Defining Great Key Performance Indicators for Your Business

Key Performance Indicators (KPIs) can make or break a business. A great KPI is linked to a specific goal and helps answer important questions while providing clarity on how success will be measured. However, with so many factors to consider, it can be difficult to know where to start. Here are four essentials for defining great KPIs for your business.

1. Good KPIs Are Linked to a Goal
   The first step in defining a great KPI is to ensure that it is linked to a specific goal. With a goal, it will be easier to measure success and determine whether or not the KPI is actually helping your business achieve its objectives.
2. Who Is Receiving This Info and Why?
   Before you define what question your KPI will answer, you need to consider who will be receiving this information and why they need it. This will help you determine what type of data you need to collect and how it should be reported.
3. Define What Question We Have an Answer For
   After considering the audience and the purpose of the KPI, you can define what question it will answer. This will help you determine the metrics you need to track and how they should be calculated.
4. How Will This KPI Be Used?
   The final step in defining a great KPI is to think about how it will be used. Will it be used to track progress toward a goal? Will it be used to compare results against other businesses? Knowing how the KPI will be used will help you determine what data needs to be collected and how often it should be reported.

A great KPI is essential for any business that wants to succeed. By following these four steps, you can ensure that your KPIs are well-defined and informative, helping you make better decisions for your business.