Many business owners don’t take the time to understand the difference between key performance indicators (KPIs) and metrics. Instead, they believe these to be one in the same. This isn’t exactly true.
At Dasheroo, here’s what we have to say about KPIs:
“Many companies use key performance indicators (KPIs) to measure performance of a specific business metric that is valuable to the business growth. These performance indicators are usually measured over time and are very different from department to department.”
With this in mind, it’s easy to see that a KPI can be considered a metric, however, a metric is not necessarily a KPI.
Still confused? Check this out:
- A key performance indicator is used to measure performance and success.
- A metric is nothing more than a number within a KPI that helps track performance and progress.
A KPI should be based on the following principles:
- Implement a specific objective for each KPI.
- You must be able to measure your progress (or lack thereof) over a specific period of time.
- The best KPIs are those that can be attained with a reasonable level of effort.
- Results (such as the metrics you measure) should be related to your goals.
Now that you understand the difference between KPIs and metrics, here’s something else to think about: you can dig deeper than what you see on the surface.
For example, many companies are focusing more resources on social media and related key performance indicators.
While it’s only natural to turn your attention to reach related KPIs – such as the number of active fans, followers, and connections – other details that deserve your attention include:
- Engagement rate calculations
- Return on investment
It goes without saying that KPIs and metrics are both essential to the success of your business.
Once you sign up with Dasheroo you can create your first dashboard, settle on the most important KPIs, and set your sights on the future!