The intended audience for your business dashboard will help determine which metrics and key performance indicators (KPIs) you should include. People often think that metrics and KPIs are one in the same. However, there are a few differences between these two types of visualization.
What Is a Metric?
A business metric is a quantifiable measure that businesses use to track, monitor, and assess the effectiveness of business processes. The business metrics that you include on your business dashboard should be tailored to fit your audience. You wouldn’t necessarily include the same metrics for every area within a company.
Each area of business will want to see metrics specific to their initiatives. For example, the marketing department would track campaign success, while the sales team monitors new leads and sales to date. Ensure that when you are planning your business dashboard you consider the audience and which metrics will best fit their needs.
Additionally, providing context is essential to the effectiveness of business metrics. The benefit of tracking business metrics comes when they are compared to established benchmarks or strategic goals. This context helps business leaders to stay on track with goals, and also take action when areas are falling behind plan.
Some examples of business metrics include:
- Sales revenue
- Customer loyalty and retention
- Churn rate
- Productivity ratios
- Size of gross margin
- Monthly profit and loss
- Overhead costs
- Variable cost percentage
- Inventory size
- Online conversions
- What Is a KPI?
A key performance indicator (KPI) is a business metric used to evaluate the performance of specific factors and strategic goals that are crucial to the success of the organization. KPIs provide insight into how successfully an individual, team, or company is reaching their targets, and measures the performance against key business objectives.
Some examples of KPIs include:
- Sales growth
- Sales opportunities
- Sales target
- Product performance
- Sales per sales representative
- Marketing ROI
- Goal completion rate
- Cost per lead
What Is the Difference Between a KPI and a Business Metric?
KPI and business metrics are similar because they both measure how a business is doing, against strategic goals and initiatives. The difference lies with the generalness of each. A business metric looks at how a business process is measuring up against goals, while a KPI target critical areas of performance.