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What is a Key Performance Indicator?

A key performance indicator is a measurable value that indicates the success (or failure) of a company regarding its goals. High-level KPIs show the overall performance of a business, while low-level KPIs reflect the outcome of specific departments, projects, or campaigns.

Why are KPIs important?

KPIs are necessary to evaluate high-level strategies as well as individual actions regarding their ability to contribute to a company’s goals. They are helpful information in decision-making processes. Based on KPIs, stakeholders can identify problems and make decisions about continuing, canceling, and funding single measures.

Not every Metric is a KPI

App owners can measure tons of different metrics, but not every metric helps evaluate business success properly. For instance, the number of messages sent between players in a multiplayer game is irrelevant. Key performance indicators have to be relevant to business goals. Otherwise, they create confusion instead of making decisions easier.

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