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The top 9 marketing metrics you should be monitoring

7 mins read
by Nick Green
Last updated Wednesday, January 26, 2022

From revenue to customer lifetime value, track essential marketing metrics to optimise spending and boost your ROI effectively.

Marketing has evolved from an abstract art (if we’re being charitable) to a measurable science.

Now, with the help of technology, marketing metrics can help quantify the value of marketing investments, so you can see exactly what you should be spending money on and also where you can cut your spending back.

There are many simple solutions out there that can help you track key metrics like conversion rate, revenue and cost per lead. We’ve picked out our favourite nine that we think every professional should know. 

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Why are marketing metrics important?

Marketing metrics offer an effective, tangible way to monitor how many people are engaging with your company.

A study by Fournaise found that 80% of CEOs don’t fully trust their marketing departments’ efforts, while 91% have full confidence in their CFOs (Chief Financial Officers) and CIO (Chief Information Officers).

Using cold, hard statistics to quantify your efforts can demonstrate the value of great marketing and highlight any areas that are ripe for improvement.

1. Revenue

Revenue is arguably the most important thing any business needs to monitor, as it shows how much income you’re receiving. Depending on your business, you may have a stable monthly recurring revenue (MRR) from regular, repeat customers. Or you might find your income arrives in seasonal spurts.

Regardless, it’s important to keep sight of your revenue so you can tailor your marketing efforts accordingly. If revenue dips, you might consider investing more in adverts to bring new customers your way. And if it’s rising, it’s a clear sign your marketing strategy is paying off.

2. Customer Lifetime Value (CLTV)

Each customer’s lifetime value shows how much money they are likely to spend with your business during their lifetime. You’ll need a couple of statistics to work this number out. Here’s a quick guide to calculating the CLTV:

  1. Divide your company’s revenue in a set period (a year is the standard) by the number of purchases (i.e. fees paid to you by clients) made during this time. That’s your average purchase value.

  2. Divide the number of purchases by the number of unique customers. For example, your customers may have made 300 payments to you in a year, but there may only be 100 unique customers who are paying for repeat services. This is your average purchase frequency rate.

  3. Multiply the average purchase value by the average purchase frequency rate to get your customer value.

  4. Work out the average number of years a customer continues to buy your company’s services. This is your average customer lifespan.

  5. Finally, multiply the customer value by the average customer lifespan to get your customer lifetime value.

For professional advice this formula may not always work as well as for retail business, but the general principle is the same: identifying what the average client is worth to your business, and hence calculating the expenditure you can justify in acquiring new clients.

3. Customer Acquisition Cost

Customer Acquisition Cost (CAC) is how much you’ve spent in total on sales and marketing per client you won over a set period of time. This figure includes everything from advertising costs, in-house marketing staff salaries, and overheads like software licenses and licensed images.

To work out your CAC, you’ll need to divide your total sales and marketing spend by the number of new clients won during that period. If you spent £10,000 on sales and marketing in a month and won 10 new clients, your CAC would be £1,000.

4. Ratio of Customer Lifetime Value to CAC

You might also see this metric abbreviated to LTV:CAC and it’s most useful to businesses that have regular, repeat customers. It’s a way to see the value of your customer in comparison to how much you spent to win their business, or how good your return on investment (ROI) is.

Many marketing veterans say the ideal LTV:CAC ratio is 3:1, meaning your customer’s value is three times what you spent to acquire them. A low ratio means that you may be overspending on marketing and should explore more cost-effective ways to reach new customers.

However, higher is not always better either, as it could be a sign you’re not spending enough on marketing and limiting your customer acquisition.

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5. Churn Rate

Churn rate refers to the percentage of clients who don’t choose to purchase your services again. It’s a particularly handy metric for businesses with regular, repeat customers, as it can help you see how many people are coming back after their initial engagement.

This metric may be important to you if your business model relies on long-term client relationships rather than one-off high value services.

You can easily work out your churn rate using the following formula:

  • Pick at period of time in which you’re likely to have had returning clients. If you’re an IFA offering yearly client reviews, five years could be a good timeframe to start with.

  • Look at how many customers you had at the beginning, how many you’d won by the end and how many had ‘churned’ (not turned into a repeat customer) over this period.

  • Divide the ‘churned’ figure by the total number of customers you won.

  • Finally, multiply the number by 100 to get your churn rate percentage.

Feeling lost? Here’s an example:

  • Started with: 1,000 customers

  • Ended with: 1,500 customers

  • New customers acquired over the period: 600

  • (100 (churned customers) ÷ 600 (new customers) ) x 100% = 16% churn rate.

The lower the churn rate, the higher your customer retention rate is, meaning you’re getting a good return on the money you’re investing in winning new customers.

6. Conversion Rate

Conversion rate refers to the percentage of website visitors that go on to engage with your business in a more meaningful way.

This could mean purchasing a product or service or sending through an enquiry via your contact form. The higher your conversion rate, the more effective your marketing, content and web design strategies are.

7. Traffic

In the simplest terms, ‘traffic’ refers to the number of visitors to your website. To make the most of this core marketing metric, it’s important to analyse the traffic you’re getting in a bit more detail.

Different types of traffic include:

  • Direct traffic – Visits from direct URL type-ins

  • Campaign traffic – People who have come from adverts, email campaigns and other direct methods of advertising and marketing

  • Search traffic – Visits from search engines, both organic (unpaid) and paid

  • Referral traffic – Direct links from other websites that lead people to you

8. Engagement Metrics

As well as looking at the quantity of visitors, it’s useful to analyse the quality of your website’s traffic using a feature like Google Analytics.

Having thousands of visitors isn’t much good if most people click off without actually engaging with your brand. Some useful engagement metrics to keep an eye on include:

  • Bounce rate  – The percentage of people who click straight off your page without being converted

  • Time on page – Are people actually reading or looking at what you’re showing them?

  • Top exit pages – Which pages do people look at just before choosing to leave your website?

  • Pages per session – Are visitors exploring your website or just looking at the home page?

  • Unique visitors – How much of your traffic is repeat visitors and how many new eyes are looking at your page?

9. Customer Reviews/Ratings

Sites like Trustpilot have become notorious for their unfiltered reviews, but finding out what your customers honestly think can give you valuable insight. In the best-case scenario, you’ll have authentic and free marketing material that you can use to show potential customers your products/services are rated highly by real people.

If your reviews aren’t so glowing, you can use them as an opportunity to engage with unhappy customers and identify areas for improvement. Taking the time to apologise for sub-par service or engage with constructive comments could actually help you retain customers too, so it’s worth your time and effort.

An Unbiased plan comes with in-depth analytics and customer management tools as standard, so you can see at a glance how your marketing spend is translating into new business.

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Nick Green
Nick Green is a financial journalist writing for, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.