Analytics

10 Common KPI Mistakes Companies Make and How to Avoid Them

Not seeing the desired results in your business? You may be making one of these KPI mistakes. 30+ experts share how to avoid them.

Stefana Zaric Stefana Zaric on September 16, 2021 (last modified on September 13, 2021) • 12 minute read

Sometimes, it feels like you’ve been trying to make a cake without a recipe. Your ingredients are all over the place and you’re not sure what you’re supposed to use. Or how much of it.

You probably know by now that there are metrics and KPIs a business needs to track and analyze to generate results – new leads and subscribers, sales, or, ultimately, revenue.

But getting your KPIs right is easier said than done.

We get it. Everything feels equally important, you’re not sure what metrics to choose as your priority, and even after you decide what to track, you have no idea if it’s achievable or really relevant for your goals.

Well, our goal is to help you achieve yours. That’s why we asked over 30 experts to share their experience: what are the most common KPI mistakes they’ve seen in companies, and how can you fix them?

Let’s jump right in.

Trying to Measure Everything

According to almost every expert we talked to, measuring every metric there is to measure is the worst mistake a company can make (over 40%). Others (around 38% ) said they measured everything and never updated their KPIs. Around 25% of participants also failed to link their KPIs to their company’s strategy and collected data for KPIs everyone else in the industry measured.

Most common KPI mistakes

And Joaquín Roca of Minerva admits he’s made it, too. “One mistake I’ve made personally is trying to optimize for too many KPIs. These metrics should define your North Star, and that direction becomes fuzzy when you put too many of them out there,” says Roca and suggests limiting the metrics to focus on.

“You may be asking yourself the following: Are you optimizing for sign-ups, activation or engagement? How about new sales? Or churn? Or net revenue retention? Chances are, you have a whole excel doc tracking these metrics, and you should. However, you should limit the number of metrics you call out to the team for everyone to track and focus primarily on those.”

Andre Oentoro of Milkwhale adds that having “excessive KPIs can do more damage than good.”

“Instead of focusing on the future, you can end up being stuck in the past due to overly obsessing over KPIs. Too many KPIs can be too much to handle. Sometimes it’s better to focus on a few effective KPIs than measure every single KPI,” concludes Oentoro.

Ignoring Your KPIs

The other extreme is equally harmful to a company. Ignoring your KPIs and not taking any action after you’ve measured and analyzed them brings you the same results as measuring everything, or the wrong metrics.

Assembly AI’s Dylan Fox believes that acting on your data right away is crucial. “Many companies seem to go by a ‘let’s wait and see’ protocol, which may feel safe, but it’s actually putting your company at even more risk,” says Fox.

“Companies who wait too long to make important pivots are often left by the wayside, and may be completely taken over by their seemingly harmless competition. Does Blockbuster ring a bell?”

Sometimes this mistake is impossible to recover from – when the train has left the station, there’s nothing you can do. Make sure you take quick action as soon as you gather valuable data from measuring your KPIs.

Editor’s note: Measure all your relevant KPIs in one place. With this well-organized overview of your most important KPIs, you’ll easily track how much your monthly traffic has increased, how well your landing pages are converting, or what sources most of your traffic comes from. Download the Google Analytics Top 10 KPIs dashboard template right away.

Google Analytics Top 10 KPIs dashboard template

Not Prioritizing Your KPIs

When you set your KPIs, even if there are just a few, you can always prioritize one or two, but it doesn’t make the others irrelevant. Sasha Matviienko of Growth360 reminds us how important it is to keep the secondary KPIs in mind as well.

“A mistake I see often with clients is setting a primary KPI and forgetting about secondary KPIs for their websites. If your funnel or a web form consists of six steps that are spread over a few weeks, I often recommend tracking steps 1-3-5 as secondary KPIs. This allows for better measurement of the Sales pipeline and how many leads you have to work with.”

Not Linking Your KPIs to Your Strategy

If you want to win a race, will you measure how high you can jump? Of course not, because this metric has nothing to do with your goal. That’s another mistake companies often make when setting KPIs: they’re not linking KPIs to their strategy and overall goals. That means they’re measuring the wrong KPIs, which results in a waste of time and other resources.

Daniela Sawyer of FindPeopleFast claims that “there should always be sufficient connection and relevancy between the KPIs measured and the company’s strategies; otherwise, the tracking process would only be redundant and a waste of time and money.”

“Most business owners’ managers also select those KPIs that all the other companies are using, which is again useless. Not setting strategic KPIs also leads to piling up of irrelevant information and poor, uninformed decision making,” explains Sawyer.

“Analyzing KPIs that don’t help your business reach its goals won’t help you grow your business and move your business forward,” confirms Jonathan Aufray of Growth Hackers.

“I see too many marketers tracking the wrong KPIs. For instance, if you want your business to land more clients, tracking metrics such as number of leads or lead-to-sale ratio or sales velocity make sense, but tracking the number of followers or likes you have doesn’t really help.”

Not Reviewing Your KPIs

The metrics you once determined were your KPIs may not be the same after a year. Have your goals changed? Have your clients or projects changed? Chances are, your KPIs have as well.

Parlor’s Liz Lisowski says she’s seen this issue pop up before. “It can be easy to fall into the habit of using the same basic KPIs for similar projects or relying on a KPI set by your predecessor.”

“However, it’s important to always take the time to stop and evaluate exactly what information is important and needed for individual projects, so you can properly gauge what success should look like,” explains Lisowski.

Leszek Dudkiewicz of Passport Photo Online shared his own experience on this topic. “I faced this situation when our marketing team was developing. Since the marketing team decided to launch a completely new campaign, they revised their strategy and implemented new tasks. All of those changes affected metrics to measure. However, I realized this when their KPIs have not increased. When we discovered the omission, we were able to establish new KPIs based on their new tasks.”

Comparing Yourself to Others

Your business is unique, so there may be some unique metrics and measures to focus on. Sometimes, you just won’t be able to apply the “one-size-fits-all” solution you’ve seen work for others in the industry. That’s why you shouldn’t compare yourself to the industry standard at all costs.

Amplitude Digital’s Jeff Ferguson says that “comparing certain metrics and KPIs to overly broad ‘industry standards’ is a big mistake.”

“There are many comparison metrics, such as ROI or ROAS, that aren’t designed to be compared with averages that you can find out in the wild. Companies should base their goals for those metrics on their internal numbers, otherwise, they could be chasing something that is unobtainable or congratulating themselves for something way too easy.”

Neil John of OneComputerGuy gives us an excellent example of why it’s wrong to blindly follow the same KPIs as everyone else. “Let’s suppose, you’re a business owner and want to deploy KPIs to ensure your revenue growth and employee performance is trajecting upwards. You would need to see your own business needs and analyze accordingly, but most employers want to look at what their competitors are doing,” says John.

“This can be the worst use of KPI as they are designed to meet needs based on what you need and not as a tool to imitate. This can also happen if a certain metric gains popularity among your business circle and everyone jumps on the bandwagon including yourself. Just because something is talked about more than others or is more popular does not automatically make it better. Ensure that you understand your business model and do not rush into investing in a KPI that does not work on your working structure.”

Not Including Your Team

Having everyone work together and provide their own share of insights is the only right way to set your KPIs. After all, it’s critical to assign KPIs to people on your team so everyone can be responsible for a specific metric: this way, they’re easier to track and you can avoid burdening people with too much data.

Benjamin Smith of Disco believes including your team in the process of setting the KPIs means setting them up for success. “Teams need to be aligned, and when it comes to KPIs it’s important to have a shared understanding of what is expected and how realistic managers’ expectations are,” claims Smith. “The people in charge of accomplishing various KPIs need to provide input on what they feel comfortable with based on their bandwidth. Having team buy-in on KPIs can make a big difference between whether your team reaches its goals.”

Eden Cheng of PeopleFinderFree agrees that each KPI needs to have a person in charge of it.

“It’s significant that each associated KPI possesses a champion who is liable for its implementation and tracking. I have observed no one is liable for a particular area, which jeopardizes the measurement or leads to inaccurate implementation,” notices Cheng, and adds:

“Accountability can be nurtured if it’s transparent who is liable for what at the beginning of the planning process. They should have made a robust strategic plan, which would have given them an amazing chance of successful implementation. If this happened, their team could better know what they are accountable for and precisely what needs to be analyzed or developed.”

Focusing on Numbers Only

Some things cannot be measured in numbers only. Sometimes, you need to involve the human factor as well, and measure KPIs that can’t always be expressed as accurately as you’re used to.

Yoann Bierling of New SAP ERP shares a great example of this situation:

“It is easier to rely on hard numbers than to try to include human ones, and some projects are failing for that reason,” explains Bierling.

“Therefore, it is important to include numbers coming directly from staff members, that will accurately reflect the reality. For example, a training completion KPI should reflect the staff readiness on a given skill according to them, and not a training completion percentage coming from a contracting training company, which might not mean that the skill has been fully acquired by everyone.”

Not Being Specific Enough

Marco Baatjes of Caffeinated Face believes companies often mistake output for outcome and focus on the wrong aspects of the business when setting and measuring KPIs. But one specific thing Baatjes singles out as a common mistake is setting KPIs that are too broad.

“One common mistake is to set objectives that are so broad that it becomes impossible to pinpoint what a manager needs to do differently in order to make progress on those objectives,” says Baatjes and shares his own experience:

“When I ran my first eCommerce store, measuring sales seemed like a straightforward KPI to measure, however in the end it was too broad to see where improvement was needed. This is a common mistake I see new store owners make constantly! It led me to become laser-focused on certain aspects of sales, such as conversion rates, customer retention rates, and refund rates. These KPIs allow you to paint a better picture of your overall store’s performance, and give you the opportunity to improve areas that you thought didn’t need improving.”

Editor’s note: Want a simple way to track your conversions? You can easily find out if you’ve completed your goals by tracking your top-performing pages and monitoring goal completions by channel or page, or your overall goal completion rate. Download this free Google Analytics Conversion Report: Goals Overview dashboard template to get started.

Google Analytics Conversion Report: Goals Overview dashboard template

Not Providing Enough Feedback

Finally, no team member of yours can work more efficiently if they don’t receive enough feedback (and assistance, when needed). Antonella Galiano of Petzyo emphasizes the importance of constructive and frequent feedback for making the most out of well-set KPIs and maintaining the employees’ motivation.

“I would say that the number one mistake is not providing enough feedback. If managers do not provide enough feedback their employees will lose faith in the previously agreed goals,” says Galiano.

“A good manager needs to have frequent touchpoints with his or her employees where he or she can give a quick update on how things are going. This provides the chance to give feedback and improve the overall outcome of your goal-setting.”

Using Your KPIs the Right Way

KPIs can be a loyal ally on your way to success, but only if you set them and use them correctly. It may be a challenge to choose and define the right ones for your company, but investing your time and resources into this part of your strategy is undoubtedly a good move.

KPIs that are wrong for your business, not shared with your team, or ones that you ignore can do a lot of harm by letting great opportunities slip through your fingers, or even worse – not warning you about red flags that you could act on and prevent potential issues.

These 10 KPI mistakes are among the most common ones. With that in mind, apply the tips we’ve presented and you can bet you’ll be on the path to success!

About the author
Stefana Zaric
Stefana Zaric Stefana Zarić is a freelance writer and a teacher fluent in several languages. She has recently started her own business and educates future writers who want to build a career in marketing. When not working, Stefana loves to read books, play with her kid, and dance salsa.
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