Teams often use KPI and metric interchangeably. That creates confusion when nobody agrees on what should actually drive a decision.

A metric is a measurement

Examples include orders, revenue, sessions, conversion rate and average handling time. Metrics describe what is happening.

A KPI is tied to an important objective

A KPI should have a clear business purpose, owner, definition, target and review cadence.

Define the calculation

Write down numerator, denominator, filters, time window, grain and exclusions. This prevents teams from producing different numbers with the same label.

Document the decision

A useful KPI should answer: what decision changes when this number moves?

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