How To Choose the Right KPIs for Your Business

By jesse@kulapartners.com (Jesse Mawhinney)

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How can you tell if your company is growing?

Sure, you can speak to a few team leads and get regular reports on their performance. But if you’re not measuring that information against something else, how will you know when you’ve met the mark or fallen short?

As they say, what gets measured gets improved. Quantifying your current performance through key performance indicators (KPIs) will give you a framework from which to assess your progress.

But how do you choose the right KPIs to focus on for your business? The short answer is that it really depends.

While there isn’t a hard-and-fast rule for choosing the proper KPIs, there are a number of factors you should always take into consideration.

In this post, we’ll walk you through some of the factors that influence which KPIs you should focus on and help you hone in on the metrics that matter the most for your business.

Let’s get started.

One thing to remember about KPIs is that they’re meant to measure your most impactful indicators.

For instance, your social media team may have a ton of data points that can serve as KPIs. However, they should only choose the ones that align with the broader business goals. Let’s say it’s brand awareness. In this case, follower count, post reach, and impressions will likely be the social media KPI metrics to measure.

With that in mind, having KPIs means narrowing your focus on a few vital metrics that will influence your business the most.

OKR vs. KPI

Objectives and Key Results (OKR) and KPIs are often used interchangeably because both terms refer to goals that are tracked and measured. However, where they differ is intention.

Put simply, KPIs indicate if your business is hitting its targets. They are often called health metrics as they tell you how the company is doing to meet an objective that’s already set.

OKRs, on the other hand, are broad objectives for your business with the key results that will signify achievement in meeting those objectives. They are aggressive and ambitious goals that speak to the business’s big-picture vision.

For instance, let’s say a technology company has the objective of becoming one of the top 10 providers in their industry in 2021. Their key results could be:

Acquire 1,000 new customers by Q3.
Generate 3,000 leads every month.
Increase annual membership sales by 30%.

While KPIs are ideal for scaling, OKRs are designed for dramatic growth. They’re more ambitious and push teams to stretch their capabilities.

It’s also important to note that while KPIs can be the key results in your OKR, the opposite is generally not true.

For example, your marketing team could have a KPI of 3,000 leads as mentioned in the example above. However, it’s unlikely that any department would list the “Top 10” goal as their KPI as that speaks to a broader vision and has a more flexible timeline.