Key Performance Indicator (KPI) Examples

Key Performance Indicator’ (or KPI) is a metric which is one of the most important indicators of the current performance level of an individual, department and/or a company in achieving goals.

Following are examples of good Key Performance Indicators (KPI):

#1 Gross Profit

#2 Gross Profit Margin 

#3 Operating Profit – 

#4 Operating Profit Margin

#5 Net Profit

#6 Net Profit Margin

#7 Sales Growth Rate

#8 Total Economic Value

#9 Return on Investment (ROI)

#10 Return on Ad Spend (ROAS)

#11 Net Promoter Score

#12 Customer Lifetime Value

#13 Customer Retention Rate

#14 Customer Profitability Score

#15 Cost Per Lead

#16 Cost Per Acquisition

#17 Revenue Per Acquisition

#18 Per Visit Value

#19 Goal Conversion Rate

#20 Ecommerce Conversion Rate

#21 Average Order Value

#22 Task Completion Rate

#23 EPS (earnings per share)

#24 Price to Earnings Ratio (P/E)

#1 Gross Profit

It is the profit after production and manufacturing costs.

Gross Profit = Sales – Direct Cost.

A direct cost can be something like the cost of manufacturing a product.

#2 Gross Profit Margin

It is used to determine the effectiveness of your business in keeping production costs in control.

Gross Profit Margin = (Gross Profit/ Sales) * 100

Higher the gross profit margin, the more money is left over for operating expenses and net profit.

#3 Operating Profit

It is the profit before interest and taxes.

Operating Profit = Sales – Operating Cost.

Operating cost is the ongoing cost of running a business, product or system. It can include both direct and indirect costs.

#4 Operating Profit Margin

It is used to determine the effectiveness of your business in keeping operating costs under control.

Operating Profit Margin = (Operating Profit/ Sales) * 100

Higher the operating profit margin, the more money is left over for net profit.

#5 Net Profit

Also known as net income, net earnings, bottom-line. It is the profit after interest and taxes

Net Profit = Sales – Total cost (this includes any direct and indirect cost + interest + taxes)

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#6 Net Profit Margin

Also known as profit margin, net margin, net profit ratio. Net profit margin is used to determine the effectiveness of your business in converting sales into a profit.

Net Profit Margin = (Net Profit/ Sales) * 100

A low profit-margin indicates a higher risk that a decline in sales will erase profits and result in a net loss.

#7 Sales Growth Rate

Also known as the revenue growth rate, sales growth rate is a measure of the percentage increase in sales between two time periods.

Revenue Growth Rate = (Current month’s Sales – Last month’s Sales) / (Last month’s Sales) * 100

#8 Total Economic Value

It is the total value added by your product/service/campaigns to the business bottom-line.

Total Economic Value = Total Sales + Total value of the assisting conversions + Total value of the last click conversions

The ‘total economic value’ also takes into account the role played by micro conversions and conversions which assisted and completed sales.

#9 Return on Investment (ROI)

It is used to evaluate the efficiency of your investment or to compare the efficiency of different investments.

ROI= (Gain from investment – the cost of investment)/cost of investment

#10 Return on Ad Spend (ROAS)

It is used to evaluate the efficiency of investment in an ad campaign.

ROAS = (Sales from the investment – the cost of investment)/cost of investment

ROAS is different from ROI in the sense that it takes only ad cost into account. Whereas ROI takes total cost into account.

#11 Net Promoter Score

It tells how likely it is that your customers will recommend your business to a friend or colleague.

More information about Net Promoter Score.

Net promoter score = % of promoters – % of detractors

#12 Customer Lifetime Value

It is the projected revenue (repeat business) a customer will generate during his lifetime.

Different types of customers have different lifetime value (LTV).

One of the best ways to boost LTV is by improving customer satisfaction.

(Average order value) X (Number of Repeat Transactions) X (Average customer lifespan in months/years)

Average customer lifespan means how long he/she remains your customer.

#13 Customer Retention Rate

It is used to determine how good your company is in retaining customers.

Customer Retention Rate = [1- (Customers lost in a given time period/total number of customers acquired in the same time period)] * 100

#14 Customer Profitability Score

This score is used to separate profitable customers from unprofitable customers.

Customer profitability score = Revenue earned through a customer – Total cost associated with customer’ acquisition, management, service, and retention

#15 Cost Per Lead

It is the average cost of generating a lead.

Cost per lead = total cost/total leads

#16 Cost Per Acquisition

It is the average cost of acquiring a customer or generating a conversion.

Cost Per Acquisition = Total Cost/ Total acquisitions

#17 Revenue Per Acquisition

It is the average revenue earned through an acquisition.

Revenue Per Acquisition = Total Sales / Total acquisitions

#18 Per Visit Value

It is the average value of a visit to your website.

Per Visit Value = Total Sales / Total Visits

#19 Goal Conversion Rate

It is the percentage of visits that result in goal conversions.

Goal Conversion Rate = (Total Goal conversions / total visits) *100

#20 Ecommerce Conversion Rate

It is the percentage of visits that result in ecommerce transactions.

Ecommerce Conversion Rate = (Total E-commerce transactions/ total visits) *100

#21 Average Order Value

It is the average value of an ecommerce transaction.

Through this metric, you can measure how effective your upselling and cross-selling efforts are and whether you are helping people in finding the product they are looking for.

Average order value = Total Revenue/Total ecommerce transactions

#22 Task Completion Rate

It is the percentage of people who came to your website and answered ‘yes’ to this survey question: “Were you able to complete the task for which you came to the website?

Task completion rate = (number of people said ‘yes’ to the survey question/ Total number of survey responses) *100

#23 EPS (earnings per share)

EPS stands for earnings per share. It is an indicator of a company’s profitability. Higher the EPS, the more profitable the company is to investors.

Since EPS measures the company’s profitability, a negative EPS means the company is not profitable for investors.

Earnings per share is quite meaningless if analyzed on its own. Although the higher the number the better for shareholders themselves.

EPS is most useful as a comparison metric.

EPS is generally considered to be the single most important variable in determining a share’s price.

Formula to calculate EPS:

Net Earnings / average number of Outstanding Shares

For example,

Company A had earnings of $100 million and 10 million shares outstanding, which equals an EPS of 10 ($100 Million / 10 Million = 10).

Company B had earnings of $100 million and 50 million shares outstanding, which equals an EPS of 2 ($100 Million / 50 Million = 2).

So, Company ‘A’ seems to be more profitable to investors.

Types of EPS

  1. Trailing EPS – previous year’s EPS and the only actual EPS. It is often compared with the current EPS
  2. Current EPS – is the current year’s EPS.
  3. Forward EPS – is a forecast of what the EPS might be in the future.

Note: Most recorded and quoted EPS values are trailing.

#24 Price to Earnings Ratio (P/E)

The Price to Earnings Ratio gives you an idea of what the market is willing to pay for the company’s earnings. The higher the P/E the more the market is willing to pay for the company’s earnings.

P/E metric is quite meaningless if analyzed on its own. Although the higher the number the better for shareholders themselves.

P/E is most useful as a comparison metric.

Formula to calculate P/E – Current Stock Price/EPS

For example, a company with a share price of $40 and an EPS of $8 would have a P/E of 5 ($40 / 8 = 5).

Note: Companies that are losing money do not have a P/E ratio.

 There is virtually no limit to the number of good KPIs you can find and use. It all depends upon the nature of the business and the industry you work in and your goals.

For example, if you work in an industry where majority/all of the conversions happen offline via phone calls then you can use ‘Phone Calls’ as your KPI.

To learn more about KPIs check out this article: KPI Meaning (What is KPI), Examples & Calculations – Tutorial 

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Himanshu Sharma

Digital Marketing Consultant and Founder of Optimizesmart.com

Himanshu helps business owners and marketing professionals in generating more sales and ROI by fixing their website tracking issues, helping them understand their true customers' purchase journey and helping them determine the most effective marketing channels for investment.

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