[et_pb_section fb_built=”1″ custom_padding_last_edited=”off|desktop” _builder_version=”4.27.2″ custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” custom_padding_phone=”0px||||false|false” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.27.2″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f3f2f6″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” pac_dcm_carousel_specific_module_num=”0″ border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” pac_dcm_carousel_specific_module_num=”0″ global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Intro” _builder_version=”4.27.4″ header_2_font_size=”32px” custom_padding=”0px||0px||false|false” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n
If you\u2019ve ever worked in a business, you\u2019ve probably come across key performance indicators. There\u2019s a reason why the \u2018KPI\u2019 is still seen as one of the most important metrics used in running an organisation and managing staff<\/a>.<\/p>\n From startup founders to seasoned business moguls, using KPIs will help translate your business strategy into measurable outcomes, as they show how well a company or individual is working towards their strategic goals. It also gives you a good glimpse into your performance at any given point in time.<\/p>\n KPIs can be used to monitor revenue growth and customer satisfaction levels, track employee engagement and day-to-day operations, as well as so much more. So let\u2019s go over the KPI meaning and provide examples for how to develop good KPIs that are truly measurable (and attainable) for your business.<\/p>\n At its most basic, a KPI is a quantifiable measurement that evaluates how well an individual, team, or company is achieving their business objectives. They let businesses stay on top of progress and adjust strategies in line with their overarching organisational goals.<\/p>\n But don\u2019t fall into the trap of thinking that key performance indicators are the same as goals. Instead, KPIs measure progress towards achieving those goals. Let\u2019s say a business sets a strategic goal to improve its customer service levels. A relevant KPI could be the average response time to customer queries or a customer retention score.<\/p>\n KPIs serve multiple purposes in a business. In terms of strategic objectives, they give you more clarity and direction by translating them into measurable outputs. Measuring performance over time means KPIs help you identify whether you\u2019re on track to meet your business goals or need to pivot instead.<\/p>\n They can also help to improve communication across teams, as clearly defined KPIs help employees understand how their efforts are contributing to the \u2018bigger picture\u2019. In many organisations, KPIs are used to allocate future resources and reward good performance.<\/p>\n Leading KPIs are predictive. They highlight activities or behaviours that suggest future performance. For example, the number of website leads generated in one month could indicate next month\u2019s potential sales. Leading indicators are incredibly useful for spotting trends early and making proactive decisions based on that data.<\/p>\n Lagging KPIs, on the other hand, tell you what\u2019s already happened. As retrospective measures, they assess performance after a set period, such as monthly revenue, net profit margin, customer churn, etc. While lagging KPIs can\u2019t change outcomes, they can still provide you with important insights into past performance and long-term trends.<\/p>\n Smart businesses use a combination of both leading and lagging indicators to get a complete view of their performance.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/www.reckon.com\/au\/wp-content\/uploads\/2025\/06\/Different-KPIs.png” alt=”Different KPIs types” title_text=”Different KPIs” align=”center” admin_label=”Image” _builder_version=”4.27.4″ _module_preset=”default” custom_padding=”||20px||false|false” global_colors_info=”{}”][\/et_pb_image][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n Financial KPIs are the backbone of business reporting. Metrics include things like gross profit margin, return on investment, and operating expenses<\/a>, and they give you good insights into the financial health of your business. They can also help with decision-making around cash flow and pricing.<\/p>\n These are all about customer behaviours and satisfaction. Some of the more common types of customer KPIs include Net Promoter Score, customer retention rates, customer acquisition cost, and more. Tracking how well you serve and retain customers gives you clues about the effectiveness of your marketing and customer service strategies.<\/p>\n Sales and marketing KPIs are more interested in lead generation, conversion rates, cost per lead, and campaign engagement. All of these are vital for businesses that want to grow<\/a> and expand their market share. They\u2019ll help you refine your sales strategies and improve return-on-marketing spend.<\/p>\n Your operational KPIs will let you dig a lot deeper into your internal processes. For example, things like average delivery time, how quickly customer complaints are resolved, and the number of production defects can all be tracked to help boost workplace efficiency and determine how your resources are used.<\/p>\n Functional KPIs relate to specific departments (e.g, HR tracking employee turnover or IT tracking website downtime) and are really useful for understanding how well the different parts of your organisation are contributing to strategic goals.<\/p>\n Putting together the most relevant KPIs for your business starts with a good understanding of your business strategy. Once your objectives have been established, you can begin identifying which specific metrics will help you track progress:<\/p>\n From financial KPIs that show your true bottom line to customer service KPIs that help shape brand loyalty, meaningful KPIs will keep your business strategy on track and your team continuously focused. No matter your business size or the industry in which you operate, creating and tracking the right KPIs is one of the smartest investments you can make.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Related terms” _builder_version=”4.27.4″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” locked=”off” global_colors_info=”{}”]<\/p>\n See related terms<\/strong> <\/p>\n [\/et_pb_text][ba_social_share icon_bg=”#03002e” icon_padding=”10px|12px|10px|12px|true|true” layout=”classic” show_text=”off” btn_padding=”0px|0px|0px|0px|false|false” btn_bg_color=”RGBA(255,255,255,0)” _builder_version=”4.23″ _module_preset=”default” custom_margin=”50px||||false|false” custom_padding=”25px||||false|false” custom_css_before=” content: %22SHARE THIS%22;|| font-size: 16px;|| font-weight: 700;|| line-height: 22px;|| letter-spacing: 0em;|| text-align: center;|| color: #ff5447;|| margin-bottom: 10px;|| display: inline-flex;|| position: absolute;|| margin-top: 10px;” border_width_top_main=”1px” border_color_top_main=”#e4e4e4″ border_radii_icon=”on|5px|5px|5px|5px” global_colors_info=”{}” custom_css_before_last_edited=”off|desktop”][ba_social_share_child _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”facebook” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”linkedin” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”email” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][\/ba_social_share][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" If you\u2019ve ever worked in a business, you\u2019ve probably come across key performance indicators. There\u2019s a reason why the \u2018KPI\u2019 is still seen as one of the most important metrics used in running an organisation and managing staff. From startup founders to seasoned business moguls, using KPIs will help translate your business strategy into measurable […]<\/p>\n","protected":false},"author":35,"featured_media":0,"menu_order":0,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"class_list":["post-293913","glo","type-glo","status-publish","format-standard","hentry"],"yoast_head":"\nKPI definition<\/h2>\n
Why are KPIs important?<\/h2>\n
Leading and lagging indicators<\/h2>\n
<\/h2>\n
5 types of KPIs and how they work<\/h2>\n
1. Financial KPIs<\/h3>\n
2. Customer KPIs<\/h3>\n
3. Sales and marketing KPIs<\/h3>\n
4. Operational KPIs<\/h3>\n
5. Functional KPIs<\/h3>\n
How to develop solid KPIs<\/h2>\n
\n
What are expenses?<\/a>
What is gross pay<\/a>
What is net income?<\/a><\/p>\n