what is key metrics

Key metrics, also known as key performance indicators (KPIs), are statistics used to measure an organization or departments overall health and performance. They are the most important metrics that a business tracks and are used to track progress towards both short and long-term goals. Key metrics are not necessarily standalone units of measurement; they can be derived by combining multiple metrics. Key metrics are usually tied to specific targeted objectives and are measured against predetermined goals. Every kind of organization has specific key metrics that it uses to track performance. Examples of key metrics include sales revenue, net profit margin, gross margin, sales growth year-to-date, cost of customer acquisition, customer loyalty and retention, and qualified leads per month. Key metrics help organizations make better decisions based on facts and data and steer their operations in the right direction. Failing to measure these key metrics can lead to bad decisions and ultimately failures.