Introduction: Why SMART KPIs Make a Difference
Strong KPIs start with the right formulation. By using the SMART method, you increase the chance that your KPIs are realistic, concrete and useful in practice. The SMART method stands for: Specific, Measurable, Acceptable, Realistic and Timely. In this article, we'll dive deeper into each section and show you how to apply this method to your own KPI development.
Specific: avoid vague objectives
A good KPI is Specific. Avoid descriptions such as “increasing customer satisfaction”. Better: “Increase customer satisfaction score from 78 to 85 by Q4 2025". This way, everyone involved knows exactly what they are working towards.
Measurable: make performance verifiable
Measurability is essential to monitor progress. Think of: “average delivery time = sum of delivery times/number of deliveries”. Without a clear formula and data source, the KPI is worthless.
Acceptable: creating support from the team
Involve teams in setting KPIs. By defining goals together, you increase ownership and motivation to achieve them effectively. A KPI that is imposed without context is rarely followed up properly.
Realistic: challenge without overquestioning
A KPI must be ambitious, but not unattainable. Use historical data as a reference to formulate new goals. Aiming too high causes frustration, too low causes inertia.
Time-related: give each KPI a deadline
Make goals time-bound. Not “improve in the future”, but “within six months”, “by the end of Q2” or “follow up monthly”. This way, the KPI becomes part of the daily operations and planning cycle.
Work with a SMART template for consistency
Use a template where you name the Smart components for each KPI. Include: the exact wording, the data source, the unit of measurement, the person responsible and the evaluation frequency. This makes follow-up transparent.
Example: sales KPI for an SME
A SMART KPI might look like this: “Increase the number of B2B deals closed from 12 to 20 per month by December 2025, measured by CRM reports, with the sales manager in charge”. This KPI is concrete, ambitious but achievable, and easily controllable.
Setting up KPIs together: methods and tools
It is best to formulate KPIs in workshops. Use brown-paper sessions, sticky notes, or tools like Miro or MURAL to build goals in groups. Use the question “is this really SMART?” as a review framework for each proposed KPI.
Common mistakes with SMART KPIs
• KPIs without a clear data definition
• No time limit or accountability
• KPIs that are too complex or technical
• KPIs that are not linked to a business goal
From SMART KPI to dashboard
Have you formulated a list of SMART KPIs? Then the next step is to visualize them in a dashboard. To do so, read the article KPI Dashboard: The Complete Guide
Do you want to know how you can also report your KPIs efficiently in Excel?
For KPIs in a financial context.
For KPIs applied in existing dashboards, discover the InsightData apps.