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What Are the Different Types of Performance Metrics?

By Jan Fletcher
Updated May 16, 2024
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Performance metrics define in quantitative terms the performance of various activities in a business. Types of performance metrics include those used to analyze business productivity, marketing and sales, financial performance, customer-relations management, and environmental metrics. This list is not all inclusive, as metrics may include anything within a company's domain of activity that can be measured analytically.

Metrics that measure productivity analyze factors such as output per hour, days lost to injury, and frequency of supply-chain interruptions. An example would be using performance metrics to determine which shifts are more productive or less, or how many man hours were lost due to injuries in the workplace. Another example would be manufacturing output measured against performance incentives.

Quantitative productivity data may be used to justify retooling costs, for example, or to reconfigure the manufacturing operation in its entirety. Production metrics may also reveal bottlenecks, slack in the system, or excessive waste. Some companies have significantly reduced manufacturing waste by tracking and analyzing discarded material, then using those metrics to adjust future orders for goods and materials up or down.

Marketing metrics may be used to measure the performance of product lines, sales team performance, competitor analysis, or to gauge consumer demand and engagement. Responses to advertising campaigns and data derived from public opinion polls are also examples of the types of metrics that are used to quantify a company's marketing efforts. An article in CFO Magazine in 2007 reported that Best Buy® discovered, through tracking performance metrics, that a 0.1% boost in customer engagement correlated with a $100,000 US Dollar (USD) increase in a store's annual operating income. Financial metrics analyze a company's fiscal strength and performance in terms of cash flow, profit margin, overhead costs, cash reserves, and other similar quantitative data.

Stakeholders, such as consumer advocacy groups, or stockholders of the company, may look at corporate responsibility as it is revealed through an analysis of actual social performance. Such environmental metrics may also track social responsibility by calculating the environmental footprint of a company. Environmental metrics may also quantify the impact of weather patterns on productivity, or how the local labor market may be impacting job recruitment and retention.

Tracking the feedback from performance metrics produces hard evidence, which a company uses to chart a strategy. Collecting raw data alone is insufficient. The key to unlocking valuable nuggets of information is in pairing one set of metrics to another. Only then are relationships of one key metric to another revealed.

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Discussion Comments
By icecream17 — On Aug 07, 2011

I wanted to say that website performance metrics are also important because you need to understand how effective your website is with respect to your business.

Learning about how consumers are finding your website and how long they stay on your website can tell you if you have the right information on your website or if is set up in a user friendly fashion.

You also want to determine how many customers actually purchase items from your website and how many of those customers return to buy more stuff. All of these performance metrics examples will really help you measure the effectiveness of your website.

By sunshine31 — On Aug 07, 2011

I think that sales performance metrics should be visibly displayed and the results should be posted so that all of the sales staff can see how are they are doing.

This really motivates a lot of members of the team to continue what they are doing or to pick up the pace a little. Most performance measurement metrics in this area involve closing percentages and the average size of the sales order in dollar amounts.

When I worked in sales, my company also measured our monthly revenue as well as our percentage of conversions which involved the amount of leads that we were able to convert to regular customers.

I know that some retail companies also measure the number of warranties sold for high ticket items as another metric because this area is pure profit for a company.

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