Is that really a KPI?

kpi-blackboard

Loads of managers, including many in marketing, love Key Performance Indicators (KPIs). You may well be one of them. Nothing wrong with that. I’ve seen them defined as “quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization.” All good so far then, but too often I see items in a list of KPIs which are just measurements of an activity, not critical success factors.

For example, “Visitors to a website” isn’t a KPI, unless you’ve specifically been asked to get more visitors to a website. Even then, it’s just a measurement of how well you’ve performed that task, not a KPI for the success of the organisation. One client told me that her company had agreed on reducing “home page bounce rate” as a KPI measuring the improving quality of incoming traffic to the web site. But would you rather have 10 visitors, with 6 not bouncing – a 40% bounce rate – or 100 visitors, with 40 (woo hoo!) not bouncing – an apparently poorer 60% bounce rate?

The answer of course is: “I’ve no idea, because it depends on the cost of those extra visitors. And anyway, is this measurement actually telling us anything useful?”

If you’ve been stuck with producing a load of so-called KPIs which are really just poorly-selected measurements, it may be worth going back to those management textbooks and proposing some more credible alternatives.

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