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KPIs vs Metrics: What’s the Difference and How to Measure Both



featured image: KPIs vs Metrics- What’s the Difference and How to Measure Both

In today’s competitive business environment, tracking and measuring performance is of paramount importance. However, one common confusion is understanding the difference between Key Performance Indicators (KPIs) and metrics. In this article, we’ll demystify both terms and provide some tips to measure them efficiently.


Before diving deep into KPIs and metrics, it’s essential to understand why tracking and measuring business performance is crucial. Keeping an eye on your business objectives will help you determine whether you’re on track to achieve your goals or need to refine your strategies. And this is where KPIs and metrics come into play.

What is a KPI?

illustration of KPI, explainer

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving its key business objectives. KPIs should be quantifiable, aligned with strategic goals, and easily understood by everyone in the organization.

Examples of important KPIs can include sales revenue, customer acquisition cost, employee turnover rate, customer satisfaction level, average order value, website visits or page views per month, delivery times for goods or services, operational efficiency levels, etc. It is important to analyze these values over time to gain insight into your company’s performance and look for opportunities for improvement.

What is a Metric?

chart showing overlap between kpi and metrics

Metrics are measurements used to assess the performance of specific business processes or functions. They differ from measures, which are the numeric values used to calculate the metric. For instance, website visitors, social media followers and email open rate might be used as metrics to gauge marketing performance. Metrics can also be used to track customer engagement over time, compare various marketing channels and measure the success of campaigns. Other common metrics include customer acquisition cost (CAC), customer lifetime value (CLV) and average order value (AOV). By tracking and analyzing these metrics over time, companies can gain insight into their performance and uncover opportunities for improvement.

KPIs vs Metrics: Main Differences

KPIs are usually tied to a particular goal or objective that you want to achieve. For example, if you want to increase revenue, you might use a KPI like sales growth rate. KPIs are often used to track long-term progress and can be used to assess the overall health of your business. KPIs are typically more strategic in nature and are used to guide decision-making.

Conversely, metrics are more general measurements that can be used to track a wide range of business activities. Metrics can include things like website traffic, email open rates, or customer satisfaction scores. Metrics are often used to evaluate short-term progress and are more tactical in nature. Metrics help you track your progress toward achieving your KPIs and can provide valuable insights into how well your business is performing.

One of the most significant differences between KPIs and metrics is their level of importance. KPIs are critical indicators that are directly tied to your business objectives and goals. They are the most important metrics as they provide insight and identify progress. Metrics, while important, are general indicators that provide more detailed data broken down in segments which helps to identify areas that are performing well or need to improve.

Another difference between KPIs and metrics is their specificity. KPIs are specific to an area of the business that you want to focus on. For instance, an eCommerce store may track cart abandonment as a KPI if it’s a crucial aspect of the business. However, looking at other metrics like bounce rate, pageviews, and conversions can provide additional insights. Metrics, on the other hand, can be more general and offer a more complete picture. They’re are used to check how well the business is performing and track progress towards overall goals.

Tips for Measuring Both KPIs and Metrics

1. Define Your KPIs and Metrics:

Before you start measuring anything, you must define what you want to measure. Set clear objectives for your KPIs and metrics that align with your business goals. Identifying the right KPIs and metrics requires that you understand precisely what contributes to success or failure in your business. Once you have defined these objectives, it’s easier to identify the data points that will help you track them. 

2. Consider the Bigger Picture:

Focus your metrics on addressing specific areas of your business such as marketing, production, distribution, and sales. While your KPIs should measure the overall progress of your business against its objectives. It’s essential to remember that individual metrics can have a significant impact on achieving KPIs. For instance, your goal may be to increase sales, but if the number of users on your website are reducing, that could hinder your efforts to achieve that goal. So, tracking all your metrics is essential to get a complete picture of your business’s overall health.

3. Make Use of Tools:

Measuring KPIs and metrics requires using data and analytics tools that can gather data from multiple sources, provide insights, and visualize metrics in a way that is easily understandable. These tools help you to save time and energy. They automate the data-gathering process and provide easy-to-read dashboards that enable you to identify areas that require attention immediately. Some examples of these tools include Google Analytics, Mixpanel, and Heap Analytics.

4. Regularly Monitor and Analyze Your KPIs and Metrics:

Regular monitoring is essential in measuring KPIs and metrics. Track all your KPIs and metrics regularly to ensure that you are on track in achieving your business’s goals. Use data visualization tools to organize and display data visually so that it’s easier to analyze. Analyze your data consistently to identify trends and patterns, and consider possible factors that may affect these results. Regular reviews will allow you to be proactive rather than reactive in your business decisions.

5. Use Your Findings to Make Business Decisions:

Finally, use your data and analytics to make informed decisions about your business. Use your findings to develop strategies and tactics that will drive your business toward achieving its goals. Reinterpret your KPIs and metrics often, and be open to adjusting your goals and objectives when necessary. Continuously optimize every aspect of your business process to ensure that it is performing at the highest level possible.


Understanding the key differences between KPIs and metrics is crucial for effective business performance tracking. By knowing when to use KPIs and when to rely on multiple metrics, you can better align your activities with your overall business objectives and accurately gauge your company’s success.

Remember, while KPIs are an essential tool to maintain focus on key business goals, metrics offer granular insights into various aspects of specific business processes. Both are valuable in their own rights and should be utilized strategically to ensure the growth and profitability of your organization.

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