How to Define Key Performance Indicators (KPIs): Types and Examples

In a data-saturated world, the challenge in measuring actions and results isn’t gathering the numbers — it’s knowing which ones to look at and what they tell you. 

Key performance indicators (KPIs) are the specific metrics you track to evaluate progress toward a goal, whether it’s sales growth, operational efficiency, or employee development. KPIs give you a clear picture of performance over time, help you identify trends, and provide a reference point for making informed decisions for how to move forward.

What are KPIs?

Key performance indicators (KPIs) are specific, quantifiable values that measure the success factors tied to your business objectives. Every KPI is a metric, but not every metric is a KPI. A metric is any measurable data point (such as website visits) while KPIs are specific metrics directly tied to strategic goals (such as qualified leads from those visits).

Types of KPIs

KPIs create focus, enable accountability, provide early warning when performance drifts, and align teams around shared definitions of success. Different types of KPIs help you analyze business performance in distinct ways:

• Leading KPIs measure activities that predict future outcomes, giving you time to course-correct before outcomes suffer.
• Lagging KPIs measure outcomes after they occur, giving you concrete indicators of success or failure.
• Strategic KPIs focus on long-term organizational goals and support strategic planning.
• Operational KPIs track day-to-day processes and efficiency, helping teams optimize workflows and identify bottlenecks.

KPIs can be either quantitative (hard numbers) or qualitative (subjective assessments). Using both captures nuance and provides a deeper understanding of how goals are progressing and what trends may be affecting the results.

How to define KPIs (step-by-step)

The best KPIs translate abstract goals (such as “grow the business”) into concrete, trackable numbers (such as “increase monthly recurring revenue by 20 percent”). Selecting KPIs strategically, rather than relying on guesswork, helps you make smarter decisions and achieve better outcomes.

Step 1: Identify objectives

State the goal you’re trying to accomplish as specifically as possible. Vague objectives lead to broad KPIs that don’t provide meaningful insights. For example, “improve customer experience” is too general to be measured by one metric. Instead, you might focus on “resolve customer issues faster while maintaining quality.” 

Step 2: Select success metrics 

Identify which metrics directly reflect progress toward your objectives, and balance leading and lagging indicators. Going back to the “resolve customer issues faster while maintaining quality” example, success metrics might include average response time, first contact resolution rate, and customer satisfaction score. 

Step 3: Set targets and thresholds

Review existing data to establish a performance baseline. Set thresholds for minimum acceptable performance, an improved performance target, and an ambitious (but still achievable) stretch goal. For example, if your customer service reps average eight and a half minutes per ticket, your performance target might be seven minutes with a stretch goal of six and a half minutes. 

Step 4: Align KPIs to teams and roles

Each KPI should have a specific person or team responsible for moving the needle on that number. High-level strategic goals (such as “resolve customer issues faster while maintaining quality”) flow into departmental KPIs (such as “decrease average response time”), which then determine individual contributor metrics (such as “decrease average response time to seven minutes within five weeks”). Assign ownership of KPIs based on what each team, role, and individual can impact through their work.

Step 5: Use the SMART KPI framework

The more specific your KPIs are, the more effective they will be. Use the SMART framework to define clear, precise KPIs for each goal:

• Specific. Define exactly what you’re measuring.
• Measurable. Make sure you can quantify progress numerically.
• Achievable. Set targets that stretch performance while remaining within reach. 
• Relevant. Connect each KPI to business objectives that matter now.
• Time-bound. Set a reasonable deadline or measurement period.

KPI examples (by department and role)

Every department across your company shares common goals, such as revenue growth and customer satisfaction. However, the specific metrics that matter most vary by role and responsibility. Use these examples as a starting point to determine the best KPIs for each team. 

KPIs for sales

• Pipeline value: Total dollar value of opportunities 
• Average deal size: Mean revenue per closed deal over a specific period 
• Sales cycle length: Average number of days from first contact to deal close
• Quota attainment percentage: Percentage of sales target achieved by an individual or team
• Customer acquisition cost: Average sales and marketing spend per new customer 
• Customer lifetime value: Total revenue earned from a single customer over the entire business relationship

KPIs for marketing

• Marketing-qualified leads: Number of prospects ready for sales outreach and engagement
• Lead-to-customer conversion rate: Number of leads that ultimately become paying customers
• Customer acquisition cost by channel: Total spend per new customer acquired through specific marketing channels
• Marketing-influenced revenue: Total revenue from deals where marketing played a documented role
• Website conversion rate: Percentage of site visitors who complete a desired action 
• Content engagement: Time spent engaging with your content 

KPIs for product

• Product adoption rate: The number of customers who regularly use your product’s key features
• Net Promoter Score: Percentage of customers willing to promote your product or service
• Customer churn rate: Percentage of customers who stop using your service or buying your product
• Feature usage: Frequency and depth of engagement with specific product capabilities
• Product-qualified leads: Prospects who indicate a willingness to purchase or upgrade after a trial period

KPIs for customer success

• Customer retention: Percentage of customers who renew subscriptions or continue using services
• Net revenue retention: Revenue retained from existing customers, including revenue from new customers, minus churn
• Customer satisfaction score: Rating of how happy customers are with a product or service
• Expansion revenue: Additional revenue earned from existing accounts through upsells or cross-sells
• Support ticket resolution time: Average time from ticket creation to complete customer resolution

KPIs for HR

• Time to hire: Time required to complete the recruiting and hiring process for a new employee
• Cost per hire: Total cost of bringing on a new employee
• Employee retention and turnover rates: The percentage of employees who remain with or leave the company over a specific time period
• Employee engagement scores: A measure of employee satisfaction and commitment to the company
• Time to productivity for new hires: Time needed for a new employee to reach full productivity

KPIs for managers

• Team goal achievement: Percentage of team goals completed during a period
• Shared goal completion: Completion rates for cross-functional team collaboration goals
• One-on-one meeting completion rates: Percentage of meetings completed with individual contributors
• Project completion rate: Number of deadlines met and projects completed on time
• Cost variance efficiency: Number of projects completed within or under budget

KPIs for employees

• Task completion rate: Percentage of assigned tasks completed on schedule 
• Project milestone achievement: Number of milestones completed toward team projects and targets
• Error rate: Number of errors relative to total tasks
• Professional development progress: Number of training hours, certifications, or capability-building activities completed

KPI reporting: How to track and share KPIs

Defining KPIs is only half the battle. Once you know what to track, build KPIs into your knowledge management system and follow consistent reporting cadences. Monitor both short- and long-term reports to see what is working and where you need to make adjustments.

• Weekly KPI reports. Operational metrics like pipeline reviews and productivity rates change quickly, so it’s best to review them every week.
• Monthly dashboards. Monthly dashboards provide a central command center where, at a glance, you can compare month-over-month performance across your most important metrics.
• Quarterly performance reviews. Every quarter, conduct a comprehensive review of key business performance metrics to monitor trends, identify missed opportunities, and make strategic adjustments.

Share KPI reports, tailored to each role, with stakeholders, managers, and teams. For example, a sales manager might use KPIs such as lead generation, average time to close, and win/loss rate to set up sales automation processes.

KPI monitoring: keeping KPIs up to date

You can’t plan next month’s growth targets using data from three months ago. That’s why ongoing monitoring and good data hygiene are critical. Rather than taking a single point-in-time snapshot, KPI monitoring tracks data over time. Data hygiene ensures that your data is accurate, consistent, and error-free.

Here’s how to get the most from your data:

• Automate data collection and reporting to reduce errors and maintain accuracy.
• Conduct regular internal audits to catch inconsistencies and ensure compliance.
• Use data dashboards to keep KPIs visible and accessible to everyone who needs them. 
• Document processes so everyone knows what to track and why.
• Set threshold alerts in your system to notify you when targets are hit or when values drop below expected minimums.
• Use a quarterly planning template and review process to adjust KPI targets as needed.
• Use AI monitoring to track critical KPIs in the flow of work so you can respond quickly to changes.

What is a KPI dashboard? 

A KPI dashboard consolidates your critical metrics in one central location, making them easy to access and monitor. Stakeholders can create custom dashboards based on the metrics that matter most to them. For example, your sales team might create a sales dashboard to track sales activity, closed deals, and leads generated, while C-suite executives might focus on high-level business metrics. 

Most dashboards include current-value displays (showing today’s numbers), progress toward targets (gauges or progress bars), trend visualizations (line charts showing movement over time), and comparison views (actual vs. target, current period vs. last period).

Best KPI dashboard tools and software

The right dashboard can make tracking KPIs effortless. The dashboard you choose should help you achieve your goals, given your budget, data complexity, and company size. Here are some of the most common types of dashboard tools teams use to visualize performance:

• Business intelligence platforms. Software like Tableau and Looker can connect to almost any data source, helping you visualize complex data and create custom dashboards that integrate with the tools you already use.
• KPI analytics tools. Some tools focus specifically on KPI monitoring. For example, Databox and Geckoboard offer pre-built templates, mobile-friendly views, and simplified setup for common business metrics.
• Project management platforms. These offer a wealth of productivity KPIs. For example, Asana lets you create a KPI dashboard that integrates with Slack, delivering insights directly in project channels.
• CRM platforms. Integrations with CRM platforms like Salesforce pull customer data directly into your team’s workflow, eliminating the need to jump between tools.

When choosing KPI dashboard tools, consider your data sources, team size, technical capabilities, budget, and whether you need mobile access. 

How Slack supports KPI tracking and visibility

Many KPI tools integrate directly with Slack, creating a home for automated KPI reporting. By pulling key data into Slack workflows, you can keep your most important metrics visible to every team member, giving you easy access to critical data. 

• Dedicated KPI channels. Create team-specific channels where automated KPI reports are posted daily or weekly. Teams can monitor productivity metrics directly in the channel without logging in to a separate dashboard.
• KPI submission workflows. Use Workflow Builder to schedule weekly updates and reviews, with each team member reporting numbers in a threaded conversation. Team members can submit their metrics via a form, and the submissions will be routed to channels for transparency. You can also use Slackbot to remind team members to submit KPI updates on schedule.
• Slack integrations. Integrate Slack with your dashboard tools and share dashboards directly in channels or messages. You can schedule dashboards to update daily, weekly, or monthly to keep everyone on track.
• KPI alerts. Set custom alerts to get real-time performance notifications for critical KPIs. You can also add keywords to make sure you’re notified about all metrics relevant to a specific role or project.

KPI dashboards for departments

When KPI dashboards live in Slack, they become part of your team’s daily conversation. Departments can tailor these dashboards to their teams’ specific needs and goals to make better decisions and fine-tune processes. For example:

• Sales KPI dashboards display pipelines by stage, win rates by rep, quota attainment, average deal size, and daily sales quotas. Use a sales tracking template to help reps easily input activities and document next steps.
• Operations KPI dashboards track productivity and process efficiency (for example, cycle times, throughput, error rates), resource utilization, cost per unit, and on-time delivery. Include both high-level trends and granular operational details.
• HR KPI dashboards monitor hiring pipelines, time-to-fill, employee retention trends, and engagement scores by department. Balance quantitative metrics with qualitative employee feedback.
• Customer success KPI dashboards feature customer satisfaction scores, retention rates, NPS trends, support ticket volumes, and resolution times. Segment views by customer tier, cohort, or account manager.
• Marketing KPI dashboards track lead generation by channel, conversion funnel performance, campaign ROI, and website traffic. Use marketing tools to tailor campaigns and respond to market trends based on data.

Focus on the right data with KPI tools and tracking

Successful teams use KPIs strategically to focus on activities that drive results, but it’s not enough to “set it and forget it.” KPI monitoring requires regular reviews to ensure you’re tracking the metrics that matter most. Dashboard tools turn KPIs from static reports into living conversations, and Slack keeps that information front and center for everyone on your team. 

Ready to kick-start your KPI strategy? Build KPI tracking into your team’s daily workflows in Slack to keep everyone working toward the same goals.

Defining KPIs FAQs