What is difference between KPIs and Metrics?
We always use KPIs and Metrics to measure the performances of Products and, very often, we use these interchangeably. It is important to understand the difference between these two.
First of all both are quantifiable measurement of Strategic or Tactical activity.
KPIs are Strategic while Metrics are Tactical.
What are Metrics?
Metrics or Business Metrics are quantifiable measure used to gauge performance of a business activity. You use this “metric” to define the success or failure of that business activity.
For example if your goal is to get 10k monthly visitor for your website, then “monthly website visitor” will become your metric.
What are KPIs?
Key Performance Indicator (KPI) , as the name suggests, are most important “metrics” you have, that shows how effective you are at achieving your business objective. KPIs must have these three things — Targets, Specific timeframe to achieve these targets and be relevant to business outcome. Metrics may or may not have all of these three.
KPIs are metrics (Indicators) that are directly aligned with your business goals (Key), and measure how successful (Performance) you are at achieving your objectives — (Dave Gerhardt)
Example of KPIs may be targeted % increase in revenue annually.
KPIs vs Metrics
KPIs define set of processes against which Metrics are measured. In simple terms, KPIs support Strategic Business goal, metrics support KPIs.
Why do we have metrics other than KPIs?
Just because KPIs are your most important Metrics, does not mean you do not need other Metrics. When KPIs go haywire, other Metrics help in diagnosing the problem.
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