What is KPI (key performance indicator)?

What is KPI (key performance indicator)? 

What is KPI (key performance indicator)?

KPI stands for key performance indicator, a quantifiable measure of performance over time for a specific objective. In other words, A key performance indicator (KPI) is a measurable value that shows how effectively a company is achieving its core business objectives. Or, Key performance indicators (KPIs) are quantifiable measures that gauge a company's performance against a set of targets, objectives, or industry peers.


A key performance indicator is a measurable value indicator of how effectively a company is achieving key business objectives. Companies use KPIs at multiple levels to evaluate their success in reaching goals. High-level KPIs can focus on overall business performance, while low-level KPIs can focus on sales, marketing, HR, support, and other segment processes.



So what is the definition of KPI? What does KPI mean? What does KPI stand for? Here are a couple other definitions:

Oxford's Dictionary definition of KPI: A quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.

Investopedia's definition of KPI: A set of quantifiable measures that a company uses to gauge its performance over time.

Macmillan's Dictionary definition of KPI: A way of measuring the effectiveness of an organization and its progress towards achieving its goals.


What is a KPI example?

This popular acronym stands for Specific, Measurable, Attainable, Realistic, and Time-bound. This is a useful touchstone whenever you're considering whether a metric should be a key performance indicator. SMART KPI examples are KPIs such as “revenue per region per month” or “new customers per quarter”.



What are the 5 key performance indicators?

  1. Revenue per client/member (RPC)
  2. Average Class Attendance (ACA)
  3. Client Retention Rate (CRR)
  4. Profit Margin (PM)
  5. Average Daily Attendance (ADA)

In Short, KPIs offer an effective way to measure and track a company's performance across different metrics. By understanding exactly what KPIs are and how to apply them properly, managers are better able to optimize business for long-term success.

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