{"id":20064,"date":"2020-01-28T16:59:38","date_gmt":"2020-01-28T16:59:38","guid":{"rendered":"https:\/\/www.arimetrics.com\/glosario-digital\/kpis"},"modified":"2026-09-18T10:18:24","modified_gmt":"2026-09-18T10:18:24","slug":"kpi","status":"publish","type":"encyclopedia","link":"https:\/\/www.arimetrics.com\/en\/digital-glossary\/kpi","title":{"rendered":"KPI"},"content":{"rendered":"

\"KPI\"Definition:<\/strong><\/p>\n

A KPI<\/strong>, or Key Performance Indicator<\/em>, is a measure selected to evaluate the progress of an activity, team or organisation in relation to a relevant objective.<\/p>\n

A KPI may be expressed as a count, percentage, rate, time, cost or index. Its status as a key measure does not depend on the format but on its relationship with a decision and priority outcome.<\/strong> KPIs for a digital marketing<\/a> campaign may therefore differ from those used in finance, operations or customer service.<\/p>\n\n

KPI selection<\/h2>\n

Selection begins with the objective rather than the data available in a tool.<\/strong> The organisation needs to define which outcome it wants to achieve, which levers it can manage and which indicator will show whether progress is moving in the intended direction.<\/p>\n

A dashboard may include lagging indicators and leading indicators<\/strong>. The former reflect outcomes already achieved, while the latter help monitor activities that may contribute to the result. The appropriate number depends on the decision level: too many indicators make it difficult to distinguish what is genuinely important.<\/p>\n

How to identify KPIs<\/h2>\n

Defining a key indicator involves an explicit sequence:<\/p>\n

    \n
  1. Formulate the objective:<\/strong> Specify the outcome to be improved and the period to which it relates.<\/li>\n
  2. Choose the indicator:<\/strong> Select a measure that represents progress and can be interpreted consistently.<\/li>\n
  3. Set the reference and target:<\/strong> Document the starting value, desired direction and, where appropriate, target value.<\/li>\n
  4. Define its management:<\/strong> Assign the data source, formula, frequency, segmentation, owner and intended response to a deviation.<\/li>\n<\/ol>\n

    The SMART framework can help formulate objectives and targets, but it does not automatically make a measure a KPI.<\/strong> The indicator needs to be understandable, feasible and useful to the people who review it.<\/p>\n

    KPI scope<\/h2>\n

    A metric<\/a> is any measure used to describe an activity or outcome. A KPI is a metric selected as key because of its relationship with a specific objective and responsibility.<\/strong> The same measure can be a KPI for one team and contextual information for another.<\/p>\n

    For example, visit count may describe traffic but will not necessarily be a KPI if the objective is to improve profitability<\/strong>. An impressive figure disconnected from decisions can become a vanity metric<\/a>.<\/p>\n

    How to find a good KPI<\/h2>\n

    A useful KPI commonly has the following qualities:<\/p>\n

      \n
    • Relevance:<\/strong> It is linked to a priority objective.<\/li>\n
    • Stable definition:<\/strong> Its formula, scope and units are documented.<\/li>\n
    • Suitable data:<\/strong> The source has sufficient coverage, quality and freshness for the intended use.<\/li>\n
    • Comparability:<\/strong> It supports analysis over time, by segment or against references without mixing incompatible criteria.<\/li>\n
    • Actionability:<\/strong> The people reviewing it can make reasonable decisions in response to change.<\/li>\n
    • Context:<\/strong> It is interpreted with a reference, target and the limitations of the measurement.<\/li>\n<\/ul>\n

      Examples of KPIs<\/h2>\n

      The following indicators can act as KPIs when they are connected with the corresponding objective:<\/p>\n

      Business KPIs<\/h3>\n
        \n
      • Gross profit:<\/strong> Sales revenue minus the cost of goods or services sold.<\/li>\n
      • Revenue growth rate:<\/strong> The difference between current-period and previous-period revenue, divided by previous-period revenue and multiplied by 100.<\/li>\n<\/ul>\n

        Web analytics KPIs<\/h3>\n
          \n
        • Return on investment:<\/strong> Net gain attributed to the investment divided by its cost. Attribution and included costs need to be defined.<\/li>\n
        • Cost per lead:<\/strong> Attributable cost divided by the number of leads meeting the agreed definition.<\/li>\n
        • Conversion rate:<\/strong> Conversions divided by the selected opportunity base, such as sessions, users or clicks, and multiplied by 100.<\/li>\n<\/ul>\n

          SEO KPIs<\/h3>\n
            \n
          • Organic conversions:<\/strong> Valuable actions attributed to organic traffic under the measurement model.<\/li>\n
          • Search visibility:<\/strong> Change in presence for a defined set of queries, pages and markets.<\/li>\n
          • Organic CTR:<\/strong> Clicks divided by impressions for the analysed scope and period.<\/li>\n<\/ul>\n

            Paid advertising KPIs<\/h3>\n
              \n
            • Cost per acquisition:<\/strong> Attributable spend divided by recorded acquisitions.<\/li>\n
            • Conversion value per cost:<\/strong> Value attributed to conversions divided by advertising spend.<\/li>\n
            • Paid conversions:<\/strong> Valuable actions attributed to paid campaigns, interpreted with their attribution window and model.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

              Definition: A KPI, or Key Performance Indicator, is a measure selected to evaluate the progress of an activity, team or organisation in relation to a relevant objective. A KPI may be expressed as a count, percentage, rate, time, cost or index. Its status as a key measure does not depend on the format but on […]<\/p>\n","protected":false},"author":6,"featured_media":79811,"template":"","encyclopedia-tag":[1296],"class_list":["post-20064","encyclopedia","type-encyclopedia","status-publish","has-post-thumbnail","hentry","encyclopedia-tag-measurement-planning"],"_links":{"self":[{"href":"https:\/\/www.arimetrics.com\/en\/wp-json\/wp\/v2\/encyclopedia\/20064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.arimetrics.com\/en\/wp-json\/wp\/v2\/encyclopedia"}],"about":[{"href":"https:\/\/www.arimetrics.com\/en\/wp-json\/wp\/v2\/types\/encyclopedia"}],"author":[{"embeddable":true,"href":"https:\/\/www.arimetrics.com\/en\/wp-json\/wp\/v2\/users\/6"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.arimetrics.com\/en\/wp-json\/wp\/v2\/media\/79811"}],"wp:attachment":[{"href":"https:\/\/www.arimetrics.com\/en\/wp-json\/wp\/v2\/media?parent=20064"}],"wp:term":[{"taxonomy":"encyclopedia-tag","embeddable":true,"href":"https:\/\/www.arimetrics.com\/en\/wp-json\/wp\/v2\/encyclopedia-tag?post=20064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}