KPI vs. Metrics: What Are the Differences?

Do you have a clear sense of the goals you're working towards? Are you sure you're tracking the right things to help you get there? If not, some clarity on key performance indicators (KPI) vs. metrics can help you out.

Ultimately, KPIs are a measurement of a business's success. KPIs can be anything from revenue to attendance to the degree of customer service your company offers. Metrics determine where your KPIs are greater or lesser than what you've set up as a standard.

Understanding all of this, what's key when it comes to using KPIs is to measure the right things. There are ultimately fewer uncertainties in business when you know how to hit your markers.

KPI vs. metrics. Not sure what all the difference is? Find out what the key differences are below.

KPI vs. Metrics: Definitions and Key Differences

KPIs are the key performance indicators used to determine how well your company is performing and if you're meeting the goals and objectives you've set for the company. There are several types of KPIs to measure, but they aren't helpful for your business. 

You'll know you're using the right KPIs because you'll receive helpful information about your decisions. An in-depth review of this data will make it easier for you to make more informed decisions in the future.

On the other hand, metrics are the quantitative method of measuring your KPIs. They aren't as critical to overall business operations in the way that KPIs are, but that doesn't mean you shouldn't use them.

Metrics can be useful when you're looking to determine how well various activities you've developed are progressing. Before you can improve the performance management of your business, you've got to educate yourself and answer, "why is performance management important?"

Key Performance Indicators (KPIs): Types, Usage, and Examples

There are several types of KPIs you might consider measuring as a part of your overall company goals. These KPIs include:

• High-level indicators

• External indicators

• Low-level indicators

• Internal indicators 

• Lagging indicators

• Non-financial indicators

• Leading indicators

Each of these types of KPIs serves there own specific purpose and provides various forms of data your team can use moving forward. Some examples of key performance indicators include NPM.

Net profit margin depicts how well your company is performing based on incoming revenue during a specified period of time. This doesn't include taxes or business expenses that must be covered.

Another KPI to keep an eye on is your CRR or your customer retention rate. This directly depicts the customers you retain by considering factors like customer spending habits and the costs of marketing your products to your target audience.

Lastly, HCVA or human capital value added is also a KPI to monitor. It considers and measures how much value your employees bring to your company. 

It evaluates the revenue you make in combination with overall operational costs and the cost to bring on and retain employees. After all, your business doesn't run as effectively as it could without your employees.

Employees are oftentimes the first interaction that customers have with your business.

Metrics: Types, Usage, and Examples

While we mentioned that metrics are quantitative, there are several other types that can prove useful for your business, including:

• Goal metrics

• Vanity metrics

• Informational metrics

• Business metrics

• Qualitative metrics

• Corporate metrics

Some of the metrics to measure include the implementation of your business's marketing strategy. This is the way of measuring how well employees are using the proposed strategy to achieve company goals.

This helps to better determine what changes need to be made to increase future sales. Another metric to monitor is the amount of website traffic generated by your marketing across platforms such as social media.

It's important you generate website traffic, both organic and paid to increase the chances of converting website visitors into paying customers. This would be shown in the conversion rate of your website.

From the first click to the final click to buy a product, the entire process should be monitored by your website and presented to your team in the form of data to be monitored and used for future marketing strategies.

KPI vs. Metrics: Benefits of Both

The first benefit your brand stands to gain when using either KPIs or metrics is improved team communication. This form of communication makes it easier for everyone involved to understand the company's standings in the industry and chosen market.

Another benefit is that the data can help motivate everyone to work harder and together to achieve the goals and objectives that have been set for them to achieve. Once the goal is met, the performance measurements might even compel some team members to strive to surpass the goal in front of them. 

Lastly, the use of both of these can help mitigate future issues. These issues arise when the goals you've defined aren't the best or aren't working to achieve the needs of your company or customers.

KPI vs. Metrics: Understanding Both to Drive Business Success

 Before you can begin measuring your company's performance, you need to understand the difference between KPI vs. metrics and how both can work together for the benefit of your company. Again you'll need to determine which measurements are beneficial and move on from there.

Want more information that can help your business continue to thrive? There's tons of other useful information you'll find in this section that can help spark business innovation and creativity.

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