A lot of marketers often get confused over “KPIs” and “Metrics”. In fact, they use them interchangeably quite often in the companies. However, they are two very different concepts. If, at all, there is one thing similar, that is both of them are quantifiable, and belong to measurements.
The term “KPIs”, standing for Key Performance Indicators, is a quantifiable measurement that measures how effectively a company is achieving its business objectives. In large organizations, different departments / business lines may use lower level KPIs to measure key success for their departments / businesses. For example, marketing department’s KPIs can be “Increase brand awareness measured by NPS score by 10 points in 2020”. As you can see here, a typical KPI has a definite target number and a time frame.
On the other hand, the term “Metrics” is more generic. It can be used in basically every project, every campaign, and every process. They are not the most important things your organization needs to measure and monitor in order to achieve your strategic business goal. Metrics are “business as usual” type of measurement. For example, in marketing campaigns, it can be “number of impressions”, “email open rate”, “click through rate”, and etc.
Sometimes, it’s funny to see some executive leaders assign the apparent “metrics” to his / her leadership team as “KPIs” to achieve. To make it clear, I have summarized a few key differences in a table below.
|Main purpose||To measure if a company is achieving its strategic goals||To measure and monitor “business as usual” for specific campaigns|
|Level||High level||Tactical level|
|How many||One per business objective||Many, as long as relevant|
|Time frame||Have a clear time frame, usually annual||On-going – can be weekly, monthly, or at the end of the campaign|
|Format||Pretty standard||In many different shapes (views, clicks, opens…)|
|Example||Increase book sales by 30% in the next 12 months||Web visits, Email delivered, Ad impression served, Video views…|
Now since you have an idea of the difference between KPIs and metrics, here is my advice on how to use them in real business life.
- Create objective-driven KPIs to measure success.
- Let metrics to guide your journey to success.
- Build a dashboard to keep track of KPIs and your on-going metrics (two slides)
An interesting side note. Since the word “metric” is generic, some may argue that KPI is also a type of metrics. You are 100% correct! KPI can be considered as a special type of metric.