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Key Performance Indicator (KPI)

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively an organization is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets.

What is a KPI with an example?

A KPI is a specific metric that provides insights into the performance of an organization, department, or individual in relation to its goals. For example, a common KPI for a sales team might be “Monthly Sales Revenue,” which tracks the total sales amount for a given month.

What are 5 KPIs?

  • Customer Satisfaction Score (CSAT): Measures customer contentment with a product, service, or interaction.
  • Net Profit Margin: Assesses the profitability of a business by comparing net profit to revenue.
  • Employee Turnover Rate: Indicates the number of employees who leave the company in a given period.
  • Return on Investment (ROI): Evaluate the profitability of an investment relative to its cost.
  • Conversion Rate: Measures the percentage of visitors to a website that complete a desired action.

What is the key performance indicator?

The key performance indicator is a specific metric that organizations use to determine how well they are achieving their operational and strategic goals. It serves as a benchmark that helps businesses understand their performance in various areas.

What are the 4 main types of performance indicators?

  1. Quantitative Indicators: These are based on numbers, such as sales figures or pass rates.
  2. Qualitative Indicators: These are based on opinions, perceptions, and beliefs, like customer satisfaction or employee morale.
  3. Leading Indicators: These predict future events and tend to have a forward-looking nature, such as the number of new customer inquiries.
  4. Lagging Indicators: These reflect the organization’s past performance, such as the total annual sales.