Business Metrics vs KPIs: What’s the Difference?

5 min readDec 25, 2020


Photo by Austin Distel

Are you confused by business jargon? There are so many acronyms and terms that exist and not to mention phrases that are specific to certain industries or corporations. It’s easy to get baffled by all of the different terminologies.

Two of the most complicated terms are business metrics and KPIs. When you first hear them mentioned in a board room, you might believe they mean the same thing. However, for most companies, they have very different definitions.

There a couple of ways you can get through these meetings without looking silly or, worse, fired. You can nod your head and smile to make everyone in the room believe you completely understand. Another option is to keep reading and find out what both phrases actually mean.

What Are Metrics in Business?

The most common business metrics definition is a quantifiable measure that tracks progress and determines success. They might get used to help better understand performance in certain areas that are essential for the survival of the company.

It’s also important to know that a metric is not a measure. Business performance metrics can get made up of multiple indicators to better define what success looks like.

The audience for business metrics is not only the employees in the organization. They’re generally specifically designed for investors, customers, and other people around the company who have a specific interest in how well it’s performing. These individuals can then hold the executives to account using these measurements.

What Are Some Examples of Business Metrics?

Key business metrics can differ according to the industry and what’s important to the company. However, there are some that are common regardless of the field. Some examples of business metrics include:

  • Revenue
  • Gross margin
  • Net profit margin
  • Total customers
  • Number of employees
  • Net promoter score or customer satisfaction
  • Monthly recurring revenue
  • Employee Engagement

Other examples may refer specifically to the type of business you work in. For example, an online store may include metrics around traffic and unique visitors as this helps define success for them.

What Are KPIs?

A key performance indicator or KPI is a value that’s utilized to help track progress against defined goals. These can get tracked against individual employees, teams within the organization, or the company itself.

They can help provide direction towards the success that the organization wishes to achieve. But the key to a good KPI is that it must be measurable, relevant to the company, and provide a clear link to the business metrics.

What Are Some Examples of KPIs?

KPIs are generally specific to an individual or a team who are working towards the same outcome. As such, the list of KPI examples is a lot longer and can include some unique measurements that are specific to the company you work for. Some common types of KPIs can consist of:

  • Planned hours of work
  • Missed milestones
  • Percentage of projects completed before the deadline
  • Cost of managing processes
  • Return on investment
  • Percentage of canceled initiatives
  • Schedule variance
  • Sales conversion
  • Retention rate
  • Attrition rate
  • Cost to acquire a new customer
  • Cost to retain a customer

There are hundreds and potentially thousands of KPI examples. They should help provide you with an idea of where to focus your efforts and what’s important to the company that you work for.

Which One Is Better?

Both KPIs and business metrics are important for a company and play very different roles in the organization. It’s not a case of choosing one over the other. You need both of them to help drive towards the success the bosses want to see.

Your key performance indicators should provide you with guidance on how to achieve a business metric. For example, if one of the business metrics related to a total number of sales in the calendar year, then one of your KPIs might refer to the conversion of new customers to help achieve the figure required.

Without the relevant business metric, you wouldn’t know what KPIs to set to reach the success the company needs to keep its doors open. Both metrics and key performance indicators should get reviewed regularly to ensure the organization is on the right track. They should also be a challenge to achieve so that you don’t meet all of the business metrics and KPIs one month into the new year.

What’s the Best Way to Track Business Metrics and KPIs?

There are several ways to keep an eye on how you’re progressing with your measures, such as building reports or dashboards. You can even use Microsoft Excel to keep tabs on key performance indicators and business metrics.

But thankfully, there are better ways as many business intelligence platforms can help integrate all of your metrics into one place that’s easy to read. For example, if you use time tracking software, then you can program it to follow specific measures that are relevant to your business.

Many of them will also allow you to finetune it over time if you find the goals you’ve set are too easy. It’s a lot simpler than putting in a series of Excel formulas and collating information from multiple different platforms.

How to Keep Track of Business Metrics and KPIs

The best business metrics and KPIs are the ones that are measurable and can get easily tracked using dashboards or platforms to measure success. You need both figures to help track how the company is progressing and ensuring that it’s heading in the right direction.

Online timesheet interface in actiTIME where every user can select task parameters
they want to see in their timesheets

Tracking your targets should be the easy part of the whole process, especially if you’re using our platform. Our software not only helps you analyze business performance, but it can also help you manage projects, assigns tasks, and track employee time. If you want full visibility of your business metrics, start using our program today.




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