Metrics and KPIs: What Are They and What’s the Difference?


If you’re a small business owner, you’ve probably heard of how vital productivity statistics are to organisations. What are metrics, and how do they compare with key performance indicators (KPIs)?

Many companies improve their revenue using different techniques like generating profits for a lower or given cost. You can’t measure performances without tracking them with these tools.

KPIs have been around since the 90s, but there are a few significant differences between them and metrics. Learn the best way to track them today for your organisation right here.

Before comparing them and highlighting the contrasts, let’s first discover metrics and how they can benefit your business.

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Key Takeaways

  1. Metrics and KPIs are important tools in businesses to track performance and improve revenue.
  2. Metrics are measures used to calculate and judge an organization’s performance, while KPIs measure performance over time for specific goals.
  3. Metrics and KPIs can be used in different departments and levels of an organization, with KPIs focusing on high-level objectives and metrics being used for operational purposes.
  4. KPIs must have targets, timeframes, and deadlines to be effective, while metrics may or may not have these components.
  5. Examples of metrics and KPIs include marketing metrics, sales metrics, financial metrics, HR metrics, customer complaints, and employee satisfaction rates.
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What are Metrics?

What are metrics, and why are they vital for businesses? In simple terms, they calculate organisational processes and judge your performance level.

You can use hundreds of quantifiable measures because there are many contrasting companies and methods.

Some benefits of using business metrics in organisations include:

  • Performance improvement: The correct metrics can inform you of what’s working well or poorly and provide directions on improving processes.
  • Compliance: Some measures can track requirements from regulatory and government agencies to ensure compliance.
  • Identifying problems: They can help you identify any emerging issues in your business and correct them before they get out of control.
  • Improved communication: Reporting metrics are crucial communication measures for people across the company like shareholders, customers and employees.
  • Comparative analytics: Some metrics can reveal if your business is doing well or underperforming on key production benchmarks.

As you can see, employing quantifiable measures in your organisation can benefit it significantly. 

Here are some key business metric examples that companies use to track:

  • Marketing metrics: Including cost per lead, customer acquisition costs and retention and conversion rates.
  • Sales metrics: Examples of sales metrics are net sales revenue, growth and churn rates, and quota attainment.
  • Financial metrics: The metrics can help measure net and gross profit margins, working capital and current ratio. 
  • HR metrics: HR measurables include career path ratios, employee turnover and revenues, and net promoter scores.
  • Saas metrics: Measuring software services, including customer engagement scores, monthly recurring revenue and average revenue per account.

Let’s first take a quick look at key performance indicators before learning the differences between KPI vs metrics.

What are KPIs?

A key performance indicator measures performance over time for a specific goal or objective. Many organisations strategically use them to help their company move forward.

KPIs are very effective in businesses. They help provide targets, milestones, and valuable insights to enable team members in departments to make better decisions.

Some KPIs measure high priority levels in organisations, like overall performance. Others can be low-level and focus on departments like sales, consumer satisfaction and marketing. 

Many companies use reporting tools and business analytics software to track their key performance indicators. They can also trace customers, finances and general processes.

Even 95% of leading companies agree that significant business goals should include marketing analytic KPIs. 

Examples of key performance indicators include the following:

  • The number of customer complaints
  • The percentage of overdue tasks
  • Production yield
  • Staff revenue
  • Availability and downtime
  • Managing process costs
  • The average time it takes to complete a goal
  • The volume of processing errors
  • Interest rates
  • Employee satisfaction rates
  • Operating margins

Measuring the correct KPIs is crucial because they allow you to monitor the success and health of your business.

What are metrics when compared to key performance indicators? Let’s take a look at the main differences.

The Main Differences Between Metrics and KPIs

KPI and metric tools seem very alike. However, separating them and understanding their differences can give you a step up and boost your business.

The most significant difference is that metrics can exist without a target. On the other hand, KPIs are more laser-focused on specific goals.

All key performance indicators are metrics. But not all metrics are KPIs. It doesn’t seem very clear at first, but it’s straightforward.

KPIs must have targets, timeframes, and deadlines to achieve goals relevant to your company’s outcomes. Metrics may or may not include them.

For example, metrics tend to:

  • Measure a company’s performance in specific processes and business activities
  • Metrics are relevant for particular departments and other organisational areas
  • They offer a low-level perspective
  • Businesses tend to use them for tactical or operational purposes

In contrast, this is how KPIs differ:

  • Measure a company’s progression towards key business objectives and goals
  • KPIs are relevant across different organisational departments 
  • They offer a high-level perspective
  • Businesses tend to use them for strategic decision-making

As you can see regarding KPI vs metrics, businesses need to link the former with objectives and goals. However, the latter doesn’t need targets to exist as it measures performance.

Think of a KPI as a motivational guide for your business outcome. Metrics are more like a map for your departmental performances. 

How to Track Your Metrics and KPIs.

The best way to track and keep on top of your business metrics and KPIs is by using tracking software.

Many modern-day and sophisticated software trackers allow you to monitor, collect, and analyse crucial business data. You can access essential KPI and metric info from your phone.

Following these simple steps can also help you to keep on top of your measurable tools:

  • Set the correct KPIs and metrics for your business: You must set well-defined and specific baseline goals and objectives. Every one you set must be measurable to make it easy to track. They also need to be relevant to what you’re doing.
  • Use the right dashboard for your company: Keeping track of your metrics and KPIs with a pen and paper is easy but inefficient. Some dashboards contain excellent visual custom widgets, enabling you to set clear goals and keep up with performances.
  • Regularly evaluate your KPIs and metrics: It’s essential to observe your data to ensure it’s accurately tracking your performance. If your business processes and targets change, you must readjust them to align with your goals.
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Stay on Top of Your Business With Metrics and KPIs

Now you know the answers to ‘What are metrics?’ and ‘What’s the difference between metrics and KPIs?’ One calculates defined goals within a timeframe, and the other measures processes.

Plan your strategy and adopt what works best for your company by knowing the difference between these tools. Then, take advantage and turn the data into actionable insights.

Growing a business surrounded by confusion with no direct targets is impossible. Setting clear goals increases communication within your organisation with the right metrics and KPIs.

Are you keen to learn more about metrics and KPIs? If you are, contact our team to see how they can impact and help boost your business today.


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