How to Choose the Right KPIs for Your Business

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Key Performance Indicators (KPIs) are vital metrics when it comes to measuring progress in any business. As much as they are not sales targets, per se, KPIs play a significant role in aligning all employees towards the most important metrics that drive the real growth of any company. They are assessable quantities or data points you can use to measure your company’s performance against its goals.

Most companies keep grappling with the same questions about KPIs all the time. One of the most recurrent questions is, how do I choose the right sales KPIs for my business? This article gives helpful tips for choosing the most appropriate KPIs for your company or business.

Go for KPIs That Directly Resonate with Your Business Objectives 

Are your KPIs directly related to your company objectives? For example, a KPI could be related to your company’s objective of enhancing your marketing strategy’s return on investment (ROI), improving your customer service, or growing your sales. To choose KPIs that are related to your business, you should ask yourself pertinent questions, including:

  • What are my company goals?
  • What are the major areas marked for improvement or optimization?
  • What are the priorities set out by the company management team?

If you get genuine answers to these questions, you will be several steps closer to pointing out the most appropriate KPIs for your business.

Take your company’s stage of growth into consideration.

Is your company a start-up or an already established enterprise? Certain KPIs will be more vital than others, depending on your company’s growth stage. Companies at their formative stages normally concentrate more on data related to business model endorsement. On the other hand, established businesses focus on issues like customer lifetime value and cost per acquisition.

Identify which performance indicators are leading and which ones are lagging. 

To discover which indicators are leading and which are lagging, you have to assess how you were doing versus how you are currently doing. None of the two types of indicators is necessarily better than the other. You only need to note the difference between the lagging and leading indicators.

Leading indicators gauge your probability of accomplishing a goal in future. They serve as forecasters of what lies ahead. Sales opportunity age, conversion rates, and sales rep activity are good examples of leading indicators.

On the other hand, lagging indicators quantify the output of something that has already taken place. The number of new clients, total sales in the past month or the duration of professional service offered are a few examples of lagging indicators. Such metrics are only fit for gauging results since they focus on productivity.

Customarily, most businesses majorly concentrate on lagging indicators, which is not helpful. A major reason is that such indicators are easy to quantify since the events have already occurred. For instance, you can easily compile a report of the number of new customers in the last quarter.

Concentrate On a Few Major Metrics, As Opposed to A Heap of Data 

Once you start identifying the right KPIs for your business, the fewer they are, the better for you. Tracking too many KPIs might overwhelm you with data, making you lose focus. Due to the different business models and objectives adopted by various companies, there is no standard number of KPIs needed to drive growth in a company. However, experts advise that having two to four KPIs per objective is good enough to give you some sense of where your company stands.


Leading indicators are considered business drivers since they come before new trends develop. Hence, they can assist you in determining whether you are on the right track towards achieving your objectives or not. Identifying the lead indicators impacting your company’s future performance will put you on the right trajectory towards success.

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