Whats the difference between a goal, target, and key performance indicator (KPI)?

Explaining the difference between goals, targets, and KPI’s to your employees.

If someone had explained to me, the difference between a goal, target, and key performance indicator (KPI), when I was a young hairdresser, it would have saved me a lot of time and stress trying to build a client base!

I’m sure I’m not the only person who used to lump these three terms into one category, thinking they all meant the same thing. I referred to them all as "targets". However, when I began seeing them as distinct but connected elements, it was a lightbulb moment! Now, I share this explanation in my one-on-one work with salon owners and managers. Today, I’ll share it with you - it might just transform your way of thinking too.
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Goals: Your big ambition

Your goal is your main ambition or primary objective. Most of your actions should focus on achieving it.

For example, if your goal is to buy a new car, the first step is identifying what needs to happen to make that a reality. In this case, you’d need additional income to afford the car. Your goal is clear: “I want to buy a car.”

Once you’ve clarified your goal, it’s time to break it into actionable steps.

Defining your goals and what you need to do to achieve them

Targets: The stepping stones

Targets are the milestones that bring you closer to achieving your goal.

Let’s say you need a down payment for the car and enough income to afford monthly lease payments. You calculate the exact amount you need to save each month. These savings become your financial target. Once you’ve saved the deposit, the surplus income can go toward your lease payments.

To reach your target efficiently, focus on specific behaviours or actions that directly contribute to generating more income - these behaviours are where Key Performance Indicators (KPI’s) come in.

toy car climbing over stacks of coins, repesenting target stepping stones

KPIs: The elements you measure to reach your targets faster!

As a hairstylist, barber, or beauty professional, increasing your income often comes down to improving specific skills or behaviours. These measurable behaviours are your KPIs.

KPIs are specific metrics that track your performance and guide your actions toward achieving your targets. They help answer how you’ll achieve your target.

For example, if your goal is to buy a car, and your target is to earn more income, a KPI might measure:

  • The number of clients you serve each week.
  • The average bill per client.
  • The percentage of clients booking high-value services.
  • Your client retention rates over a specific period.

Without measuring KPIs, you might know what you need to earn but not how to achieve it. Let’s explore some common salon-related KPIs:

  • Clients per week: The number of client appointments you sell per week.
  • Average bill value: The average spend per client.
  • High-value services: The percentage of clients opting for premium services.
  • Rebooking rates: The percentage of clients who rebook before leaving.
  • New client retention: How many first-time clients return within 90 days.
  • Client referrals: How many new clients come from existing client recommendations.
  • Google reviews: Positive online feedback that builds your reputation.

Improving some or all of these metrics can dramatically boost your sales and help you achieve your targets faster. For example, increasing your rebooking rate from 60% to 70% could significantly reduce the number of new clients you need to see each week to hit your targets.

Two people looking at KPIs on laptop screen

Benchmarks: Setting your standards

While KPIs help you monitor performance, benchmarking lets you define your ideal standards and pace.

For example, you might decide that seeing six clients a day is the perfect balance for you. If your daily revenue target is £400, you can divide it by six to determine your average bill target: £66.67 per client.

Benchmarking doesn’t drive sales directly like KPIs, but it helps break your targets into manageable, bite-sized pieces.

The Big Picture

It’s essential to remember that your goal remains the ultimate focus. KPIs and targets are tools to help you get there - they aren’t the goal themselves.

In our example, your goal is buying a car. Your targets and KPIs help you measure and improve your progress. If you’re consistently falling short on KPIs like rebooking or average bill value, it will take longer, or might even prevent you from reaching your goal.

By focusing on actionable steps, monitoring KPIs, and using benchmarks to guide you, you’ll stay on track and achieve your goals faster and with greater confidence.

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For a free demo of Loop HR Book a call with me, Ian Egerton, using this link.

Ian Egerton

Founder, Loop HR