When it comes to focus, goals and alignment, it can be pretty tough to ensure that everyone is on the same page. But don't worry, that's where a KPI Tree 🌳 comes in!
This very simple (yet powerful) tool can also help you navigate KPIs and metrics, allowing you to focus on areas where you can truly deliver impact ✨
In this article, we will explain everything about KPI Trees and provide a guide on how to build one for your own team 👌
🤓 Table of Content
Simply put, a KPI Tree is a visual representation of the Key Performance Indicators (KPI) and metrics that are important to your organization.
It's a hierarchical structure that begins with an important metric at the top and then breaks down into more specific metrics as you go down the tree.
Let's jump into an example:
Imagine a product where users can subscribe to different content creators (like Patreon, Substack or MYM). The total number of Subscribers or 🧑🏼🤝🧑🏾 # Subscribers (= users having at least one ongoing paid subscription) is an important KPI, that we can break down into more metrics:
1️⃣ In the simple example above, we start with the 🧑🏼🤝🧑🏾 # Subscribers (= total number of subscribers) KPI. As we go down, we split it like a math equation:
# Subscribers = # MAU * % Subscription Rate
2️⃣ Then we can continue and focus on one of the KPI below. For example, we’ll look at the Monthly Active Users or 👀 # MAU which us a super important metric, and split it further.
One way to split MAU can be:
Once again we can outline a math equation: