What’s the difference between KPIs and metrics?
When it comes to tracking and measuring business performance, it may seem easy to overcomplicate things. And, verbiage might be one of those areas where it seems inconsequential.
But there are key differences between KPIs and metrics, not just by definition, but in the role each one plays for measuring and ultimately improving your company’s performance.
So, what’s the difference between the two? And how do you measure both?
In this guide, you’ll learn:
What is a KPI?
A KPI or a key performance indicator is a quantifiable value used to track progress against (individual, team, company) set goals. KPIs provide direction towards achieving desired results and can help your business make better-informed decisions.
A good KPI must be:
- Well-defined and measurable
- Relevant to your business
- Able to provide a clear-picture of recorded performance towards achieving set targets and business objectives
Editor’s note: Want to get notified when important KPIs trend up or down? Get Databox alerts for your KPIs now.
What is a Metric?
A metric is a quantifiable measure used to track progress and evaluate success.
In particular, business metrics are used to track progress and performance in certain areas that are critical to the health of a business, such as revenue, customers, employees, and so on.
It’s important not to confuse a metric with a measure too. While a measure is a fundamental or unit-specific term, a metric can be derived from one or more measures.
Related: How to Choose the Right Performance Metrics To Track for Your Business
Example: KPIs vs. Metrics
To further clarify, here are 5 examples of KPIs:
- Number of blog articles published this month
- Keywords in top 10 search engine results
- Number of customers retained this month
- Number of engaged qualified leads in sales funnel
- Percentage of overdue project tasks
In the same regard, here are 5 examples of metrics:
- Increase website traffic: The number of people that visit your website.
- Increase email click rates: The number of people that click on links included in your sent email.
- Increase employee happiness: How happy and satisfied your employees are with their jobs.
- Revenue Growth: The increase or decrease in the company’s sales within a specified period of time.
- Published content: The number of content produced and published within a specified period of time
Editor’s note: Did you know that you could view your dashboards from your mobile device, tablet or Apple Watch? That’s right. With the Databox Android or iOS mobile app, you can literally wear KPIs in your pocket, or on your wrist!
What’s the Difference between a KPI and a Metric?
KPIs are tied to specific goals; metrics are data points:
“In my opinion, a KPI is a business outcome or a goal that a specific team or department is trying to achieve,” Michael Bibla of Atomic Reach explains.
“Metrics are different data points in our funnels or analytics platforms that, when accumulated, make up a KPI.”
“For example, if you measuring # of signups for a webinar, the # of clicks on an ad or an email promoting the webinar and the conversion rate of the webinar landing page itself are metrics that add up to the KPI of signups. That is the core difference that many marketers mix up.”
The example above shows that a single KPI can have multiple metrics. Our research shows that 75% of experts agree:
Karlee Tate puts that into practice: “At Superior Honda, our KPIs include lead generations from actions such as form submissions on our website. These leads help us visualize how our marketing is helping to achieve our sales goals. Some metrics we look at our social media engagement or the number of clicks we receive from digital ads.”
Jeremy Cross of Virtual Team Building adds: “For us, KPIs tend to be goal-oriented, for example, having a KPI of how many leads we generate in a month.”
“Metrics are the numbers that inform these goals, but not directly goals themselves. For example, metrics we track are page views, SEO position, bounce rate, and similar.”
KPIs have a timeframe:
“KPIs are specific short term business metrics that I set for myself and my team,” Kevin Miller of The Word Counter says.
“These are things that I want to accomplish typically in the next 30, 60, or 90 days. That differs from metrics because I think of those as basic growth marketing terms like conversion rate, revenue per page, traffic by source, bounce rate, pages per visit, and things of that nature.”
Tony Mastri of MARION Integrated Marketing agrees: “KPIs measure an important objective over a set period of time, whereas metrics aren’t necessarily tied to an important objective or certain time frame.”
KPIs boil down to revenue:
“While the original definition of a Key Performance Indicator is overly broad, my rule for a “True KPI” is that always relates back to how your company makes money – sales/revenue, leads, cost, and the ratios that combine them all (ROI, CPA/CPL, etc.),” Amplitude Digital‘s Jeff Ferguson explains.
“Everything else is a “diagnostic metric” that helps you answer why your KPIs are going in the right or wrong direction.”
Not every metric is a KPI, but every KPI is a metric:
“Think of metrics like characters in a story,” G2‘s Daniella Alscher explains. “Each character is part of that story and is there for a reason. But some of those characters only appear on a page, others show up in every chapter, and then there are those characters – the main characters – that a story can’t be told without.”
“Those main characters are the KPIs of your business’ story. Other characters are the metrics, which are there to assist the storytelling and support your main characters.”
“In other words, there are a ton of different metrics to choose from, but some are more important than others when it comes to your business goals. Those are your KPIs.”
How Many KPIs Should My Business Track?
We already know that one single KPI can have many metrics tied to it. So, how many KPIs do you actually need to keep track of?
According to Digi Elephant‘s Subhash Rao, “great strategic plans have 5-7 clear Key Performance Indicators that keep the pulse on how you’re performing against your plan.”
Most of our experts agree with Rao. Almost three-quarters track less than 10 KPIs for their business:
Related: 18 SaaS Metrics and KPIs Every Company Should Track
5 Tips for Measuring Both KPIs and Metrics
You’ve got a list of KPIs you want to track and the metrics that will help you do it. Here’s how our experts manage that process:
- Create KPIs for each channel
- Determine which metrics you need to calculate a KPI
- Use a dashboard to keep track of your metrics
- Add context to evaluate if you meet KPIs
- Use ratios to measure KPIs
PRO TIP: How Are Users Engaging on My Site? Which Content Drives the Most Online Activity?
If you want to discover how visitors engage with your website, and which content drives the most engagement and conversions, there are several on-page events and metrics you can track from Google Analytics that will get you started:
- Sessions and % new sessions. How much traffic does your website receive on a daily or monthly basis?
- Sessions by channel. Which channels are driving the most traffic to your website?
- Average session duration. How long do visitors spend on your website on average?
- Pageviews and pageviews by page. Which pages on your website are viewed the most?
- Average time on page. What is the average time users spend on a specific webpage?
Now you can benefit from the experience of our Google Analytics experts, who have put together a plug-and-play Databox template showing the most important KPIs for monitoring visitor engagement on your website. It’s simple to implement and start using as a standalone dashboard or in marketing reports, and best of all, it’s free!
You can easily set it up in just a few clicks – no coding required.
To set up the dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your Google Analytics account with Databox.
Step 3: Watch your dashboard populate in seconds.
1. Create KPIs for each channel
“[Human Marketing] looks at metrics and KPIs. We define KPIs as the main goal of what we are trying to achieve,” says Nicole Suther.
“Each channel has it’s own KPI. Whereas metrics are what influence the KPIs. We look at goal metrics and adjust our strategies in order to improve these metrics and meet our KPIs.”
Suther continues: “A good example is that we have ROI KPIs for some channels, such as SMS. However, we look at engagement metrics and revenue metrics to make adjustments to our strategies to hit our key metrics and hit our overall KPIs.”
2. Determine which metrics you need to calculate a KPI
In order to calculate a KPI, you need to identifies your metrics first.
“You cannot have KPIs if you do not know where you want to go,” Ardent Growth‘s Skyler Reeves explains. “For example, a KPI could be something like: Increase the conversion rate of CTAs on the blog by 30% this quarter.”
“We measure metrics based on what questions we have and what data (and tools) we have available. When forming a strategy, we may check in on a few metrics that were not part of our current KPIs. As such, measuring metrics tend to be a bit more ad hoc.”
“We measure our KPIs methodically, however. Frequency depends on the organization level. An individual or team may measure their KPIs daily. Our departments measure them weekly, and at the executive level, we evaluate them monthly. We primarily use spreadsheets to manipulate and analyze our data still,” Reeves continues.
Mia Liang adds: “At LightStep, one of our big KPIs is to get users to our SandBox so they can demo the product. Metrics that help us understand how to reach that KPI might include page views, bounce rate, or time on page to see what could cause users to drop off on the journey to a KPI conversion.”
3. Use a dashboard to keep track of your metrics
“All our metrics are driven by third-party data that said they do have some errors from time to time. Which is why we provide various data points and measure averages just in case if one software differs from the other one,” says Milosz Krasinski.
SH1FT‘s Aristide Basque adds: “We measure KPI’s by setting objectives and comparing them to it every month. Metrics allow us to see growth in other areas and help us understand why we did or didn’t reach our goals.”
Editor’s note: Don’t know where to start? Use this free, simplified, and concise Google Analytics Top 10 KPIs Dashboard Template to visually monitor three categories of KPIs from Google Analytics.
If you don’t know where to start, check out our library of dashboard templates. We have over 200 templates that were pre-built by our community of sales, marketing, and business experts.
Bonus: Create Scorecards for high-level metrics and have a complete picture of how your business is performing at any moment.
4. Add context to evaluate if you meet KPIs
“KPIs are data-based, but human analysis should be involved in finessing the data to fit the real-world context,” Home Grounds‘ Alex Azoury explains.
“Sometimes, KPIs might be missed, but a real-world situation such as coronavirus shouldn’t be able to derail a salesperson’s bonus just because they came up short. This is the human element of evaluating KPIs against various metrics tracked through automation.”
5. Use ratios to measure KPIs
“To measure KPIs, you have to take ratios into account,” says Anjana Wickramaratne of Active Digi Solutions.
“A ratio divides one sum or total by another sum or total. It’s different than the average because the denominator isn’t a count of the population; it’s usually another measure of the same population:”
- Total sales revenue received divided by total sales revenue invoiced.
- Total sales revenue divided by total hours spent on sales calls that generated that revenue.”
Wickramaratne continues: “When you measure metrics, you have to take all the relevant information going into the metric and workaround on that data. For example, productivity, This metric looks at the company’s overall capabilities—how well it uses its resources. Productivity shows the relationship between inputs and outputs.”
“How much are you getting out after all that you put into a project? The ideal productivity outcome is creating more for less.”
Obaid Khan explains how they do this at Planet Content: “Metrics help you track a single business process while KPIs tell you how effectively you’re achieving your business goals or objectives.”
“You directly measure metrics like clicks, but for KPIs, you compare that number with an objective or goal and see how much of it you’ve achieved. That percentage is how you measure your KPIs.”
Editor’s Note: This HubSpot Sales Manager KPIs Dashboard Template allows you to monitor your sales team’s output and outcomes, including average deal size, the number of deals won, new deals created, amount closed, and more.
Makensie Thompson of Famoid summarized this topic perfectly: “Metrics tell you data. KPIs help you grow your business to hit goals based on this data. Both of these factors are needed to improve your ROI continually, so you have goals and numbers to work with. No matter if you are looking to increase sales, traffic, or social reach, it’s all the same.”
All ready to start tracking your metrics? With our business metric tracking software, there’s no more need to log into multiple tools to track important company metrics. You can even automate dashboard snapshots, performance alerts, and company scorecard performance in Slack with Databox’s Slack integration. Get started today.