The Difference Between Business Metrics and KPIs

Every KPI is a metric, but not every metric is a KPI

If you’re interested in using analytics to gain actionable insights about your business, you’re going to be hearing a lot about business metrics and KPIs (key performance indicators). These terms are sometimes used interchangeably, but the reality is that they are distinct concepts.

Every KPI is a metric, but not every metric is a KPI—a point you’ll want to take to heart if you want to maximize the effectiveness of your analytics for growth and improvement.

What is a Business Metric?

A business metric is some measurable aspect of your business. Literally anything can be a metric, as long as you can measure it. Unfortunately, a metric is just a number. By itself, it doesn’t tell you anything about how your business is doing.

What is a KPI?

A KPI or key performance indicator is a special type of metric—one that has been paired with a strategic objective or target. This objective or target should be specifically aligned with your business goals. So, to put it another way, KPIs help you track performance relative to your business goals. This is what makes KPIs so effective for driving change at a business.

Now here’s where things get a bit trickier…

Metrics can become KPIs and vice versa.

If you’re tracking a metric you discover it is impacting business outcomes, your metric has just turned into a KPI and you should consider tracking it as such. Similarly, if you’re tracking a KPI and you discover you’re unable to reach a particular target or goal, or if reaching the goal doesn’t translate into real results, you may want to downgrade that KPI to a metric.

Bottom line: you need to think strategically when deciding what metrics to focus your analytics on. Make sure you’re choosing metrics that are also KPIs—ie that are also tied to specific, strategic goals or objectives.

Need Analytics Software?

Numbers out of context are just numbers. An analytics tool like MyFieldAudits gives you the power to transform raw data into actionable insights with tools like digital auditing, robust reporting, and dashboard displays. Because MyFieldAudits is a cloud-based tool that works on your smartphone, tablet, or computer, there’s no new hardware to buy and you can get started fast. To learn more, contact us at info@MyFieldAudits.com and we’ll set up a free demo for you.

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