KPIs vs Metrics: What's the Best Way to Monitor Performance?

Thriving in business requires more than just data collection, it also needs to identify the figures that impact growth. Let’s take a quick example from Amazon sellers analyzing data. They might track conversion rate as a Key Performance Indicator (KPI) to measure how effectively potential customers turn into buyers. Meanwhile, the click-through rate serves as a supporting metric, showing how many people click on a product listing after seeing it in search results.

Tracking general business figures without focusing on the right performance indicators can lead to missed opportunities. A business may see steady website traffic but struggle with low customer retention or declining sales. That’s where understanding KPIs vs Metrics makes a difference.

Every business needs a proper system to monitor performance, but not all numbers are equally important. Knowing how to use both helps businesses choose which one is more suitable. But, how do you determine what to track?

What Are KPI Metrics?

KPIs are measurable values used to assess progress toward business goals. These indicators focus on important objectives and serve as benchmarks for long-term success.

A good KPI acts as a guide, helping you and your team determine if your decisions align with objective metrics and keep the business moving in the right direction.

Effective KPIs generally share these features:

Provide measurable proof of progress toward long-term goals.
Track key business objectives to support decision-making.
Offer comparisons to measure changes in performance over time.
Balance leading and lagging indicators.

KPIs also help organizations evaluate their strategic, financial, and operational performance compared to competitors. From HR and management to marketing and sales, KPIs support different business functions at a strategic level.

While KPIs depend on a company’s specific goals, some remain commonly used for measuring business performance.

KPI Examples to Track

Revenue KPIs: Measure total earnings over a period.
Sales KPIs: Track increases or decreases in sales.
Strategic KPIs: Assess the effectiveness of business strategies.
Profit Margin: Show how much profit remains after expenses.
Customer Service KPIs: Evaluate service quality and identify issues.

Other common KPIs include conversion rates, monthly sales growth, net cash flow, and customer acquisition costs.

To identify the most useful KPIs for your business, consider these questions:

What is your main business objective?
Why is this objective important?
What steps will you take to reach this goal?
How will you measure progress?
How often will you review performance?

For example, if your goal is to increase revenue by 20% by year-end, relevant KPIs may include monthly sales growth, upselling success rate, customer acquisition cost, customer retention rate, and churn rate.

This means a KPI may include multiple business metrics. Now, let’s look at what metrics are and how they relate to KPIs.

What Are Metrics?

Metrics are also measurable values, but unlike KPIs, they focus on specific business processes at the operational level. Some metrics align with business objectives, but they are not always the best indicators of overall performance.

For example, tracking website visitors is a useful metric, but it does not directly determine business success. These types of data points are often called "vanity metrics" because they provide insights but do not necessarily drive growth.

However, metrics still play an important role in decision-making and performance tracking. Businesses collect and analyze a variety of metrics as part of daily operations, and these figures often help define long-term KPIs.

Metrics help businesses in several ways:

Offer detailed insights into how campaigns, strategies, and activities perform.
Allow businesses to compare performance with competitors.
Help identify the most important KPIs and how different metrics connect.

For example, email deliverability may not be a KPI, but the number of emails that lead to customer conversions is. Monitoring the email deliverability rate helps improve the KPI of email conversion.

Now, let’s find out the differences between KPIs and metrics.

KPIs vs Metrics: What are the Main Differences?

Here are the main differences between KPIs and metrics. KPIs track progress toward specific goals, while metrics measure general performance.

Goals and Data Points

KPIs track progress toward a defined business goal, while metrics serve as individual data points that help measure performance.

For example, if your goal (KPI) is to get 500 webinar registrations in a week, the related metrics include:

Number of sign-ups
Website visits
Clicks on advertisements (if using paid ads)
Conversion rate on the webinar landing page

The KPI represents the overall goal, while metrics provide supporting data.

Timeframe

KPIs measure progress over a set period and align with important business objectives.
Metrics are tracked continuously without necessarily being tied to a deadline.

For instance, if your business aims to increase customer count by 50 in 90 days, that’s a KPI because it’s tied to a specific objective and timeframe.

On the other hand, tracking social media likes, website visits, or the number of email subscribers are metrics—they provide useful data but don’t necessarily have a set target or timeline.

Level of Focus

KPIs are high-level indicators that measure overall business results, helping organizations track progress toward strategic goals. Metrics, on the other hand, focus on detailed processes and specific performance areas, providing insights into various aspects of business operations.

KPIs give a broader perspective, showing whether the business is achieving its main objectives. Metrics focus on individual areas of performance, like sales team efficiency, website traffic, or ad engagement.

For example:

A KPI for a sales team might be achieving $100,000 in monthly revenue.
The metrics that contribute to this could be a number of sales calls made, lead response time, and average deal size.

Both are important, but KPIs define business success, while metrics provide insights into specific areas.

Importance in Strategy

KPIs are important for business strategy and decision-making because they define clear goals for success. Metrics, while providing valuable data for analysis, do not always indicate overall success on their own.

Think of it like a movie—KPIs are the main characters driving the story, while metrics are the supporting characters that add value but don’t necessarily define the plot.

For example, a company’s KPI might be to reduce customer churn rate to below 5% in six months. The supporting metrics, such as customer support response time, number of complaints resolved, and customer satisfaction scores, help measure progress toward that goal.

The KPI sets the objective, while the metrics provide insights on how to achieve it.

Every KPI Is a Metric, But Not Every Metric Is a KPI

For example: A KPI is like a soccer goalie—it has a specific role (protecting the goal) and is directly tied to the team’s success. Other metrics are like the rest of the team—they support the KPI but don’t necessarily have a direct goal-related function.

A business KPI could be to increase online sales by 25% in six months.
Supporting metrics might include website traffic, conversion rates, and average order value.

The KPI defines the business objective, while metrics track various aspects of performance.

KPIs vs Metrics Examples

Now that we’ve covered the differences between KPIs and metrics, let’s look at an example to see how they help track specific objectives.

Suppose your business aims to increase sales by 25% in 12 weeks. This goal involves multiple departments, each tracking different metrics to measure their contributions toward achieving it.

KPI: Sales Growth

The KPI in this case is sales growth, which compares current sales with previous periods. It helps track individual sales reps' performance and measures the overall percentage increase in sales over time.

While the KPI provides an overview of sales growth, deeper analysis requires tracking specific sales metrics to understand what drives progress.

Metric: Lead-to-Conversion Ratio

One important metric is the lead-to-conversion ratio, which measures how many leads become paying customers. This directly impacts sales growth by showing how effectively leads are converted.

This metric also provides insights into employee performance, such as which sales reps converted the highest percentage of leads into customers.

Similarly, other metrics like lead-to-opportunity ratio, net profit margin, and monthly sales help analyze the detailed performance behind achieving the KPI of sales growth.

Stop Guessing, Start Tracking the Right Data

Tracking numbers is important, but tracking the right numbers determines success. KPIs vs Metrics is a common comparison in business performance tracking—KPIs show progress toward business goals, while metrics provide details to support decision-making.

Many businesses collect large amounts of data but overlook what truly matters. They focus on general figures instead of performance indicators that drive real results. Metrics offer useful insights, but KPIs confirm whether a business is on the right path.

To make informed decisions, choose KPIs that match your business objectives and use supporting metrics to guide improvements. Rather than collecting data without purpose, use it to measure success, refine strategies, and drive growth. Numbers provide valuable information—it’s up to you to track what really counts.