📖 Chapter 5: How to Define KPIs That Actually Matter 🎯

Most businesses track Key Performance Indicators (KPIs), but do they track the right ones? Often, KPIs focus on internal metrics rather than what actually impacts customers. This guide will help you set up customer-centric KPIs that drive real improvements.

Map the Customer Journey

Start by mapping out how customers interact with your product, from first visit to final transaction. Each touchpoint is an opportunity to measure success.

Common Customer Journey Stages:

• Login/Access — Customers log in to use your product.
• Search — They look for information, products, or services.
• Add to Cart/Save — They add items to their cart or save them.
• Checkout — They complete a purchase.
• Payment — The payment is processed successfully.
• Post-Purchase — Customers modify or manage their orders.

Define What “Success” Looks Like

For each stage, define the ideal customer experience. What should happen when everything works smoothly?

• Login/Access — Customers log in without errors or delays.
• Search — Results appear quickly and accurately.
• Add to Cart — Items are added without issues.
• Checkout — A smooth process with no unexpected errors.
• Payment — Payments go through on the first attempt.
• Manage orders— Customers can amend or cancel easily.

Set KPIs for Each Stage

Now, choose the best KPIs to measure each step.

• Login Success Rate — Percentage of successful logins.
• Search Success Rate — Percentage of searches returning relevant results.
• Cart Abandonment Rate — Percentage of users who leave without checking out.
• Payment Success Rate — Percentage of transactions processed successfully.
• Order Management Success Rate — Percentage of changes successfully made by users.

Set Thresholds to Catch Issues Early

Define alert thresholds so problems are caught before they impact customers.

• Login success rate below 98% for 15 minutes? Investigate.
• Payment success rate below 97% for 30 minutes? Fix it fast.
• Order management success rate below 90%? Customers will get frustrated.

Monitor KPIs in Real Time

Use live dashboards and automated alerts to track KPIs. If something drops below the threshold, teams should act immediately.

• Set up real-time alerts for KPI drops.
• Use dashboards to visualize trends and spot problems.

Review & Adjust Regularly

Your KPIs should evolve as your business and customer expectations change.

• Monthly or quarterly reviews — Identify trends and adjust thresholds.
• Stakeholder feedback — Ensure KPIs align with business goals.
• Adjust priorities — Address recurring issues through product improvements.

Communicate KPI Performance Clearly

Make sure everyone in your team understands KPI performance and its impact on customers.

• Weekly/monthly reports — Share insights with key stakeholders.
• Incident reports — Provide post-mortems for significant KPI drops.
• Dashboard access — Ensure teams can track KPIs in real time.

KPIs Should Drive Customer Satisfaction, Not Just Internal Metrics

When defining KPIs, focus on what truly matters: the customer experience. Not all imperfections will drive customers away, but some failures can seriously damage trust.

• Acceptable issues — Small inconveniences customers can tolerate.
• Unacceptable issues — Problems that make customers leave for a competitor.

Setting customer-focused KPIs, monitoring real-time performance, and adapting based on insights, the organization can proactively improve the experience and stay ahead of issues.

Is your company tracking the right KPIs? Let me know in the comments!

Francisco Cobos

🐢 “Poc a Poc” (Little by Little)