How to write KPIs in 4 steps

KPI stands for key performance indicator, an essential ingredient for making business decisions. KPIs measure ongoing performance by providing you and your team with an overview of how the business, holistically or at a department level, is performing against goals.

You have a business strategy and goals and objectives. Now it’s time to write your KPIs so you can measure progress toward those goals.

4 steps to write KPIs for your company (with examples)

It’s important that KPIs are tailored to your situation and developed to help you achieve your goals. Follow these 4 steps to write clear, measurable KPIs.

1. Write a clear objective for your KPI

Your KPI should be connected to a key business objective. Without that alignment, you’re working toward a goal with no impact for your organization and no thread to company goals. A KPI needs to be more than an arbitrary number. It should tie into the strategic objectives of your organization and outline the steps you’ll take to achieve them.

For example, say the company wants to increase revenue by 10% this quarter. You’re on the marketing team, so you look at this company-wide goal and set a KPI for your team: increase marketing qualified leads (MQLs) by 15% this quarter. This contributes to the overall revenue goal because qualified leads mean potential revenue.

2. Share your KPI with stakeholders

KPIs are a form of communication. They should be succinct, clear, and relevant. Communicate your KPIs with stakeholders. Give context: explain what you’re measuring and why. Share your KPIs with employees and stakeholders so they know the direction your team is going.

When information is withheld it creates misalignment. Listen for feedback and questions so you can refine how you communicate your goals and KPIs. A good tip to remember: KPIs should inspire action.

If we use the MQL example above, share your KPI with the teams it will directly impact, like sales. An increase in MQLs will result in an increase in sales qualified leads (SQLs) and wins, so inform teams that will see impact from your KPIs so you can work together to reach your goals.

3. Review your KPIs on a consistent basis

Review KPIs from two perspectives: your progress against the KPI (by looking at your business metrics) and whether the KPI itself is effective. If you’re not making progress, the KPI may have missed the mark and it’s time to iterate. Don’t be afraid to iterate. KPIs should be reviewed consistently so you have time to refine them.
To review progress against the marketing qualified leads KPI, track marketing qualified leads, MQL to SQL conversion rate, and lead to win rate. When you look at these metrics, ask: Are the numbers where they should be to achieve the KPI? Is progress steady? Are there any areas of concern to investigate? If the MQL metric is trending down compared to previous months, you’re likely off track.

4. Create actionable KPIs

Here are 5 ways to make KPIs actionable.

• Review business objectives: KPIs aren’t static. They should evolve as objectives evolve, and your actions should change with them.
• Analyze current performance: Are you setting achievable targets? Analyze historical performance to set a baseline for what you’ve accomplished in the past using a platform like Klipfolio.
• Set short and long term targets: Set long-term goals (quarterly or yearly) and work backward to identify the milestones you need to reach along the way. This lets you reassess and change course as needed.
• Review targets with your team: Keep everyone in the loop so the team works toward the same outcome.
• Review progress and readjust: Make it a habit to check in on status. KPIs aren’t set and forget. Regularly check in on performance and relevance. Once it’s a habit, it gets easier every time.

Now that you have the 4 steps to write a KPI, here is what your KPI would look like using the MQL example.

That’s it. Four simple steps to consider when you’re developing and writing KPIs.

If you want to learn more about key performance indicators and how to incorporate them into your daily workflow, read about business KPIs.