How to Set Good Business KPIs (Key Performance Indicators)

Running a business without tracking performance is like driving with your eyes closed. Sure, you might stay on the road for a while, but eventually, you're going to hit something. That’s where KPIs—Key Performance Indicators—come in.

But here’s the thing: not all KPIs are helpful. If you track the wrong metrics, you might think your business is doing great when it’s actually struggling. Or worse, you’ll waste time on numbers that don’t lead to real growth.

At DaZZee, we help businesses make sense of their data with Datalytics, our business intelligence and analytics service. Today, we’re breaking down how to set the right KPIs so you can measure what truly matters.

Start with Your Business Goals

KPIs should tie directly to your goals. Before choosing what to track, ask yourself:

• What does success look like in your business?
• Are you trying to increase revenue? Improve customer retention? Reduce downtime?
• Which areas need the most improvement?

For example, if your goal is to increase sales, your KPI might be monthly revenue growth or conversion rates. If you’re focused on customer service, you might track response times or customer satisfaction scores (CSAT).

Make Sure Your KPIs Are SMART

A good KPI isn’t just a random number—it should be SMART:

• Specific – Clearly define what you're measuring (e.g., “Increase website traffic by 20% in 6 months”).
• Measurable – If you can’t track it, it’s not a KPI.
• Achievable – Be ambitious, but realistic.
• Relevant – If it doesn’t impact your business, why track it?
• Time-bound – Give yourself a deadline to measure progress.

A bad KPI: “We want more customers.”

A good KPI: “Increase new customer sign-ups by 15% over the next quarter.”

Track Leading vs. Lagging Indicators

There are two types of KPIs:

• Lagging indicators tell you what already happened (e.g., revenue last quarter).
• Leading indicators predict future success (e.g., number of new leads this month).

If you only track lagging indicators, you’ll always be reacting instead of planning ahead. The best approach? Use both. For example, if you run an online store:

• Lagging KPI – Total sales last month.
• Leading KPI – Website traffic and cart abandonment rate.

Choose the Right Number of KPIs

Tracking too many KPIs is like drinking from a firehose—you won’t know what’s important. Stick to 5-7 core KPIs that truly matter for your business.

For example, a small business might focus on:

1. Revenue growth (Are we making more money?)
2. Customer acquisition cost (How much do we spend to get a new customer?)
3. Customer retention rate (Are people coming back?)
4. Employee productivity (Are we operating efficiently?)
5. Net profit margin (How much do we actually keep?)

Use the Right Tools to Track KPIs

Manually tracking KPIs with spreadsheets? That’s a waste of time. Business intelligence tools like Domo, integrated with DaZZee’s Datalytics, make it easy to see real-time data, create dashboards, and get insights without digging through reports.

When your data is clear and accessible, you can make faster, smarter decisions—without second-guessing if you’re focusing on the right numbers.

Review and Adjust Regularly

KPIs aren’t set in stone. If a metric isn’t helping you make better decisions, drop it. Every few months, review your KPIs to make sure they’re still relevant and driving results.

Ask yourself:

• Are these KPIs actually helping us improve?
• Do we need to adjust our targets?
• Should we add or remove any KPIs based on new goals?

The goal isn’t just to track numbers—it’s to use them to grow your business.

Set KPIs That Drive Action

KPIs are only useful if they help you make better decisions. If you’re just tracking numbers for the sake of it, you’re missing the point.

At DaZZee, we help businesses turn data into decisions with Datalytics, our analytics service powered by Domo. If you're tired of guessing and want real-time insights into your business performance, let's talk.

Need Help Tracking the Right KPIs?

Schedule a consultation with DaZZee, and let’s build a KPI strategy that actually moves the needle for your business.