ERP Term
"Key Performance Indicator (KPI)"

A KPI or Key Performance Indicator is a measurable value that reflects how well a company achieves critical business goals.

KPIs are essential for businesses to track progress toward their goals. They can be used to measure progress in any company area, from sales and marketing to product development and customer satisfaction. By tracking KPIs, businesses can identify areas that need improvement and take steps to correct course.

Businesses can track a few different types of KPIs, depending on their goals. Some common KPIs include:

  • Sales numbers: This is often the most critical KPI for businesses that rely on selling products or services. Sales numbers can be compared weekly or monthly to see if the company is growing.
  • Website traffic: For businesses that rely heavily on their website, tracking how much traffic it gets is essential. This KPI can be used to gauge how effective marketing and advertising campaigns are.
  • Conversion rate: This measures how many people who visit the website actually take the desired action, such as making a purchase or signing up for a newsletter. A low conversion rate can indicate a problem with the website or the products/services offered.
  • Customer satisfaction: This KPI is important for all businesses, as it measures how happy customers are with the products or services they've received. Businesses can track customer satisfaction using surveys or other feedback mechanisms.

Businesses can track many other KPIs, depending on a companies goals and needs. The important thing is to choose KPIs that will help the business track progress and identify areas needing improvement. By tracking KPIs, businesses can ensure they are on track to reach their goals. 

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