KPI is an acronym formed from the initials of the terms: Key Performance Indicator. KPIs are metrics that help you identify the performance of a particular action such as a marketing strategy. These measurements indicate your level of performance based on the objectives you have set previously.
In a changing environment as it is today, it is necessary to compare the results periodically you are achieving in a marketing campaign and the objectives set. This indicator will allow you to determine if you are on track or if there are negative deviations. If you are not meeting the target results, the KPIs will allow you to realize and react in time.
“What cannot be measured cannot be controlled; which cannot be controlled cannot handle; what cannot be managed cannot be improved."
Management indicators or KPIs are grouped graphically in dashboards for managers to be agile in decision-making. The scorecard includes the primary key indicators for the company and visual form of the desired information.
Features of a KPI
The following are the main features of a KPI to help you better understand it.
As mentioned above, KPIs are metrics. Therefore its main characteristic is that they are measurable in units. Example: 1, 2, 100, 1000, 1000,000
If you can measure the performance, you can quantify it as well. For example, the number of sales, customers, or profit margins. There are also many indicators that are measured in percentage.
A particular KPI should focus on one aspect at a time to make it easier to analyze. A KPI must also be concrete.
You must be able to measure it in time. For example, you can measure the sales in weekly, monthly, quarterly or yearly basis.
The term itself refers to this feature “key” performance indicators. They serve only those factors that are relevant to your company.
KPIs have to report, monitor, evaluate and ultimately help make decisions. It is also vital in assessing whether a marketing strategy is effective. Each company has its management indicators since each organization, and business model is key factors to measure different. An industrial production will focus on indicators of production. A company that sells only via the internet will have other key indicators related to digital marketing metrics.