What Is a KPI?

4 min

A KPI is a guide to know where you are in relation to where you want to be.

An effective KPI will measure only the data that is necessary to achieve a stated goal.

If your goal is to decrease call time, and the strategy you’ve defined centers around increased customer service or better use of online resources, for example, you’d want to look at those KPIs.


Revenue data would not be as relevant to your stated goal.

Let's practice:

Your goal is to increase in-store purchases and your strategy revolves around an in-store promotion. What KPI will tell you how effective your strategy is toward reaching your goal?

Quiz 1 of 1

What KPI will tell you how effective your strategy is toward reaching your goal?

a
Revenue for all stores for the last few quarters
b
Percentage of customers who participated in the promotion
c
Time each store associate spent helping customers
d
Net profits for the entire company

The correct answer is B.

The KPIs you use should give you information about a specific goal and strategy. In this case, the KPIs around your in-store promotion will give you an indication of how well the strategy is performing. The other KPIs would be more useful toward other goals and strategies.

TAKE THE NEXT STEP:

Identify a specific strategy for reaching one of your goals. What measurement data would give you an indication of how well your strategy is performing toward that goal?

Lesson complete

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