KPIs vs Metrics: Everything you need to know

According to a recent study by Gartner, 83% of business strategies fail due to faulty assumptions and unclear objectives. In response, organizations are increasingly turning to modern business intelligence (BI) tools and methods like KPIs and metrics to efficiently track performance indicators.

Amid the wealth of available data, a different challenge appears. How can businesses distinguish key performance indicators (KPIs) from metrics? And perhaps even more importantly, how can businesses prioritize which metrics and KPIs to track—and why? That’s what we’ll unpack in this comprehensive guide.

What is a KPI?

A key performance indicator, commonly known as a KPI, is a measurable value that demonstrates how effectively a company is achieving its key business objectives, processes, or activities. They offer a clear, quantifiable performance measurement against strategic goals.

These actionable insights help businesses monitor performance, identify areas for improvement, and drive strategic decision-making. By closely tracking and analyzing KPIs, you can optimize operations and ultimately achieve long-term success.

What are metrics?

Metrics are quantifiable measurements used to track and assess various aspects of business performance, operations, and activities. Unlike KPIs, which are specifically tied to strategic objectives and goals, metrics provide more general insights into performance without necessarily indicating success or failure in achieving overarching objectives. Metrics can encompass a wide range of data points, including financial, operational, customer-related, and employee-related metrics.

The primary purpose of metrics is to provide businesses with a benchmark to monitor performance, identify trends, and make informed decisions. By tracking and analyzing metrics over time, organizations can gain insights into their operations, identify areas for improvement, and measure progress toward broader goals.

KPIs vs Metrics: What is the difference?

Strategic significance

While both metrics vs KPIs are essential for performance evaluation, KPIs are generally considered more strategically significant. They represent the ultimate goals of your business and serve as guiding benchmarks for organizational success. Metrics, on the other hand, provide detailed data points that contribute to the broader understanding of performance within the context set by KPIs. 

Let’s take a real-world example. Northmill faced limitations in leveraging its valuable new customer data due to technical bottlenecks with its legacy BI tool. That’s when Northmill found ThoughtSpot’s self-service analytics. By analyzing user data and identifying metrics to monitor and improve the onboarding process, Northmill boosted customer conversion rates by 30%, thereby achieving its strategic KPI.

“Our previous BI tool was too slow to surface reliable KPI data and we really lost too much momentum. With ThoughtSpot, you can iterate much more quickly, and really give people solutions they get value from.”

Mateusz Wyciślik Former Data Engineer Northmill Bank

Objective and data points

KPIs are specific business objectives or goals that a department or team aims to achieve. They serve as focused targets directly aligned with the organization's strategic vision. In the case of Northmill Bank, the KPI was conversion. Over a set amount of time, they received a 30% increase by implementing strategies and closely monitoring this essential KPI.

Metrics include individual data points or measurements. They provide insights into various aspects of performance, such as website traffic, conversion rates, customer acquisition costs, etc. Each metric offers valuable information that collectively aids in assessing progress toward achieving KPIs.


KPIs are associated with essential objectives and are evaluated over predetermined time periods. They often have defined deadlines or timeframes—for example, quarterly or annually—reflecting long-term goals or strategic initiatives.

Metrics may not necessarily be bound to specific goals or time frames. Instead, they are continuously tracked as part of day-to-day operations. You’ll use them to monitor performance trends, identify improvement opportunities, or evaluate the impact of particular actions or campaigns.

Depth of focus

KPIs offer a focused perspective on your end goals and outcomes. They represent critical aspects of performance directly contributing to organizational success. Typically monitored at the executive level, KPIs guide strategic decision-making.

Metrics provide a broader view of performance, concentrating on specific processes, activities, or departmental functions. While they offer detailed insights into operational aspects, they won’t always align directly with overarching strategic objectives.

Relationship between KPIs and metrics

While every KPI is technically a metric, not every metric serves as a KPI. 

Imagine your business goals are what you're aiming for, like Northmill's goal of boosting customer conversion rates. KPIs are the checkpoints along the way to measure progress. Metrics are the micro data points used to track incremental progress and find areas for improvement.

Best practices for measuring KPIs and metrics

  • Align with objectives: Ensure that your goals and objectives are at the forefront of your organization's focus. They should reflect what success looks like for your business.

  • Keep it simple: Avoid measuring too many KPIs and metrics. Focus on a few key indicators that truly matter for your business. This ensures clarity and prevents information overload.

  • Define clear definitions and targets: Clearly define what each number represents, and set specific, measurable targets. This provides a clear benchmark for performance evaluation.

  • Use SMART criteria: Ensure that your KPIs and metrics are specific, measurable, achievable, relevant, and time-bound (SMART). This helps in setting meaningful goals and tracking progress effectively.

  • Choose quality data sources: Use reliable and accurate data sources for measuring. Invest in data collection methods and systems that provide trustworthy information.

  • Regular monitoring and review: Continuously assess your progress towards your objectives. Regularly assess performance against targets and adjust strategies accordingly.

  • Contextualize data: Understand the context behind your goals. Analyze trends, patterns, and outliers to gain deeper insights into performance drivers.

  • Implement feedback loops: Foster a culture of learning and improvement by incorporating feedback into your processes. This facilitates continuous improvement and agility.

  • Adapt and evolve: Remain flexible and open to change as your business landscape shifts. Regularly reevaluate your strategies to ensure they remain relevant.

  • Communicate results: Share KPI and metric results transparently across the organization. Effective communication fosters accountability, alignment, and a culture of data-driven decision-making.

  • Invest in the right analytics tools: Leverage advanced tools to streamline data analysis and data visualization. These resources can uncover valuable insights to inform your decision-making process.

Examples of KPIs and metrics by department

Each department within an organization plays a specialized role vital for achieving the company's overarching goals. These roles are assessed through strategic KPIs and metrics designed to monitor progress and drive performance enhancements.

Whether it's the sales team focused on driving revenue growth or the customer success department working to ensure positive user experiences and success with the product, KPI dashboards serve as essential navigational tools. They offer clear direction, enabling teams to track progress and navigate towards achieving their objectives.

1. Sales

  • Sales revenue: Total revenue generated from sales within a specified period

  • Sales growth rate: Percentage increase or decrease in sales over a defined period

  • Customer acquisition cost (CAC): Cost associated with acquiring a new customer

  • Conversion rate: Percentage of leads that result in successful sales

  • Average deal size: Average value of each sale made by the sales team

🔍Top 16 sales metrics and KPIs to track in 2024

2. Marketing

  • Return on investment (ROI): Measure of the profitability of marketing campaigns relative to their cost

  • Lead generation rate: Number of leads generated through marketing efforts

  • Website traffic: Total number of visitors to the company website

  • Conversion rate: Percentage of website visitors who take a desired action, such as making a purchase or filling out a form

  • Cost per lead (CPL): Cost associated with acquiring a single lead

🔍15 Marketing KPIs and metrics to track in your dashboard

3. Finance

  • Profit margin: Percentage of revenue that exceeds the cost of goods sold

  • Cash flow: Movement of money in and out of the business

  • Operating expenses: Total expenses incurred in running the business

  • Accounts receivable turnover: Measure of how efficiently a company collects payments from customers

  • Debt-to-equity ratio: Ratio of total debt to total equity, indicating the company's financial leverage

🔍21 financial KPIs and metrics you should track in 2024

4. HR

  • Employee turnover rate: Percentage of employees who leave the company within a given period

  • Employee satisfaction: Measure of employee happiness and engagement

  • Time to hire: Average time it takes to fill a vacant position

  • Training and development costs: Total expenses incurred on employee training and development programs

  • Absenteeism rate: Percentage of employees who are absent from work

🔍12 HR metrics examples and KPIs you should track

5. Operations

  • Inventory turnover: Measure of how quickly inventory is sold or used in a given period

  • Production efficiency: Measure of how efficiently resources are used in the production process

  • On-time delivery: Percentage of orders delivered on time

  • Quality metrics: Measures of product or service quality, such as defect rates or customer complaints

  • Cost per unit: Average cost of producing one unit of a product

Empowering decisions with advanced analytics

Accessing real-time insights is paramount for making informed decisions across various business functions. Key performance indicators and metrics play a crucial role in this process, offering valuable data points for evaluating performance and progress toward strategic objectives.

With ThoughtSpot's AI-Powered Analytics, you can unlock the power of your data for all business users through search-driven analytics and interactive dashboards that highlight relevant KPIs and metrics. See how it works—schedule a ThoughtSpot demo.