.png)
New to Metrics & KPI's
Use your phone to open our Inquiry form, we will send you an information pack
Metrics
A set of figures or statistics that measure results
KPI
To track a key area of business performance
Key Result
This is the results of the KPI tracking Current, Starting and target values.
What is a Key Performace Indicator (KPI)
To track a key area of business performance
Example: Accounts receivable turnover
How fast you collect your sales
Department: Finance
Net Credit Sales
Average Accounts Receivable
What is a metric
A set of figures or statistics that measure results
Example: Customer Renewal rate
Department: Marketing
Customers that renewed this month
Customers up for renewal this month
What is the difference?
Firstly, they sound the same and can have some overlap, the concept can be confusing at first the main thing to remember is a Metric is a measurement used to form part of a KPI
Using the examples above, Net Credit Sales, Average Accounts Receivable and Customer renewal rate are all Metrics.
Use the Customer Renewal rate you can apply this Metric to marketing actual costs to give you an insight into the cost of acquiring new customers or how much is spent to acquire a new customer.
Why are they both so important
You cannot have a KPI without a metric first
Customer Renewal rate on its own is inciteful to your business allocating this Metric further to a KPI allows for traceability to the day to day operations.
Example:
We need to increase cold calling for our Sales team we know that an average cold call is 6 minutes (Previous metric data) and you know the Labour costs (Previous metric data) You need 10 more additional cold calls a month that's 60 minutes, you acquired 3 new customers this way.
Key Result
This is the combination of the Metric & the KPI this shows current values, starting values & Target values.