Key Performance Indicators are units of measurement that help any type of organization measure progress toward specific goals. For instance, if my CEO wants me to increase the number of monthly donors to our nonprofit, then I might start off by measuring three things: (1) the number of new monthly donors; (2) the number of people who download an information packet about the benefits of becoming a monthly donor; (3) the number of new monthly donors who agree to tell five friends about their donation, etc. Essentially, the point is that you can identify KPIs that help you measure progress toward larger strategic goals.
One of the most important tools for measuring KPIs is Google Analytics. Google Analytics is a free tool that collects the same types of data for every website that uses it — it is up to you to identify which KPIs actually matter to you, and then you need to structure Google Analytics in order to measure them.