A key performance indicator (KPI) is a metric used to measure the performance of a business or organization against its goals. KPIs are specific, measurable, and actionable, and they are used to track the progress and effectiveness of various aspects of a business or organization.
KPIs can be used to measure a wide range of business activities and outcomes, including financial performance, customer satisfaction, employee engagement, and operational efficiency. Some common examples of KPIs include:
- Revenue: The total amount of money a business earns from its products or services.
- Profit margin: The percentage of revenue that is profit, after deducting all costs.
- Customer acquisition cost: The cost of acquiring a new customer, including marketing and sales expenses.
- Customer retention rate: The percentage of customers who continue to do business with a company over a period of time.
- Employee turnover rate: The percentage of employees who leave a company in a given period of time.
KPIs are important because they help businesses and organizations track their progress and identify areas for improvement. By setting and monitoring relevant KPIs, businesses can make data-driven decisions and take action to improve their performance.