How to Choose the Right KPIs for Your Organization

There’s no one-size-fits-all system for choosing the right KPIs. Instead, here’s how you can choose the most effective KPIs tailored specifically for your business.

Ryan Gould Ryan Gould on August 30, 2018 • 5 minute read

Key performance indicators (KPIs) are invaluable weapons in any business’ arsenal.

In short, KPIs are individual units of measurement that provide windows into the performance of a business’ various departments and initiatives. They effectively illustrate where and how a company may be falling short (or exceeding) its goals.

Now, there are many different types of KPIs, but they typically fall into these four categories.

  • Cost reduction
  • Revenue improvement
  • Process cycle-time improvement
  • Increased customer satisfaction

Those are some of the most common and effective KPI categories. They are time-tested and are solid measurable values that show how effectively a company is reaching its business objectives.

So all KPIs within these categories will obviously work for your company, right? Well, not necessarily.

Here’s the thing: there’s no one-size-fits-all system for choosing which KPIs to focus on.

Those values are going to change from business to business. What we can do is look at how you can choose the most effective KPIs tailored specifically for your business. We show how to do just that below.


Well, not smart, per se, but SMART.

SMART goals have been adopted over the years in order to help individual businesses choose the right KPIs.

The acronym stands for Specific, Measurable, Attainable, Relevant, Time-Bound.

Any KPIs you settle on should be chosen with these attributes in mind.

Are they Specific to your business? Easily Measurable and trackable? Are they Attainable (meaning is this something management feels their departments can realistically achieve)? Are they Relevant to your goals?

Finally, have you set a reporting Timeframe in which to track the KPIs? This means laying out when you expect to achieve the goals locked in by your KPIs and measuring progress over a specific timeline.

There are three principal models for tracking metrics over time:

  • X-to-date (fixed start date, rolling/moving end date)
  • Historic (have a fixed start and end date)
  • Rolling/moving metrics (fluid start and end date)

There are common time frames for each of these models, and choosing which works for you, again, depends on your goals.

However, what’s certain is that without settling on a reporting timeframe, the whole system breaks.

Now, if you really want to travel down the rabbit hole of measurable values you can go from SMART to SMARTER. That means adding “Explainable” and “Relative” to the above system.

Making “explainable” a key factor in choosing your KPIs is going to do one very positive thing: it’s going to make the KPI definition clear to all stakeholders within your company. And if everything is clear and explainable, that is going to do wonders for aligning your sales and marketing teams.

“Relative,” on the other hand, is ensuring your KPIs are applicable as your business and/or volume grows.

For example, there’s a good chance you’ll look at customer acquisition cost (CAC) as a KPI, since it applies to most businesses. Of course, this figure is going to fluctuate depending on the efficiency and efficacy of your sales and marketing teams.

So you’ll want to look at CAC in relation to the development of your business. If your business is losing money and your CAC remains the same, then it’s not moving relative to your business goals.

Define metrics by department

This is because business silos tend to implement their own strategies and tactics in service to the company’s overall goals.

Since all companies are different, it’s best to select department-specific KPIs based on the SMARTER method. Having said that, there are a number of KPIs common to the departments of marketing, sales, finance and management.

For example, many sales strategies focus on simple but telling indicators like sales growth (a crucial KPI). This tells you the rate at which revenue from sales is increasing or decreasing.

If you’re diligent and measure it over time, then it provides invaluable insight, such as determining growth trends. You can also look at it under a microscope in order to discern how effectively sales teams and reps are contributing to the organizational goals.

Now, your marketing department likely won’t be so laser-focused on a few basic KPIs.

After all, they’re probably dealing in multiple channels and are going to want to select KPIs specific to each strategy and initiative.

SEO specialists, for example, are going to look at a number of KPIs by themselves. These include click-through rates, goal conversion rates, search impressions, and more. That’s to say nothing of the KPIs for social media and content marketing.

So you see how important the “explainable” portion of the SMARTER system is.

With so many KPIs in play, it’s imperative that marketing and sales are always communicating. Here are some other tips for proper sales and marketing alignment.

Reporting on KPIs

If you’ve settled on the KPIs you feel provide the most insight, then you’re almost done—but not quite.

With any data-driven business, the goal is to not only convert the raw data into insights but to present this information to your teams in the form of regular KPI reporting.

An effective KPI report will be accessible and digestible in under 10 minutes. And the best way to ensure your KPI reporting is presented this way is with an efficient KPI dashboard.

An interactive dashboard will communicate all this information clearly.

Even better, it will allow stakeholders to familiarize themselves with the insights beyond reading a mere report. And connecting your KPI dashboard to automated email for quick reporting ensures everyone, from management on down, stays up to date with business objectives informed by key insights.

Looking for a place to start? Grab this free Google Analytics template and visualize your website performance in minutes.

About the author
Ryan Gould
Ryan Gould As VP of Strategy and Marketing Services at Elevation Marketing, Ryan helps Elevation’s clients solve their problems and achieve their business goals through integrated marketing solutions distinguished by research, storytelling, engagement, and conversion.
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