What are Business Metrics?

Track all your metrics in one place.

A business metric is a quantifiable measure used to track and assess the status or performance of a specific business function. Metrics are used to measure progress towards short and long-term goals and objectives. 

Every area of the business has specific metrics to monitor:

• Finance teams track revenue metrics like MRR or customer acquisition cost

• Executive teams track big picture business metrics like customer lifetime value or annual recurring revenue

• Marketing teams track campaign performance and program statistics with engagement rates and marketing qualified leads

• Sales team track won opportunities and expansion revenue

Business Metric or Key Performance Indicator? What’s the difference?

What’s the difference between a metric, a measure, and a KPI? Metrics are the units of measurement used in KPIs. KPIs, or key performance indicators, are metrics with a target and timeline baked into them. KPIs are the action; metrics are the measurement.

For business metrics, they are most effective when they are compared against established benchmarks or business objectives. Benchmarks can be internal, external, performance, or industry established. This provides context for the metric. 

Context inspires action and impact. For example, $20M in Q4 sounds like an impressive figure, but if you’re a Fortune 500 company, that figure might have you worrying. 

Context is where the biggest difference lies between metrics and key performance indicators. The difference is:

• Business metrics are used to track performance across all areas of the business

• KPIs track your progress towards a goal 

In action, this would look like this:

A metric measures web traffic compared to a goal or benchmark. A KPI measures how web traffic impacts your SQL pipeline. 

Here are a few additional resources to answer any KPI questions, like what is a KPI? and why are KPIs important?