A Key Performance Indicator (KPI) is a measurable metric of performance for a particular task over a particular period of time. Every company has its own method of setting KPIs, and every department will have its own set of KPIs.
Some common KPI examples in sales include: revenue/deals per sales rep, lead conversion ratio, customer lifetime value, churn rate, sales cycle length, and win/loss ratio percentage.
KPIs help companies track performances of employees, teams and departments, and determine whether those performances are aligned with company objectives. KPIs also provide a target-oriented framework that helps employees channel their efforts in the right direction, and gives them a big-picture view of the company's short-term and long-term goals.
