KPI (Key Performance Indicator)

KPI stands for "Key Performance Indicator" and is a measure used to give an indication of how a company, a department, a group or an individual is performing against set objectives. KPIs can also be used to incentivise and motivate performance.


What does KPI mean?

As written above, KPIs mean Key Performance Indicator. It is not just a measurement point, but also a method to continuously assess performance against set objectives. Whether you are a large or small company, you can benefit from setting KPIs for your areas of focus.

For example, KPIs can be used in relation to sales, marketing, customer satisfaction and employee retention. It is important that the objectives are clear and measurable, otherwise you have no chance of evaluating them afterwards. In marketing, for example, KPIs can be higher turnover and a greater visibility on Google.

Example of process for KPIs

How can I work with KPIs?

If you want to work with KPIs, you need to identify some focus areas in your company where there is potential for development. All this with a focus on achieving the next level of the company.

The basic purpose of setting KPIs is to increase productivity through greater motivation. This is done through a continuous evaluation of how the KPIs are being achieved and what and how corrections may be needed.

A distinction is made between low-level and high-level KPIs:

  • Low-level: Low-level KPIs focus on the performance of individual departments within the company.
  • High-level: High-level KPIs focus on several or all departments of the company.

In order to work with KPIs in an appropriate way, it is important that the goals you set are both clearly defined and measurable. A good tool for this is the SMART model, which indicates what the KPIs should be:

  • Specific. The objective must be specific.
  • Measurable. It must be possible to measure progress.
  • Attainable. It must be possible to achieve the goal.
  • Relevant. The goal must be relevant to the company.
  • Time-bound. It should be possible to achieve the target within that timeframe.

The process is therefore to identify relevant focus areas in your business, set one or more objectives based on the SMART model shown above and continuously measure your performance on the objectives. The focus areas can be based on your company's mission, vision and current business objectives.

Example of KPIs for a webshop

Do you want to set KPIs for a webshop, these may include, for example:

  • number of visits
  • number of downloads
  • number of leads
  • number of page views
  • number of sales
  • conversion rates
  • turnover.

More concretely, the KPIs could be:

  • to increase turnover by 10 % in the next financial year
  • the average order size to be increased by 5 %
  • to increase the conversion rate of visitors from Google by 3 percentage points
  • to increase the number of visitors to the website by 15 %
  • and much, much more.

Through an analysis of the website, you can use the KPIs above to examine where the greatest development potential lies and thus prioritise these KPIs. You can then set a series of operational targets for how to improve the KPIs - for example, technical challenges you need to solve to achieve your target, or specific marketing efforts you need to work on. Read more about setting KPIs in relation to the work with SEO.

Frequently asked questions

What is KPI?

A KPI is a measurable value used as an indicator of the extent to which an objective has been achieved. For example, companies can set KPIs for their marketing efforts.

What is KPI an abbreviation for?

KPI is an abbreviation for Key Performance Indicator. In Danish, the English term is usually used.

What are KPIs used for?

KPIs are measurement points used to assess and evaluate the impact of a work. At the same time, they provide incentives and motivation for the work.

How to measure KPIs?

The measurement of KPIs depends on the selected KPIs. For example, some can be measured via quantitative online statistical tools, while others can be measured via qualitative surveys.


Martino Mike d'Apuzzo

Partner & Senior Digital Advisor

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