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Measurement and metrics

KPI (Key Performance Indicator)

Also called Key Performance Indicator, key metric, performance indicator, nøgletal.

Short answer

A KPI (Key Performance Indicator) is a metric a business or affiliate has chosen to steer by because it reflects a concrete goal. In affiliate marketing, the most common KPIs are EPC, conversion rate, approval rate, average order value and commission earned per month.

Definition of KPI (Key Performance Indicator).

A KPI is a measurement promoted to a management tool. What separates an ordinary number from a KPI is the decision behind it: a KPI has a target, an owner and a consequence. Clicks are a measurement; an EPC above DKK 2.50 by 1 December is a KPI. Without a target and follow-up, the number is just decoration on a dashboard.

Affiliates and stores steer by different KPIs. An affiliate typically tracks EPC, conversion rate, approval rate and commission earned per article or channel. A store with an affiliate program tracks the number of active affiliates, sales through the channel, average order value and the program's total cost percentage – commission plus fee measured against the revenue the channel generates.

KPIs are often split into leading and lagging indicators. Leading indicators such as clicks and CTR react immediately and signal what is coming; lagging indicators such as approved commission show the result once the approval window has passed. Steer only by lagging numbers and you discover problems weeks too late – steer only by leading ones and you risk celebrating clicks that never turn into money.

How it goes wrong

  • 01

    Too many KPIs

    15 numbers in a spreadsheet steer nothing. Choose 3–5 KPIs that are directly linked to earnings, and treat the rest as diagnostic numbers you look up when needed.

  • 02

    A KPI without a decision

    If nothing changes whether the number rises or falls, it is not a KPI. Every KPI needs an answer ready in advance: what do we do if it drops 20 %?

  • 03

    Clicks as the main KPI

    Clicks measure activity, not value. Two pages with the same number of clicks can earn very different amounts because their conversion rate and order value differ. EPC – commission per click – is closer to the money.

Frequently asked questions

What is the difference between a KPI and a metric?

All KPIs are metrics, but not the other way round. A metric becomes a KPI when it is tied to a target and a decision – for example, an EPC below DKK 2 triggering a review of link placements. Metrics describe; KPIs steer.

Which KPIs should I choose as a new affiliate?

Start with 3: clicks, which show whether traffic is coming through your links; EPC, which shows what a click is worth in commission; and approval rate, which shows what share of your sales gets approved. Together they reveal whether the problem lies in traffic, conversion or quality.

What does it mean that a KPI is lagging?

A lagging KPI shows the result after it has happened – approved commission can only be counted once the store's deadline for rejecting has passed. Leading KPIs such as clicks and CTR move first and are used as an early warning.

How often should I review my KPIs?

At the pace the number can actually move. Clicks and CTR can be read weekly, while approval rate and commission earned only make sense per month, because approvals take time. Reading slow numbers daily creates noise, not insight.

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