What Is a KPI? Definition, Examples & Best Practices
Key Performance Indicator A Key Performance Indicator (KPI) is a quantifiable metric that measures progress toward a specific business objective. KPIs are the subset of metrics that matter most: the ones that, if they moved significantly, would indicate success or failure. Not every metric is a KPI. KPIs are chosen because they directly reflect strategic goals.
Why key performance indicator matters
KPIs focus the team on what matters. Without defined KPIs, teams track everything and act on nothing. Well-chosen KPIs create alignment: everyone knows what success looks like, can measure progress, and can make trade-off decisions based on impact to KPIs.
How it works
Start with your strategic objectives. For each objective, identify the metric that best indicates progress. Ensure the metric is specific, measurable, and actionable. Set targets (what "good" looks like). Review KPIs weekly or monthly. Limit KPIs to 3-5 per team to maintain focus.
Common mistakes
Tracking too many KPIs (if everything is a KPI, nothing is)
Choosing vanity metrics (page views) instead of actionable metrics (activation rate)
Setting KPIs without targets
Not reviewing KPIs regularly enough to act on them
Related terms
How Vantage relates
Vantage connects to your analytics data, so your KPIs are part of the context that informs PRD generation. When creating a project, the AI can reference your actual metrics to ground the spec in real performance data.