We <\/span>are excited that Brightpearl has invited us to share some insights into metrics, KPIs, data visualizations and why it matters. This blog takes a look at the difference between the two, what key indicators you should look out for, and how using dashboards can bring your metrics to life.\u00a0<\/span><\/p>\n <\/p>\n Ever felt a little bit lost when hearing about \u201cBusiness Intelligence\u201d? You\u2019re not alone if at some point you\u2019ve ever wondered what people mean by \u201cKPI\u201d, \u201cmetrics\u201d, or \u201canalytics\u201d. With so many businesses and news outlets offering advice on how to use data, the BI corner of the web is teeming with this kind of industry jargon.<\/span><\/p>\n To add insult to injury, it\u2019s fairly common to see some of these terms used interchangeably. The problem is, they aren\u2019t the same\u2014and using them correctly does make a difference.<\/span>\u00a0<\/span><\/p>\n The way we use words changes the way we think about and understand them. So using these BI terms interchangeably not only can create confusion, it can actually be bad for business.<\/span><\/p>\n To harness the full power of your data, it\u2019s important to understand the relationship between KPIs and metrics, and how to use them. That\u2019s why we\u2019re setting the record straight, once and for all.<\/span>\u00a0<\/span><\/p>\n Metrics and KPIs are like squares and rectangles: All squares are rectangles, but not all rectangles are squares. So while all KPIs are metrics, not all metrics are KPIs. Clear as mud? Let\u2019s dig a little deeper\u2026<\/span><\/p>\n Metrics, sometimes called business metrics, are quantifiable measures used to gauge performance or progress. To create a metric, you take data from a live source (i.e., it\u2019s still updating with new information) and monitor it to track progress toward a business objective.<\/span><\/p>\n For example, if one of your goals is to get 100k in monthly sales, you can take raw POS or eCommerce<\/a> data from Brightpearl and track individual sales to measure progress toward your goal. In other words, \u201cMonthly Sales\u201d becomes one of your metrics.<\/span><\/p>\n Data sources can also be qualitative, such as when you\u2019re an early stage startup trying to find product-market fit. In that situation, your data source may be customer interviews where you track responses about what they like or dislike about your product. Your metric then could be the ratio of positive vs. negative sentiment, or a list of necessary improvements, because these help you understand your progress toward product-market fit.<\/span><\/p>\n So what metrics should be KPIs? The difference really depends on your business. Here\u2019s why:<\/span><\/p>\n KPI stands for \u201ckey performance indicator.\u201d By definition, not every metric you measure can be \u201ckey\u201d\u2014if they\u2019re all special, none of them really are. So it\u2019s up to you to choose metrics that are most closely aligned with your critical business objectives. This subgroup of metrics become your KPIs.<\/span><\/p>\n Learn which important operational KPIs you should be tracking.<\/a><\/p>\n This leads us to another important point: Not everything that your business ends up tracking and measuring will be an accurate indication of performance.<\/span><\/p>\n For example, while you certainly want to track metrics like your number of Facebook likes and see it improve, that metric won\u2019t tell you how well you\u2019re managing your business. (Heck, unless your marketing team just ran an email campaign with the specific goal of getting more followers on Facebook, it likely won\u2019t tell anyone much about anything.) Metrics like these are often called \u201cvanity metrics.\u201d They\u2019re easy to get hyped-up about, but provide very little insight into your business. In short, they\u2019re a big \u201cno-no\u201d (they get the axe when it comes to selecting KPIs<\/span><\/p>\n One easy way to think of KPIs is like your company\u2019s vital signs\u2014if your business\u2019s pulse is flatlining, you shouldn\u2019t be fretting over zits. KPIs dial in your focus on the things that matter most to keep your business alive and well. Remember though, it\u2019s ultimately up to you to define which metrics are true vital signs for your business.<\/span><\/p>\n Just because your KPIs are your most important metrics doesn\u2019t mean the rest of your metrics are obsolete. When one of your KPI vital signs goes haywire, you need to be able to look at other metrics to properly diagnose the problem.<\/span><\/p>\n Let\u2019s say inbound leads is one of your KPIs, and that number suddenly takes a nosedive. While the KPI tells you there\u2019s a problem, your other metrics will help you figure out what happened. Maybe it\u2019s because there are broken links on your website, or there\u2019s an error blocking leads from pushing to your CRM, or Facebook changed their algorithm and killed your most highly-converting ads. To identify the root cause, you\u2019ll have to look at metrics such as site conversions, CRM data, ad impressions and clicks, etc.<\/span>\u00a0<\/span><\/p>\n We recommend using a data dashboard from Grow to manage your metrics and KPIs. Dragging data from dozens of apps into an Excel spreadsheet isn\u2019t just a colossal waste of time; it creates reports that are hard to make, hard to read, hard to understand, quickly outdated \u2026 and pretty ugly (to be brutally honest). Plus, you have to deal with the headache of creating them on a regular basis.<\/span><\/p>\n On the other hand, Grow\u2019s data dashboards bring your metrics to life with beautiful visualization (much better than endless spreadsheet cells). They also allow you to create specific KPI-only dashboards to stay focused. It\u2019s an extremely effective way to drive your business decisions and accelerate growth.<\/span><\/p>\n We recommend using Brightpearl to manage orders, inventory<\/a>, customer data, accounting, etc., then set up an account with Grow to track your most important KPIs and Metrics. Together these two platforms let you easily manage your company to success.<\/span><\/p>\nWhat\u2019s the difference between metrics and KPIs? What do they even mean? \u2014 and how it can make all the difference for your business<\/h2>\n
Change your perspective<\/h2>\n
Metrics vs. KPIs<\/h2>\n
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<\/p>\nBusiness metrics<\/h2>\n
Key performance indicators, or KPIs<\/h2>\n
Why you need to track both KPIs and Metrics<\/h2>\n
Managing metrics and KPIs with a dashboard<\/h2>\n
![\"\"](\"https:\/\/www.brightpearl.com\/wp-content\/uploads\/2016\/12\/understanding-metrics-kpis-retail-2.png\")
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