How to Define KPIs That Actually Matter: A Guide to Stop Measuring Just for the Sake of It

/ Productivity, Blog / By

Strategic Fleet Control: The tool to honor contracts, increase trust and optimize your operations.

72% of teams track KPIs they never use for decisions (Gartner). Why? They confuse metrics with key indicators. Here’s how to choose KPIs that drive real actions in fleet management, contracts, or sales.

1. What Makes a KPI Truly Strategic?

Definition:
A KPI (Key Performance Indicator) must:
✅ Be tied to critical business goals (e.g., profitability, contract compliance).
✅ Be actionable (you know what to do if it changes).
✅ Have a relevant measurement frequency (daily, weekly, monthly).

Example of Weak vs. Strategic KPI:

  • Weak: “Number of vehicles in fleet” (no decision value).
  • Strategic: “% of vehicles idle due to maintenance” (if >15%, audit parts supplier).

2. The 4 Filters for Choosing Relevant KPIs

Filter 1: Alignment with Goals

  • Question: “Does this KPI help achieve our annual targets?”
  • Example:
    • Goal: Reduce fleet costs by 10%.
    • KPI: “Cost per kilometer” (not “total kilometers”).

Filter 2: Actionability

  • Question: “Can we change this metric with concrete decisions?”
  • Example:
    • Actionable KPI: “% of routes with unnecessary detours” (optimize with GPS).
    • Non-actionable: “Average national fuel price”.

Filter 3: Industry Context

  • Logistics: “% of damaged deliveries”.
  • Services: “Incident response time”.
  • B2B Sales: “% of contract compliance per client”.

Filter 4: Simplicity

  • Rule: “If you can’t explain it in 10 seconds, it’s too complex”.
  • Example:
    • Complex: “Weather-adjusted vehicle efficiency index”.
    • Simple: *”Liters of fuel/100 km”*.

3. Practical Case: KPIs for Contract Management

Problem: A security company couldn’t track if patrols met agreed rounds.

Solution: They implemented 3 KPIs:

  1. “% of rounds completed vs. agreed” (target: >95%).
  2. “Average time between rounds” (alert if >30 mins).
  3. “Operational cost per round hour” (to optimize resources).

Result: 20% operational cost reduction in 4 months.

4. Common Mistakes and How to Avoid Them

❌ Vanity metrics: Measuring what’s easy (e.g., “N° of reports generated”) vs. what matters (“% of reports used for decisions”).
❌ Overload: >10 KPIs per team (the human brain retains only 5-7).
❌ Static KPIs: Not reviewing them quarterly to align with new priorities.