Qualitative and Quantitative KPIs - What’s the Difference in 2023?
In this article, we define what quantitative and qualitative KPIs are and discuss the main differences between them. We then apply these to examples from different industries.
What is a Qualitative KPI?
Qualitative KPIs measure non-numerical data and are described as "descriptive" characteristics or subjective interpretations of a person's opinions. Qualitative KPIs are typically based on qualitative data and are not measured in numerical terms.
Qualitative KPI Examples
- Customer satisfaction levels: measured through surveys or feedback.
- Employee engagement: measured through surveys or feedback.
- Quality of customer service: measured through customer feedback or ratings.
- Brand perception: measures the way customers perceive your brand.
- Customer loyalty: measures the loyalty of your customers and their willingness to continue doing business with your company over time.
When Should You Use Qualitative KPIs?
- When measuring subjective or descriptive characteristics, such as customer or employee satisfaction
- When looking for insights into customer or employee experiences and perceptions
- When measuring the effectiveness of communication or engagement strategies
- When measuring perceptions of brand reputation or company culture
What is a Quantitative KPI?
Quantitative KPIs measure data in numerical terms, such as sales figures or website traffic. They are often used to track progress towards specific numerical targets, and are easily measurable and comparable over time. They provide a factual, data-based insight into the performance of a business or organization.
Quantitative KPI Examples
- Sales revenue: the total amount of money generated from sales of products or services over a specific period of time.
- Inventory turnover rate: measures how quickly a company is able to sell its inventory and restock.
- Cost per acquisition: measures the total cost required to acquire a new customer divided by the number of new customers acquired.
- Average order value: measures the average value of each customer order
When Should You Use Qualitative KPIs?
- When measuring measurable characteristics that can be expressed in numerical terms, such as sales or website traffic
- When measuring the efficiency or productivity of specific processes or departments
- When measuring financial performance, such as profitability or cost per acquisition
- When measuring performance against specific goals or benchmarks
Quantitative KPIs Vs. Qualitative KPIs
The table below gives a quick overview of the differences between the two types of KPIs.
Measure descriptive characteristics
Measure characteristics that are expressed in numerical terms
Based on qualitative data, such as feedback or surveys
Based on quantitative data, such as sales revenue or website traffic
Provide a subjective view
Provides an objective, data-based view of a business or organization's performance
Qualitative and Quantitative KPI Examples
Below we apply qualitative and quantitative kpis to 10 different industries so you can see clear examples of their differences.
Qualitative KPI: Patient Experience - Measure of how satisfied patients are with their care and experience in the facility.
Quantitative KPI: Hospital Readmission Rates - Measure of the number of patients who are readmitted to the hospital within a certain time period after discharge.
Qualitative KPI: Customer Loyalty - Measure of how likely customers are to purchase from a specific brand again.
Quantitative KPI: Sales Growth - Measure of the percentage increase or decrease in sales revenue over a specific time period.
Qualitative KPI: Guest Experience - Measure of how satisfied guests are with their stay at a hotel or resort.
Quantitative KPI: Occupancy Rate - Measure of the percentage of available rooms that are occupied during a specific time period.
Qualitative KPI: User Satisfaction - Measure of how satisfied users are with a specific product or service.
Quantitative KPI: Monthly Recurring Revenue (MRR) - Measure of the predictable monthly revenue generated by a business.
Qualitative KPI: Employee Morale - Measure of how satisfied employees are with their job and the company.
Quantitative KPI: Production Efficiency - Measure of how efficiently a company is producing goods, often measured by the number of units produced per hour or day.
Real Estate Industry:
Qualitative KPI: Tenant Retention - Measure of how likely tenants are to renew their lease.
Quantitative KPI: Net Operating Income (NOI) - Measure of a property's profitability, calculated by subtracting operating expenses from revenue.
Qualitative KPI: Customer Feedback - Measure of how satisfied customers are with a specific travel experience.
Quantitative KPI: Average Daily Rate (ADR) - Measure of the average rental income earned per occupied room per day.
Qualitative KPI: Menu Item Popularity - Measure of how popular specific menu items are among customers.
Quantitative KPI: Food Cost Percentage - Measure of the cost of food sold as a percentage of total food sales.
Qualitative KPI: Employee Engagement - Measure of how invested and enthusiastic employees are about their job and the company.
Quantitative KPI: Return on Equity (ROE) - Measure of how much profit a company generates in relation to the amount of equity invested in the business.
Qualitative KPI: Donor Satisfaction - Measure of how satisfied donors are with the organization's mission, programs, and communications.
Quantitative KPI: Fundraising Revenue - Measure of the amount of money raised through donations and fundraising efforts.
Can I Use Both Quantitative and Qualitative KPIs?
Using a combination of quantitative and qualitative KPIs is recommended for a more complete understanding of performance and to identify areas for improvement. Choosing relevant KPIs and regularly evaluating and adjusting them is important for effective measurement of progress.