are
never KPIs.

So, try not to use the terms interchangeably. Plan and speak with purpose and I promise, you’ll be better off in the long run!

A couple things to remember about Metrics and KPIs:

I. Both are measurable. 

Quantitative data is required here. You cannot create KPIs for qualitative data alone — you can however score qualitative data, from things like focus groups and sentiment analysis, and thus make it quantifiable. ?

II. A metric is a static number at a point in time. 

I.e. Your response rate. Your click through rate. Your retention rates. Even if they are averages from a period of time like January or Q4; they are still static numbers. You will need to track many metrics to be able to measure your progress (or lack thereof!) in achieving your KPIs.

KPIs measure that progress toward specific parts of your goals, which is why some of the best also serve as mini SMART goals (Specific, Measurable, Achievable, Relevant, and Time-Bound). If you cannot measure your progress and have nothing to benchmark it against, you won’t know whether you are succeeding or not.

As Benjamin Franklin said, “If you fail to plan, you are planning to fail!”

III. A KPI is directly tied to your strategic objectives.

As alluded to in #2, above, you can’t develop your KPIs without knowing what your strategic goals and objectives are for your organization, or at the very least for the initiative at hand. We recommend that you develop several layers of KPIs so that you are covering both macro and micro goals.

Start with your strategic plan, or 3-5-year goals and brainstorm what will need to be done across departments and teams to achieve them. Start to identify both short-term milestones and metrics that will need to be tracked. Then stop. And make sure you have all stakeholders at the table. If you don’t, schedule some time to bring them all up-to-speed. Trust me, without consensus it may just be an effort in futility.

Now you are ready to get rolling!

  • Once you have consensus on goal prioritization, identify your KPIs. Limit yourself to no more than 2 per team per goal so you can stay focused on the metrics that matter most in achieving that goal.
  • Discuss the metrics you want to use and ensure that systems are in place for accurate tracking. Often this means source code clean-ups of various kinds across various databases — so discuss, and again, get consensus about what you can track, what needs to be tracked, and how high a priority it is if something needs to be changed before you can start tracking. Partners like CCAH can assist in performing analytic audits to help you get the house in order.
  • Now that you have ensured that you can track what you need to track, establish your reporting mechanisms for the metrics needed for each KPI. Dashboards are essential for giving all stakeholders an at-a-glance view of KPI progress.
  • Review these dashboards regularly and discuss at relevant meetings. KPIs are not “set it and forget it,” they require active monitoring, so you can adjust tactics when needed to see improvement.

Thoughts? Questions? We’d love you hear how you are using KPIs to achieve your organization’s goals. Just comment below!


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