Sales glossaryKPI (Key Performance Indicator)

What does KPI (Key Performance Indicator) mean in sales?

Busy? Here's the short answer:

KPI (Key Performance Indicator) is a measurable number that helps businesses keep track of how well they're doing and if they're reaching their goals. KPIs can be company-wide (ex: ARR growth) or individual (ex: meetings booked per week)

What is a KPI (Key Performance Indicator)?

A KPI, short for Key Performance Indicator, is a fundamental tool used in business to measure and track performance. It provides valuable insights into how effectively a company is progressing towards its goals. KPIs are quantifiable and specific, making it easier for businesses to evaluate success, identify areas for improvement, and make data-driven decisions.

Key Takeaways:

  • KPIs are measurable numbers used to track business performance and goal attainment.
  • They can be company-wide, focusing on overall success, or individual, assessing specific contributions.
  • Using KPIs helps businesses stay on track, optimize processes, and drive growth.

Why KPIs Matter in Business

In the fast-paced world of sales, marketing, and operations, KPIs play a pivotal role in steering businesses towards success. Here are some reasons why KPIs matter:

1. Performance Measurement and Progress Tracking

KPIs serve as yardsticks for measuring performance and progress towards organizational objectives. By setting clear and achievable KPIs, businesses can easily gauge their success, making it evident whether they're on the right track or need to adjust strategies.

2. Identifying Strengths and Weaknesses

Analyzing KPIs provides businesses with valuable insights into their strengths and weaknesses. For instance, a low conversion rate in a sales team's KPIs might indicate the need for improved sales training or lead generation strategies.

3. Decision Making

Data-driven decision making is vital in a competitive landscape. KPIs offer the necessary data to make informed choices, optimize processes, and allocate resources effectively.

Real-Life Examples of KPIs

Let's explore some real-life examples of KPIs in different business areas:

  1. Sales: Sales Growth Rate, Customer Acquisition Cost (CAC), Monthly Revenue, Conversion Rate.

  2. Marketing: Website Traffic, Cost per Lead (CPL), Email Open Rate, Return on Investment (ROI) from Marketing Campaigns.

  3. Customer Support: Customer Satisfaction (CSAT) Score, Average Resolution Time, First Response Time.


Q: How do I determine the right KPIs for my business?

A: Identifying the right KPIs depends on your business goals and industry. Start by defining your objectives, and then choose KPIs that align with those objectives. Consider consulting with industry experts to ensure you select the most relevant KPIs.

Q: Are KPIs static, or should they be updated regularly?

A: KPIs are not set in stone. As business goals change and evolve, it's essential to review and update KPIs regularly to ensure they reflect the current objectives and direction of the company.

Q: Can KPIs be applied to individual employee performance?

A: Absolutely. Individual KPIs are an excellent way to track and evaluate an employee's performance and contributions to the organization's overall success.

In conclusion, KPIs are indispensable tools for businesses seeking to achieve their objectives efficiently and effectively. Whether tracking company-wide growth or individual performance, KPIs provide valuable data-driven insights to make informed decisions and drive success. Embrace the power of KPIs to navigate the competitive landscape and steer your business towards growth and prosperity.

Related terms...

ARR (Annual Recurring Revenue)

ARR stands for Annual Recurring Revenue. It represents the total yearly revenue a company expects to generate from recurring customer charges. ARR is a key metric for subscription-based business models.

Learn more


B2B, short for Business-to-Business, refers to a business that sells products or services direclty to other businesses instead of individual customers.

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B2C, short for Business-to-Consumer, referrs to a business that sells products or services direclty to the indivual consumer, rather than to other company entities.

Learn more

All terms

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