# What is a KPI (key performance indicator)?

> What a KPI is, how to derive one from a business goal, formulas for a service company, a worked month of numbers and the traps to avoid when picking them.

Updated on October 15, 2026 · https://app.pilotiko.com/en/glossary/kpi

A KPI, or key performance indicator, is a quantitative or qualitative measure used to assess how well an organization is performing against its strategic objectives. That means a KPI always starts from a goal, and comes with a formula, a data source, a time period and a target, so everyone calculates it the same way.

## In short
- No goal, no KPI: a number without a target is just a statistic.
- Write down the formula, the data source and the period.
- Three to five KPIs is often plenty for a small service business.
- In French, the OQLF prefers indicateur clé de performance (ICP).

## Where does the term KPI come from?

The OQLF's terminology entry gives key performance indicator, KPI and critical performance indicator as the English terms, and defines the concept as an indicator constituting a quantitative or qualitative measure to be considered when evaluating an organization's performance against its strategic objectives [1].

In French, the preferred term is indicateur clé de performance (ICP), with indicateur clé de rendement also accepted. The entry notes that in management, performance and rendement are used interchangeably inside such compound terms [1]. That matters if you publish bilingual reports.

## How do you turn a goal into a KPI?

Because the definition ties the indicator to strategic objectives [1], the method follows naturally: write the goal, pick the measure that shows progress, then fix the formula, period and target.

1. **Write the goal** — "Keep our 6 technicians fully booked through November."
2. **Pick the measure** — Utilization rate: booked hours ÷ available hours.
3. **Set the source** — The shared calendar, not the dispatcher's memory.
4. **Set the period and target** — Weekly; target of 85%.
5. **Decide the action** — Below 75% two weeks running: follow up on pending [quotes](https://app.pilotiko.com/en/glossary/quote).

## Which KPIs suit a service business?

| KPI | Formula | Goal it serves |
|---|---|---|
| Quote win rate | Quotes accepted ÷ quotes sent | Sell more from the same number of requests |
| Utilization rate | Booked hours ÷ available hours | Use the crew's capacity |
| No-show rate | Missed appointments ÷ scheduled appointments | Cut wasted trips |
| Revenue per hour worked | Net revenue ÷ hours worked | Favour profitable services |
| Time to first response | Time from request to first reply | Keep customers who are in a hurry |

The win rate follows the same logic as Google Ads' conversion rate: conversions ÷ interactions, so 50 conversions from 1,000 interactions is 5% [3].

## What does calculating three KPIs look like for a real month?

**Estimate: a 6-technician pool maintenance company in Repentigny, June**

- Quotes sent / accepted : 60 / 21
- Quote win rate : 35%
- Available / booked hours (6 × 160 h) : 960 h / 792 h
- Utilization rate : 82.5%
- Appointments scheduled / missed : 310 / 12
- No-show rate : 3.9%
- **= Against targets of 30%, 85% and 3%, two of the three indicators call for action: utilization and no-shows.**

## How is a KPI different from an ordinary metric?

Every measure is a metric; only those tracking a strategic objective earn the word key. Website visits are a metric. The [conversion rate](https://app.pilotiko.com/en/glossary/conversion-rate) from visits to quote requests can become a KPI if this year's goal is more online requests.

KPIs live on a [dashboard](https://app.pilotiko.com/en/glossary/dashboard), which the OQLF describes as a visual display of the indicators executives need to follow activity and decide quickly [2]. [Revenue](https://app.pilotiko.com/en/glossary/revenue) alone rarely makes a good KPI; it gets more useful per hour, per customer or against the same period last year.

## What mistakes do businesses make choosing KPIs?

- Picking what's easy to measure instead of what matters.
- Tracking 20 KPIs, at which point none of them is key.
- Not writing the formula, so two people calculate the same [no-show rate](https://app.pilotiko.com/en/glossary/no-show-rate) two different ways.
- Setting a target with no planned action when it's missed.
- Rewarding a single KPI: a technician paid per call will rush repairs.

## Does Pilotiko track key indicators?

Yes, for what it manages. Pilotiko's virtual office shows key figures from your real data, and its internal reports cover bookings, revenue, workload and indicators per room. What Pilotiko doesn't see, such as your accounting costs or website traffic, isn't there: Google Analytics isn't connected yet.

> Coming soon: Google Analytics in reports.

## Frequently asked questions

### What does KPI stand for?

Key performance indicator. The OQLF also lists critical performance indicator as an English variant, and indicateur clé de performance (ICP) as the French term.

### How many KPIs should a small business track?

There's no official number. For a [small service business](https://app.pilotiko.com/en/glossary/sme), three to five KPIs tied to this year's goals are easy to follow. Beyond that, the ones that matter get lost.

### What's the difference between a KPI and a goal?

The goal says where you want to go, such as 85% utilization in November. The KPI is the measure that shows whether you're getting there, here the utilization rate calculated weekly.

### Can a KPI be qualitative?

Yes. The OQLF definition explicitly covers quantitative or qualitative measures. Customer satisfaction, for example, can serve as an indicator as long as it's measured the same way every time.

### How often should KPIs be reviewed?

Look at the values as often as the decisions they support: weekly for utilization, monthly for win rate. Revisit the list itself when goals change, often once a year.

## Sources

1. Office québécois de la langue française (Vitrine linguistique), « indicateur clé de performance (GDT) », https://vitrinelinguistique.oqlf.gouv.qc.ca/fiche-gdt/fiche/8350303/indicateur-cle-de-performance (accessed on 2026-10-15)
2. Office québécois de la langue française (Vitrine linguistique), « tableau de bord (GDT) », https://vitrinelinguistique.oqlf.gouv.qc.ca/fiche-gdt/fiche/8365450/tableau-de-bord (accessed on 2026-10-15)
3. Aide Google Ads, « Conversion rate: Definition », https://support.google.com/google-ads/answer/2684489 (accessed on 2026-10-15)