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The complete guide to KPIs

May 22, 2017

A Key Performance Indicator (KPI) is a numeric value that indicates whether your team/company is reaching its targets. KPIs are used by teams and leaders to evaluate the performance of business processes and individuals.




Monitoring KPIs helps you to evaluate your organization’s performance and make data-driven decisions to grow faster.




KPIs are also known as performance metrics, performance ratios or business indicators. Read more on Wikipedia or Investopedia.


Examples of KPIs:

  • Net Profit Margin

  • MRR (Monthly Recurring Revenue)

  • Operating Cash Flow (OCF)

  • Sales Growth

  • Planned (Project) Value

  • Schedule Variance




Depending on your organization’s goals and objectives, you can track various Key Performance Indicators.


Selecting the right KPIs right at the beginning is crucial for getting actionable and helpful information about your company’s performance. Each business department measures different KPIs because they all have different tasks and goals.


There are five main types of KPIs:

  • Business KPIs

  • Financial KPIs

  • Sales KPIs

  • Marketing KPIs

  • Project Management KPIs




Business KPIs help to measure the achievement of long-term business goals. By tracking business metrics, companies are able to navigate between important business processes and identify the areas of slow growth.


Examples of popular business KPIs:

  • Revenue Growth Rate

  • Churn Rate

  • Acquisition Rate

  • Relative Market Share

  • Return on Equity




Financial KPIs are usually monitored by an organization’s leadership and the financial department. Financial metrics indicate how well a company is doing in terms of generating revenue and profits.


Examples of financial KPIs:

  • MRR (Monthly Recurring Revenue)

  • Net profit margin

  • Operating cash flow (OCF)

  • Working Capital

  • Current Ratio

  • Budget Variance




Sales KPIs are measurable values used by the sales team to monitor the achievement of their key objectives and goals. Sales metrics help to keep track of month-over-month results and attain sustainable sales growth.


Popular sales KPIs:

  • Monthly New Leads/Sales

  • Lead-to-Customer Conversion Rate

  • Cost per Acquisition

  • Sales Qualified Leads (SQL)

  • Customer Lifetime Value (LTV)




Marketing KPIs help marketing teams to monitor their success across all marketing channels. A quick overview of marketing metrics shows how well the marketing team’s doing in terms of acquiring new leads.

Examples of marketing KPIs:

  • Website Traffic Per Source

  • Cost Per Acquisition CPA

  • Marketing Qualified Leads (MQL)

  • Net Promoter Score

  • Conversion Rate




Project management KPIs are used by project managers to monitor project progress and the attainment of goals. Organizations use project metrics to identify successful projects and meet important deadlines.


Popular Project management KPIs:

  • Planned Value (PV)

  • Actual Cost (AC)

  • Earned Value (EV)

  • Cost Variance (CV)

  • Schedule Variance (SV)




High-level KPIs demonstrate the company’s overall performance.


Examples of high-level KPIs include

  • Annual Growth,

  • Annual Recurring Revenue (ARR),

  • and Relative Market Share.


Single individuals have no impact on these performance indicators as they’re the result of teamwork across multiple departments.


Low-level KPIs indicate the performance of specific departments or individuals. Low-level business metrics are tied to people’s day-to-day work and more actionable.




KPIs can be used to monitor your company’s performance across all departments. As a result, business leaders and teams can make informed and goal-oriented decisions, acting on actual data instead of gut feeling.


Here are the five essential questions everyone should answer before creating a KPI map:

  • What are my desired business results (goals)?

  • How can the KPI values be improved by taking action?

  • Do we have all the relevant data needed to monitor the KPIs?

  • Who is going to use the KPI report and what do they need to know (ie. which KPIs and metrics should be included)?

  • How to visualize specific KPIs (graphs, metrics, diagrams, etc.)?



To choose the right KPIs, you need to define your business goals. Each KPI you track should be measurable and tied to the achievement of specific goals.


It is better to focus on a few key metrics instead of many irrelevant ones. Only monitor the Key Performance Indicators that are relevant to your organization.


Ensure that every single one of your business metrics meets the SMART criteria:










Understand that Key Performance Indicators are different for each industry, growth stage, and project phase.


Follow the industry standards only if the match with your goals and objectives. Also, remember that the metrics you measure will change as your company grows and scales. Use the examples mentioned above to identify the right KPIs for your business and team. Leading a successful business is easier when you use KPIs that provide a graphical overview of where you stand. You’ll get insight into historical trends, current progress, and problem areas; and can use this information to maintain sustainable growth.

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