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Metric or KPI? Numbers tied to a goal

6 minutes, 8 steps, workout 1 of 6 in this module

Interview cases often start like this: here is a dashboard with forty numbers, which ones would you show the CEO? The same thing happens with your first weekly report. If you can't connect numbers to what the business is trying to achieve, you paste in everything the platform exports, and the reader can't tell whether the month went well or badly.

What you'll be able to do

By the end of this workout, you'll be able to tell a metric from a KPI, pick 3-5 KPIs for a concrete goal, and turn a revenue goal into a number your team can act on.

A first look: A metric is anything you can count. A KPI is a metric with a job

Your ad platforms, GA4 and your store dashboard give you hundreds of numbers. All of them are metrics. A KPI (key performance indicator) is the small set you pick because they answer one question: are we reaching the goal? A good KPI has three parts: it's tied to a specific goal, it has a target (a number and a date), and it has an owner who checks it every week. If a number doesn't change any decision, it's a metric, not a KPI. Most teams need 3-5 KPIs, not 30.

Example: Northpack's goal: “Grow the online store profitably.” KPIs: monthly revenue, contribution margin, and customer acquisition cost. Metrics they still look at, but don't report on: impressions, CPM, average session length.

What this workout covers

  1. 1A metric is anything you can count. A KPI is a metric with a job
  2. 2Lagging and leading: the result, and what predicts it
  3. 3Case: Northpack's 12-number report
  4. 4Set complete: the KPI checklist

A question from this workout: Northpack's 12-number report

Northpack's founder gets a weekly report with 12 numbers and says, “I can't tell if we're doing well.” The goal for the year is to grow the online store profitably. Here's a part of the report.

Instagram followers
48,200 (+1,100)
Impressions
2.4M
Sessions
41,000
Revenue
$72,000
Contribution margin after ads
$14,400
Customer acquisition cost
$31
Average time on site
2:10

Which three numbers go at the top of the report as KPIs?

  1. Followers, impressions, sessions
  2. Impressions, average time on site, sessions
  3. Revenue, contribution margin after ads, customer acquisition cost
  4. Followers, revenue, average time on site

Pick your answer first, then open the reasoning below.

Show the answer and the reasoning

Answer: C. Revenue, contribution margin after ads, customer acquisition cost

The goal has two words: grow (revenue) and profitably (margin and acquisition cost). Those three numbers answer it, and the rest explain them. The most common mistake is the first option. Followers, impressions and sessions are all “more people saw us” numbers. They can all go up in a month when profit goes down.

The other steps work the same way: you decide first, then see why each option is right or wrong.

How you practice here

  • 3 short concept cards
  • 2 multiple-choice questions
  • 1 campaign case with real-looking numbers
  • 1 matching exercise
  • 1 guided calculation