Key performance indicators represent the most important metrics in your company and should guide your company to growth.

In order to achieve that, it is necessary to align your KPIs with your overall business goals. This could be an increase in profit, a reduction in cost or an expansion to new markets. KPIs are supposed to move the needle, therefore keep them limited.

To create effective KPIs use these 4 steps:

1. Define your companies’ overall goal
2. Define what metrics will help reach this goal (Example: The overall goal is to increase customer lifetime value by 2%. A possible underlying metric which directly influences this goal is the average order size per customer)
3. Prioritize metrics based on business impact and viability.
4.Create doable action steps to improve the underlying metrics.

Make sure to track KPIs in a dashboard to keep an overview and regularly share them with your team to keep everyone aligned.

Not sure which metrics to track? Check out this article where you will learn the most important metrics in your conversion funnel.