KPI (key performance indicator)
Also known as: Key performance indicator
In short
A selected measure used to evaluate progress toward a defined business objective over an agreed period.
Choose the measure that informs a decision
A key performance indicator links measurement to an objective. A dashboard may contain hundreds of metrics, but only some indicate whether the team is achieving its intended result.
A useful KPI definition names the metric, calculation, data source, reporting period and target. It also identifies who reviews the result and what decision it informs. Without those details, two teams can use the same label for different numbers.
Supporting metrics remain valuable. For example, click volume can explain a change in acquisition performance without becoming the main success criterion itself.
Illustrative example
Imagine a retailer deciding to evaluate acquisition using cost per completed purchase for a monthly campaign review. The team specifies which campaigns and purchase events count, how late conversions are handled and who checks the report.
CTR and product availability remain diagnostic measures. A strong CTR does not override missing purchases, and an inventory issue may explain why a campaign missed its objective.
Avoid a target without context
Selecting a KPI does not prove that the chosen target is attainable or commercially sensible. Use verified business requirements and consistent measurement to establish the target. Review related outcomes so optimizing one number does not hide another problem, such as increasing order value while reducing the number of completed orders.