KPI is an abbreviation of the English phrase “key performance indicator”.

The term KPIs (key performance indicators ) is just the plural of the same English word.

Key performance indicators are used to evaluate the success or performance of an organization or project based on predetermined goals and expectations.

Examples of KPI / KPIs

By measuring the company’s KPIs , they quantitatively determine the performance of the company as a whole or of specific processes. In essence, they use numerical expression to verify whether they are approaching the set goals or not.

In an online business environment, a KPI might look like:

  • average purchase value,
  • time spent on the website,
  • number of returns and others.

For example, you set a goal to increase the number of orders in 6 months by 35 %. You will primarily support sales with PPC campaigns and advertising on social networks.

You will start tracking the performance of campaigns through various metrics (number of orders, number of clicks, advertising costs, etc.). However, these are not performance indicators, but metrics that evaluate the success of daily activities. They affect the result, but are not a critical indicator.

KPIs measure key objectives that have the greatest impact on overall business results. In the case of an increase in the number of orders through advertising, the main KPI should be the price for obtaining an order (CPA, Cost per Acquisition).

That’s the only way you’ll find out if you overestimated your expenses. An increase in orders must bring not only turnover, but also profit.

KPI measurement

Finding the most meaningful one in a sea of ​​metrics is not easy. A KPI should be a metric that, when changed, has a significant impact on the entire business.

How to set KPI?

Performance indicators are closely related to objectives. Therefore, there are no universal indicators for all companies.

  • Link indicators to strategic goals. Assign one, maximum two performance indicators to each goal.
  • Formulate KPIs as SMART goals. Make sure they are specific, measurable, achievable, relevant and time bound.
  • Don’t overdo it with a lot of performance indicators. Thanks to various analytical tools, companies have access to a lot of data, so they often measure anything. The fewer KPIs, the better overview and easier evaluation.


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