Marketing KPIs: 15 Metrics Every Business Should Track

Introduction

Marketing KPIs (Key Performance Indicators) are metrics that help you measure the success of your marketing efforts. However, with so many metrics available, it can be overwhelming to determine which KPIs actually matter for your business.

According to industry research, businesses that track the right marketing KPIs see average revenue improvements of 20-30%. However, many businesses struggle with KPIs because they're tracking too many metrics or focusing on the wrong ones.

This comprehensive guide covers 15 marketing KPIs that every business should track. Whether you're just getting started with marketing KPIs or looking to refine your existing measurement framework, this guide provides a practical framework you can implement immediately.

Understanding Marketing KPIs

What are Marketing KPIs?

Marketing KPIs (Key Performance Indicators) are metrics that help you measure the success of your marketing efforts. KPIs should directly relate to your business goals and provide actionable insights.

Characteristics of Good KPIs:

• Relevant: Directly relate to your business goals
• Measurable: Can be measured accurately
• Actionable: Provide insights that lead to actions
• Timely: Available on a regular basis
• Comparable: Can be compared over time or across segments

Why Marketing KPIs Matter

Marketing KPIs offer several compelling advantages:

Data-Driven Decisions: KPIs provide actual data about what works, not opinions or assumptions. This leads to more informed business decisions.

ROI Optimization: By identifying what actually drives revenue, KPIs help maximize return on investment from marketing efforts.

Resource Allocation: KPIs help you allocate resources to the most effective campaigns and channels.

Continuous Improvement: KPIs enable continuous optimization, creating a sustainable growth engine.

Accountability: KPIs provide accountability for marketing performance.

The Marketing KPI Challenge

Despite the benefits of marketing KPIs, many businesses struggle with them. Common challenges include:

• Too Many KPIs: Tracking too many KPIs makes it difficult to focus on what matters
• Wrong KPIs: Focusing on vanity metrics that don't impact business outcomes
• Lack of Context: KPIs without context don't provide actionable insights
• Not Setting Targets: Not setting targets makes it difficult to measure success
• Not Reviewing Regularly: Not reviewing KPIs regularly means missing optimization opportunities

The 15 Marketing KPIs Every Business Should Track

1. Customer Acquisition Cost (CAC)

What It Is: Customer Acquisition Cost (CAC) is the cost to acquire a new customer.

How to Calculate:

CAC = Total Marketing Costs / Number of New Customers Acquired

Example:

• Total marketing costs: $10,000
• New customers acquired: 100
• CAC: $10,000 / 100 = $100

Why It Matters:

CAC helps you understand how much it costs to acquire new customers. By tracking CAC, you can:

• Optimize Acquisition: Optimize customer acquisition to reduce costs
• Allocate Resources: Allocate resources to the most cost-effective channels
• Set Budgets: Set marketing budgets based on acquisition costs
• Measure Efficiency: Measure the efficiency of your marketing efforts

Best Practices:

• Track by Channel: Track CAC by marketing channel to identify the most cost-effective channels
• Track Over Time: Track CAC over time to identify trends
• Compare to CLV: Compare CAC to Customer Lifetime Value (CLV) to ensure profitability
• Set Targets: Set targets for CAC reduction

2. Customer Lifetime Value (CLV)

What It Is: Customer Lifetime Value (CLV) is the total value of a customer over their lifetime.

How to Calculate:

CLV = Average Order Value × Purchase Frequency × Customer Lifespan

Example:

• Average order value: $50
• Purchase frequency: 4 times per year
• Customer lifespan: 3 years
• CLV: $50 × 4 × 3 = $600

Why It Matters:

CLV helps you understand the long-term value of your customers. By tracking CLV, you can:

• Maximize Value: Maximize customer lifetime value through retention
• Optimize Acquisition: Optimize customer acquisition to focus on high-value customers
• Improve Profitability: Improve profitability by optimizing CAC to CLV ratio
• Measure Customer Health: Measure the health of your customer base

Best Practices:

• Track by Segment: Track CLV by customer segment to identify high-value segments
• Track Over Time: Track CLV over time to identify trends
• Compare to CAC: Compare CLV to CAC to ensure profitability (CLV should be 3x CAC or higher)
• Set Targets: Set targets for CLV improvement

3. CAC to CLV Ratio

What It Is: CAC to CLV ratio compares customer acquisition cost to customer lifetime value.

How to Calculate:

CAC to CLV Ratio = CLV / CAC

Example:

• CLV: $600
• CAC: $100
• CAC to CLV Ratio: $600 / $100 = 6:1

Why It Matters:

CAC to CLV ratio helps you understand the profitability of your customer acquisition. By tracking this ratio, you can:

• Ensure Profitability: Ensure that customer acquisition is profitable (ratio should be 3:1 or higher)
• Optimize Acquisition: Optimize customer acquisition to improve the ratio
• Measure Efficiency: Measure the efficiency of your marketing efforts
• Set Targets: Set targets for ratio improvement

Best Practices:

• Aim for 3:1 or Higher: Aim for a CAC to CLV ratio of 3:1 or higher
• Track by Channel: Track ratio by marketing channel to identify the most profitable channels
• Track Over Time: Track ratio over time to identify trends
• Set Targets: Set targets for ratio improvement

4. Return on Investment (ROI)

What It Is: Return on Investment (ROI) measures the return on marketing investment.

How to Calculate:

ROI = ((Revenue - Marketing Costs) / Marketing Costs) × 100

Example:

• Revenue: $50,000
• Marketing costs: $10,000
• ROI: (($50,000 - $10,000) / $10,000) × 100 = 400%

Why It Matters:

ROI helps you understand the financial impact of your marketing efforts. By tracking ROI, you can:

• Prove Value: Prove the value of marketing to stakeholders
• Allocate Resources: Allocate resources to the most effective campaigns
• Optimize Spending: Optimize marketing spending to maximize ROI
• Measure Success: Measure the success of marketing initiatives

Best Practices:

• Track by Campaign: Track ROI by marketing campaign to identify the most effective campaigns
• Track by Channel: Track ROI by marketing channel to identify the most effective channels
• Track Over Time: Track ROI over time to identify trends
• Set Targets: Set targets for ROI improvement

5. Return on Ad Spend (ROAS)

What It Is: Return on Ad Spend (ROAS) measures the return on advertising spend.

How to Calculate:

ROAS = Revenue from Ads / Advertising Spend

Example:

• Revenue from ads: $20,000
• Advertising spend: $5,000
• ROAS: $20,000 / $5,000 = 4:1

Why It Matters:

ROAS helps you understand the effectiveness of your advertising campaigns. By tracking ROAS, you can:

• Optimize Ad Spend: Optimize advertising spend to maximize ROAS
• Allocate Budget: Allocate advertising budget to the most effective campaigns
• Measure Efficiency: Measure the efficiency of your advertising efforts
• Set Targets: Set targets for ROAS improvement

Best Practices:

• Track by Campaign: Track ROAS by advertising campaign
• Track by Channel: Track ROAS by advertising channel
• Track Over Time: Track ROAS over time to identify trends
• Set Targets: Set targets for ROAS improvement (typically 4:1 or higher)

6. Conversion Rate

What It Is: Conversion rate is the percentage of visitors who convert (take a desired action).

How to Calculate:

Conversion Rate = (Number of Conversions / Number of Visitors) × 100

Example:

• Number of conversions: 100
• Number of visitors: 5,000
• Conversion Rate: (100 / 5,000) × 100 = 2%

Why It Matters:

Conversion rate helps you understand how effectively your website converts visitors into customers. By tracking conversion rate, you can:

• Optimize Conversion: Optimize conversion rates to improve results
• Identify Bottlenecks: Identify bottlenecks in the conversion funnel
• Improve ROI: Improve return on investment by increasing conversions
• Test and Iterate: Test different approaches to improve conversions

Best Practices:

• Track by Channel: Track conversion rate by marketing channel
• Track by Campaign: Track conversion rate by marketing campaign
• Track by Landing Page: Track conversion rate by landing page
• Track Over Time: Track conversion rate over time to identify trends
• Set Targets: Set targets for conversion rate improvement

7. Cost per Conversion (CPC)

What It Is: Cost per Conversion (CPC) is the cost to generate each conversion.

How to Calculate:

CPC = Total Marketing Costs / Number of Conversions

Example:

• Total marketing costs: $10,000
• Number of conversions: 100
• CPC: $10,000 / 100 = $100

Why It Matters:

CPC helps you understand the cost-effectiveness of your marketing efforts. By tracking CPC, you can:

• Optimize Costs: Optimize marketing costs to reduce CPC
• Allocate Resources: Allocate resources to the most cost-effective channels
• Set Budgets: Set marketing budgets based on conversion costs
• Measure Efficiency: Measure the efficiency of your marketing efforts

Best Practices:

• Track by Channel: Track CPC by marketing channel
• Track by Campaign: Track CPC by marketing campaign
• Track Over Time: Track CPC over time to identify trends
• Set Targets: Set targets for CPC reduction

8. Marketing Qualified Leads (MQLs)

What It Is: Marketing Qualified Leads (MQLs) are leads that marketing has qualified as ready for sales.

How to Calculate:

MQLs = Number of Leads That Meet Qualification Criteria

Example:

• Total leads: 1,000
• Qualified leads: 200
• MQLs: 200

Why It Matters:

MQLs help you understand the quality of leads generated by marketing. By tracking MQLs, you can:

• Measure Lead Quality: Measure the quality of leads generated by marketing
• Optimize Lead Generation: Optimize lead generation to increase MQLs
• Improve Sales Alignment: Improve alignment between marketing and sales
• Set Targets: Set targets for MQL generation

Best Practices:

• Define Qualification Criteria: Define clear qualification criteria for MQLs
• Track by Channel: Track MQLs by marketing channel
• Track by Campaign: Track MQLs by marketing campaign
• Track Over Time: Track MQLs over time to identify trends
• Set Targets: Set targets for MQL generation

9. Sales Qualified Leads (SQLs)

What It Is: Sales Qualified Leads (SQLs) are leads that sales has qualified as ready for sales engagement.

How to Calculate:

SQLs = Number of MQLs That Sales Has Qualified

Example:

• MQLs: 200
• SQLs: 50
• MQL to SQL Conversion Rate: (50 / 200) × 100 = 25%

Why It Matters:

SQLs help you understand the quality of leads that sales is engaging with. By tracking SQLs, you can:

• Measure Sales Readiness: Measure how ready leads are for sales engagement
• Optimize Lead Quality: Optimize lead quality to increase SQLs
• Improve Sales Alignment: Improve alignment between marketing and sales
• Set Targets: Set targets for SQL generation

Best Practices:

• Define Qualification Criteria: Define clear qualification criteria for SQLs
• Track MQL to SQL Rate: Track MQL to SQL conversion rate
• Track by Channel: Track SQLs by marketing channel
• Track Over Time: Track SQLs over time to identify trends
• Set Targets: Set targets for SQL generation

10. Lead to Customer Conversion Rate

What It Is: Lead to customer conversion rate is the percentage of leads that become customers.

How to Calculate:

Lead to Customer Conversion Rate = (Number of Customers / Number of Leads) × 100

Example:

• Number of customers: 50
• Number of leads: 1,000
• Lead to Customer Conversion Rate: (50 / 1,000) × 100 = 5%

Why It Matters:

Lead to customer conversion rate helps you understand how effectively you convert leads into customers. By tracking this rate, you can:

• Optimize Conversion: Optimize lead to customer conversion to improve results
• Identify Bottlenecks: Identify bottlenecks in the sales funnel
• Improve ROI: Improve return on investment by increasing conversions
• Set Targets: Set targets for conversion rate improvement

Best Practices:

• Track by Channel: Track conversion rate by marketing channel
• Track by Campaign: Track conversion rate by marketing campaign
• Track Over Time: Track conversion rate over time to identify trends
• Set Targets: Set targets for conversion rate improvement

11. Marketing Revenue

What It Is: Marketing revenue is the total revenue attributed to marketing efforts.

How to Calculate:

Marketing Revenue = Total Revenue from Marketing-Generated Customers

Example:

• Total revenue: $100,000
• Revenue from marketing: $60,000
• Marketing Revenue: $60,000

Why It Matters:

Marketing revenue helps you understand the financial impact of your marketing efforts. By tracking marketing revenue, you can:

• Prove ROI: Prove the return on investment from marketing
• Allocate Resources: Allocate resources to the most effective channels
• Set Targets: Set revenue targets for marketing efforts
• Measure Success: Measure the success of marketing initiatives

Best Practices:

• Track by Channel: Track marketing revenue by marketing channel
• Track by Campaign: Track marketing revenue by marketing campaign
• Track Over Time: Track marketing revenue over time to identify trends
• Set Targets: Set targets for marketing revenue growth

12. Website Traffic

What It Is: Website traffic is the number of visitors to your website.

How to Calculate:

Website Traffic = Total Number of Visitors to Your Website

Example:

• Total visitors: 10,000
• Website Traffic: 10,000

Why It Matters:

Website traffic helps you understand how many visitors your website is attracting. By tracking website traffic, you can:

• Measure Awareness: Measure brand awareness and visibility
• Identify Trends: Identify trends in visitor behavior
• Optimize Channels: Optimize marketing channels based on traffic
• Set Targets: Set targets for traffic growth

Best Practices:

• Track by Channel: Track website traffic by marketing channel
• Track by Campaign: Track website traffic by marketing campaign
• Track Over Time: Track website traffic over time to identify trends
• Set Targets: Set targets for traffic growth

13. Cost per Click (CPC)

What It Is: Cost per Click (CPC) is the cost to generate each click on your ads.

How to Calculate:

CPC = Total Advertising Spend / Number of Clicks

Example:

• Total advertising spend: $5,000
• Number of clicks: 1,000
• CPC: $5,000 / 1,000 = $5

Why It Matters:

CPC helps you understand the cost-effectiveness of your advertising campaigns. By tracking CPC, you can:

• Optimize Ad Spend: Optimize advertising spend to reduce CPC
• Allocate Budget: Allocate advertising budget to the most cost-effective campaigns
• Set Budgets: Set advertising budgets based on click costs
• Measure Efficiency: Measure the efficiency of your advertising efforts

Best Practices:

• Track by Campaign: Track CPC by advertising campaign
• Track by Channel: Track CPC by advertising channel
• Track Over Time: Track CPC over time to identify trends
• Set Targets: Set targets for CPC reduction

14. Click-Through Rate (CTR)

What It Is: Click-Through Rate (CTR) is the percentage of people who click on your ads or links.

How to Calculate:

CTR = (Number of Clicks / Number of Impressions) × 100

Example:

• Number of clicks: 100
• Number of impressions: 5,000
• CTR: (100 / 5,000) × 100 = 2%

Why It Matters:

CTR helps you understand how effectively your ads or links attract clicks. By tracking CTR, you can:

• Optimize Ads: Optimize ads to increase CTR
• Improve Relevance: Improve ad relevance to increase CTR
• Measure Effectiveness: Measure the effectiveness of your advertising efforts
• Set Targets: Set targets for CTR improvement

Best Practices:

• Track by Campaign: Track CTR by advertising campaign
• Track by Channel: Track CTR by advertising channel
• Track Over Time: Track CTR over time to identify trends
• Set Targets: Set targets for CTR improvement (typically 2% or higher)

15. Customer Retention Rate

What It Is: Customer retention rate is the percentage of customers who remain customers over time.

How to Calculate:

Customer Retention Rate = ((Customers at End of Period - New Customers) / Customers at Start of Period) × 100

Example:

• Customers at start of period: 1,000
• New customers: 200
• Customers at end of period: 1,100
• Customer Retention Rate: ((1,100 - 200) / 1,000) × 100 = 90%

Why It Matters:

Customer retention rate helps you understand how effectively you retain customers. By tracking retention rate, you can:

• Maximize Lifetime Value: Maximize customer lifetime value through retention
• Reduce Churn: Reduce customer churn to improve retention
• Improve Profitability: Improve profitability by retaining customers
• Set Targets: Set targets for retention rate improvement

Best Practices:

• Track by Segment: Track retention rate by customer segment
• Track Over Time: Track retention rate over time to identify trends
• Compare to Industry: Compare retention rate to industry benchmarks
• Set Targets: Set targets for retention rate improvement (typically 80% or higher)

Marketing KPI Best Practices

1. Focus on Primary KPIs

Focus on KPIs that directly relate to your business goals. Don't get distracted by vanity metrics that don't impact business outcomes.

Best Practices:

• Start with Business Goals: Choose KPIs that directly relate to your business goals
• Prioritize Revenue KPIs: Prioritize KPIs that directly impact revenue
• Use Secondary KPIs for Context: Use secondary KPIs to understand why primary KPIs are changing
• Avoid Vanity Metrics: Don't focus on KPIs that don't impact business outcomes

2. Use a Balanced Scorecard

Use a balanced scorecard that includes KPIs from different categories (revenue, customer, conversion, engagement).

Best Practices:

• Include Multiple Categories: Include KPIs from revenue, customer, conversion, and engagement categories
• Balance Leading and Lagging Indicators: Balance leading indicators (predictive) with lagging indicators (outcome-based)
• Set Targets: Set targets for each KPI category
• Review Regularly: Review the balanced scorecard regularly

3. Set Targets

Set targets for each KPI to measure success and identify improvement opportunities.

Best Practices:

• Set Specific Targets: Set specific, measurable targets for each KPI
• Make Targets Realistic: Make targets realistic but challenging
• Review Targets Regularly: Review targets regularly and adjust as needed
• Track Progress: Track progress toward targets

4. Track Trends Over Time

Track trends over time to understand how performance is changing, not just point-in-time data.

Best Practices:

• Compare Periods: Compare current performance to previous periods
• Identify Trends: Look for trends over time, not just point-in-time data
• Seasonal Adjustments: Account for seasonal variations in performance
• Forecast Future Performance: Use trends to forecast future performance

5. Segment Your Data

Segment your data by channel, campaign, audience, device, etc., to get more granular insights.

Best Practices:

• Segment by Channel: Analyze performance by marketing channel
• Segment by Campaign: Analyze performance by marketing campaign
• Segment by Audience: Analyze performance by audience segment
• Segment by Device: Analyze performance by device type
• Compare Segments: Compare segments to identify opportunities

Common Marketing KPI Mistakes to Avoid

1. Tracking Too Many KPIs

Tracking too many KPIs makes it difficult to focus on what matters. Focus on KPIs that directly relate to your business goals.

How to Avoid:

• Start with Business Goals: Choose KPIs that directly relate to your business goals
• Prioritize KPIs: Focus on KPIs that have the most impact
• Limit KPIs: Limit the number of KPIs you track (typically 5-10 key KPIs)
• Review Regularly: Regularly review and refine your KPIs

2. Focusing on Vanity Metrics

Focusing on vanity metrics that don't impact business outcomes wastes time and resources.

How to Avoid:

• Focus on Primary KPIs: Focus on KPIs that directly impact revenue
• Avoid Vanity Metrics: Don't focus on KPIs like page views, follower count, etc.
• Use Secondary KPIs for Context: Use secondary KPIs to understand why primary KPIs are changing
• Test KPIs: Test whether KPIs actually impact business outcomes

3. Not Setting Targets

Not setting targets makes it difficult to measure success and identify improvement opportunities.

How to Avoid:

• Set Targets: Set targets for each key KPI
• Make Targets Specific: Make targets specific and measurable
• Review Targets Regularly: Review targets regularly and adjust as needed
• Track Progress: Track progress toward targets

4. Ignoring Context

Ignoring context makes it difficult to understand why KPIs are changing and what actions to take.

How to Avoid:

• Provide Context: Provide context for KPIs (why they're important, what they mean)
• Compare Periods: Compare current performance to previous periods
• Segment Data: Segment data to understand performance by channel, campaign, etc.
• Ask Why: Always ask why KPIs are changing, not just what changed

5. Not Reviewing Regularly

Not reviewing KPIs regularly means missing optimization opportunities.

How to Avoid:

• Set Up Regular Reviews: Set up regular reviews (weekly, monthly, quarterly)
• Identify Trends: Look for trends over time
• Compare Periods: Compare current performance to previous periods
• Segment Data: Segment data by channel, campaign, audience, etc.
• Make Data Actionable: Use insights to make data-driven decisions

Measuring Marketing KPI Performance

The Marketing Funnel

Understanding the marketing funnel helps you measure KPI performance at each stage.

Marketing Funnel Stages:

1. Awareness: Visitors become aware of your brand
2. Interest: Visitors show interest in your products or services
3. Consideration: Visitors consider your products or services
4. Purchase: Visitors make a purchase
5. Retention: Customers remain customers over time

KPIs for Each Stage:

• Awareness: Website traffic, impressions, reach
• Interest: Engagement, time on site, pages per session
• Consideration: Lead generation, MQLs, email signups
• Purchase: Conversion rate, revenue, ROI
• Retention: Customer retention rate, repeat purchase rate

Attribution Modeling

Attribution modeling helps you understand which marketing touchpoints contribute to conversions.

Attribution Models:

• First-Touch Attribution: Credit for conversion goes to first marketing touchpoint
• Last-Touch Attribution: Credit for conversion goes to last marketing touchpoint
• Multi-Touch Attribution: Credit for conversion is distributed across multiple touchpoints
• Time-Decay Attribution: Credit for conversion is distributed based on time to conversion
• Position-Based Attribution: Credit for conversion is distributed based on position in customer journey

How to Choose an Attribution Model:

• Understand Customer Journey: Understand your customer journey from first touch to conversion
• Test Different Models: Test different attribution models to see which provides the most accurate insights
• Use Multiple Models: Use multiple attribution models to get a complete picture
• Review Regularly: Review attribution models regularly and adjust as needed

Tools for Marketing KPI Tracking

Analytics Platforms

Google Analytics 4:

• Free: Comprehensive web analytics
• Features: Traffic analysis, conversion tracking, audience insights
• Best For: Small to medium businesses

Adobe Analytics:

• Enterprise: Enterprise-level analytics platform
• Features: Advanced analytics, real-time data, custom dashboards
• Best For: Large enterprises

Mixpanel:

• Product Analytics: Product analytics focused on user behavior
• Features: Event tracking, funnel analysis, cohort analysis
• Best For: Product-focused businesses

Marketing Analytics Platforms

HubSpot:

• Marketing Analytics: Marketing analytics and CRM
• Features: Campaign tracking, lead attribution, revenue reporting
• Best For: B2B businesses

Marketo:

• Marketing Automation: Marketing automation and analytics
• Features: Campaign analytics, lead scoring, revenue attribution
• Best For: Enterprise B2B businesses

Salesforce Marketing Cloud:

• Enterprise Marketing: Enterprise marketing analytics
• Features: Campaign analytics, customer journey analytics, revenue attribution
• Best For: Large enterprises

Dashboard Tools

Google Data Studio:

• Free: Free dashboard and reporting tool
• Features: Custom dashboards, data visualization, report sharing
• Best For: Small to medium businesses

Tableau:

• Enterprise: Enterprise-level dashboard and reporting tool
• Features: Advanced data visualization, custom dashboards, data integration
• Best For: Large enterprises

Databox:

• Marketing Dashboards: Marketing dashboard and reporting tool
• Features: Custom dashboards, KPI tracking, report automation
• Best For: Marketing teams

Conclusion

Marketing KPIs are essential for measuring the success of your marketing efforts and making data-driven decisions. By focusing on the 15 KPIs outlined in this guide, you can significantly improve your marketing performance.

Remember that marketing KPIs are an ongoing process, not a one-time project. The businesses that see the best results are those that commit to continuous measurement and improvement.

Start with the fundamentals: focus on primary KPIs that directly relate to your business goals, set targets, track trends over time, segment your data, and review regularly. As you build momentum, incorporate more advanced techniques like attribution modeling and predictive analytics.

Most importantly, let data guide your decisions. What works for one business may not work for another. By systematically tracking your marketing KPIs and testing your changes, you'll discover the strategies that work best for your unique audience and business goals.

The journey to better marketing performance through KPIs begins with a single metric. Start tracking what actually matters today, and you'll be amazed at how small, data-driven improvements can compound into significant business growth over time.