The Real Difference Between Metrics and KPIs

Every marketer knows that metrics and KPIs are important. The problem is that many, if not most marketers don’t really know why they are important or what the difference is between the two.

Unfortunately, looking online for definitions really is not helpful, as there are literally hundreds, if not thousands of articles about metrics and KPIs. No two articles even seem to agree on how to define them, so how do you know what to believe?

This article will cut through the clutter and provide clear and simple definitions and explanations that help you understand what metrics and KPIs are, as well as the differences between them.

THE SIMPLEST DEFINITION

The easiest way to understand the difference between metrics and KPIs is to first define them both as a quantifiable measurement of a strategic or tactical activity. As such, at the highest level, KPIs are strategic and metrics are tactical. Once you understand that, then they become quite easy to understand.

KPIs are a quantifiable or measurable value that reflects a business goal or objective (strategic) and how successful the business is in accomplishing that goal or objective. A metric is also a quantifiable or measurable value, but it reflects how successful the activities taking place are (tactical) to support the accomplishment of the KPI.

WHAT IS A METRIC?

In its simplest form, a metric is nothing more than a measurement you record to track some aspect of your business activity and measure the success or failure of the performance of that activity. Metrics are quantifiable, they allow you to specifically state your results and show how well the actual activities are performing with respect to a set target. 

Examples of metrics can range from something as simple as the number of times a piece of collateral was downloaded to something as complex as the percentage of net new names added to a contact database that were converted into new SQLs.

WHAT IS A KPI?

A KPI, or Key Performance Indicator, is also a measurement. Like metrics, KPIs must be very well defined and are also quantifiable. The difference is that these types of measurements relate to a specific strategic business goal and reflect how successful the business is in achieving that goal. To further clarify, KPIs define a set of values against which the metrics are measured.

Examples of KPIs may include the targeted percentage increase in market share or the targeted increase in revenue over a specific period of time.

HOW DO METRICS RELATE TO KPIs?

How they relate to each other is extremely simple: metrics support KPIs. KPIs in turn support the overall business strategic goals and objectives. That’s it.

SUMMARY

Understanding the differences between KPIs and metrics is simple once you remember to view them as quantifiable measurements that track performance to strategic vs. tactical goals and objectives.

© 2016 – Richard Hatheway, Catalyst Strategic Marketing

All rights reserved.