KPI: Key Performance Indicator
What is a KPI?
KPI is the abbreviation of « Key Performance Indicator ». A KPI is a measurable performance indicator. It allows to measure the performance of actions, equipments or processes vs. a set goal.
How are KPIs used?
There is a great diversity of KPIs. Their choice will depend to a large extent on the objective desired and the strategy followed.
Examples of KPIs:
- Market share level
- Numeric distribution level
- Out-of-stocks ratio
- % of promotional pressure
Even if few, these indicators are fundamental in order to to measure progress towards achieving the objectives. For example, a sales team of FMCG products whose goal is to introduce new references to the market may be measuring the market share of these products month by month in order to achieve an X share.
In this case it may also be interesting to measure the level of numeric distribution of this reference and its evolution to ensure that the product is being distributed and made available to consumers as quickly as possible.