Key Performance Indicator (KPI)
A Key Performance Indicator (KPI) is a measurable value that shows how effectively a business is achieving its objectives. KPIs vary by department and strategy but should directly impact business outcomes like revenue, customer retention, or operational efficiency.
What Is a Key Performance Indicator?
A KPI is any metric that matters to your business strategy. Unlike vanity metrics (page views, follower counts), KPIs directly tie to business outcomes. For a sales team, KPIs might be conversion rate or deal size. For support, KPIs are first-call resolution and customer satisfaction. Plura's conversation analytics turn raw interaction data into KPIs—revealing conversion rates, customer satisfaction trends, and agent performance metrics that matter to your business.
How KPIs Differ From Metrics
All KPIs are metrics, but not all metrics are KPIs:
- Metrics measure activity: Website traffic, email sent, calls handled
- KPIs measure outcomes: Revenue generated, customers retained, issues resolved
- Metrics can be vanity: High traffic doesn't guarantee revenue
- KPIs always matter: They directly impact business goals
- One company's KPI can be another's metric: Context determines importance
Why KPIs Drive Strategic Focus
Organizations that define and monitor KPIs make better decisions. KPIs create alignment—everyone understands what matters. They enable accountability because performance is measurable. They reveal where to invest resources because you can see which activities drive results. Plura's integrated dashboards surface KPIs in real-time so teams can act on performance trends immediately.
How Plura Helps Track KPIs
Plura simplifies KPI management:
- Unified visibility: Track KPIs across voice, SMS, and chat in one platform
- Real-time reporting: See performance trends as they happen, not in monthly reports
- Automated tracking: No manual spreadsheets—KPIs are calculated automatically
- Actionable alerts: Get notified when KPIs fall below targets so you can intervene
Common Business KPIs
While KPIs vary by industry, some universally important metrics include:
- Revenue metrics: Total revenue, revenue per customer, profit margin
- Customer metrics: Conversion rate, churn rate, customer acquisition cost, lifetime value
- Operational metrics: First-call resolution, average handle time, employee productivity
- Satisfaction metrics: Net Promoter Score, customer satisfaction, employee satisfaction
FAQs related to
Key Performance Indicator (KPI)
How many KPIs should I track?
Focus on 3-5 KPIs per team or department. Too many KPIs dilute focus and create confusion. Each KPI should directly support your strategic objectives. Executive leadership might track 10-15 overall KPIs across the business.
How do I choose which KPIs to track?
Start with your business objectives. If your goal is revenue growth, track conversion rate and customer acquisition cost. If it's customer retention, track churn rate and customer satisfaction. Define KPIs that ladder up to these goals—this ensures alignment across the organization.
What's the difference between leading and lagging KPIs?
Lagging KPIs measure past results (revenue achieved, churn rate). Leading KPIs predict future results (conversion rate, customer engagement). Best practice: track both. Leading KPIs alert you to problems before they appear in lagging KPIs.
How often should I review KPIs?
For fast-changing metrics (daily sales, chat response times), review daily. For stable metrics (monthly churn, quarterly revenue), review weekly or monthly. Use real-time dashboards for critical KPIs so teams see performance as it happens.
What should I do if a KPI is underperforming?
Investigate root causes: Is it a process issue, training issue, or market condition? Define an improvement action plan with specific targets and timelines. Track progress weekly. Involve the team in problem-solving—frontline employees often know what's blocking performance.