Metrics
Marketing metrics: what each one shows and how to count it
27 metrics we use to run growth, grouped by the stage of the funnel they measure. Each row gives the formula; the name opens a short page with an example and the mistakes that make the number lie.
01
Reach and awareness
How many of the right people saw you, and what that cost. These numbers say nothing about sales on their own; they explain why the lower stages have enough people to work with, or do not.
| Metric | What it shows | Formula |
|---|---|---|
| Cost per mille (CPM) | Cost per mille (CPM) is the price an advertiser pays for one thousand ad impressions, calculated as total media spend divided by impressions and multiplied by 1,000. | CPM = media spend / impressions × 1,000 |
| Share of voice (SOV) | Share of voice (SOV) is a brand's portion of all visibility in its category, measured as the brand's impressions, mentions or ad spend divided by the category total for the same channel and period. | SOV = brand's impressions (or mentions, or spend) / category total × 100% |
02
Traffic and acquisition
What it costs to bring a visitor, a lead and a paying customer. Compare channels on the cost of the last of the three, not the first.
| Metric | What it shows | Formula |
|---|---|---|
| Click-through rate (CTR) | Click-through rate (CTR) is the percentage of ad or search result impressions that turn into clicks, calculated as clicks divided by impressions. | CTR = clicks / impressions × 100% |
| Cost per click (CPC) | Cost per click (CPC) is the average amount an advertiser pays for one click on an ad, calculated as media spend divided by the number of clicks. | CPC = media spend / clicks |
| Cost per lead (CPL) | Cost per lead (CPL) is the marketing spend for a period divided by the number of leads generated in that period, where a lead is a contact that meets an agreed definition. | CPL = marketing spend / number of leads |
| Customer acquisition cost (CAC) | Customer acquisition cost (CAC) is the total sales and marketing spend for a period divided by the number of new paying customers won in that period. | CAC = sales and marketing spend / new paying customers |
| Return on ad spend (ROAS) | Return on ad spend (ROAS) is the revenue attributed to advertising divided by the cost of that advertising, usually shown as a ratio or a percentage. | ROAS = revenue attributed to ads / ad spend × 100% |
03
Conversion
The share of people who move from one stage to the next. A conversion rate means something only with the two stages named, for example visit to lead or call to booking.
| Metric | What it shows | Formula |
|---|---|---|
| Conversion rate | Conversion rate is the share of people who complete a defined target action, such as a purchase, a demo request or a sign-up, out of everyone who reached the step before it. | Conversion rate = target actions / people who reached the previous step × 100% |
| MQL to SQL conversion rate | MQL to SQL conversion rate is the share of marketing qualified leads that the sales team accepts as sales qualified leads, meaning worth an active sales conversation, within a given period. | MQL to SQL conversion = SQLs created from MQLs / MQLs in the same cohort × 100% |
| Call-to-booking rate | Call-to-booking rate is the share of inbound calls and requests to a clinic or service business that end with a booked appointment, out of all target requests received in the period. | Call-to-booking rate = booked appointments / target inbound calls and requests × 100% |
| Patient no-show rate | Patient no-show rate is the share of booked appointments in a period where the patient neither attended nor cancelled in advance, out of all appointments booked for that period. | No-show rate = appointments not attended without notice / appointments booked × 100% |
04
Activation and engagement
Whether new customers reach the first useful result and keep coming back. These are the earliest signals that retention will hold.
| Metric | What it shows | Formula |
|---|---|---|
| Activation rate | Activation rate is the share of new users or customers who reach the first value moment, an action the business defines as proof the product worked for them, within a set time after sign-up. | Activation rate = new users who reached the activation event within N days / new users × 100% |
| DAU/MAU ratio (stickiness) | DAU/MAU ratio, often called stickiness, is the average number of daily active users divided by the number of monthly active users for the same month, showing how many days a month a typical user comes back. | DAU/MAU = average daily active users in the month / monthly active users × 100% |
05
Retention and loyalty
How many customers stay, how much revenue they keep bringing, and whether they would recommend you. In a subscription or a clinic with repeat visits, this family decides profit.
| Metric | What it shows | Formula |
|---|---|---|
| Retention rate | Retention rate is the share of customers who were active at the start of a period and are still active at its end, counting only that starting group and ignoring anyone acquired during the period. | Retention rate = (customers at end of period − new customers in period) / customers at start × 100% |
| Churn rate | Churn rate is the share of customers active at the start of a period who stopped buying, cancelled or did not renew by the end of that period. | Churn rate = customers lost in period / customers at start of period × 100% |
| Net revenue retention (NRR) | Net revenue retention (NRR) is the recurring revenue a group of existing customers generates at the end of a period, including upgrades, downgrades and cancellations, as a percentage of what the same group generated at the start. | NRR = (starting MRR + expansion − contraction − churned MRR) / starting MRR × 100% |
| Net Promoter Score (NPS) | Net Promoter Score (NPS) is a loyalty measure built on one survey question, how likely a customer is to recommend you on a 0–10 scale, calculated as the share of promoters minus the share of detractors. | NPS = % promoters (scores 9–10) − % detractors (scores 0–6) |
| CSAT and CES | Satisfaction with one interaction (CSAT) and how easy it was to get the job done (CES), asked right after it. | CSAT = ratings of 4–5 / all ratings × 100% |
| Repeat purchase rate | Repeat purchase rate is the share of customers who bought at least twice within a defined period, out of all customers who bought at least once in that period. | Repeat purchase rate = customers with 2+ purchases in period / customers with 1+ purchase in period × 100% |
06
Revenue and unit economics
What a customer is worth, what they cost, and how fast the money comes back. These are the numbers a finance lead uses to decide whether to scale a channel.
| Metric | What it shows | Formula |
|---|---|---|
| Average order value (AOV) | Average order value (AOV) is the revenue from orders in a period divided by the number of orders placed in that period. | AOV = revenue from orders / number of orders |
| Average revenue per user (ARPU) | Average revenue per user (ARPU) is the revenue a business earns in a period divided by the average number of active users or customers in that period. | ARPU = revenue for the period / average number of active users |
| Customer lifetime value (LTV) | Customer lifetime value (LTV or CLV) is the gross margin a business expects to earn from one customer over the whole time that customer keeps buying. | LTV = average monthly revenue per customer × gross margin % / monthly churn rate |
| LTV to CAC ratio | The LTV to CAC ratio is customer lifetime value divided by customer acquisition cost, showing how many dollars of margin each dollar spent on winning a customer returns. | LTV:CAC = customer lifetime value / customer acquisition cost |
| CAC payback period | CAC payback period is the number of months it takes for the gross margin from a new customer to cover the cost of acquiring that customer. | CAC payback (months) = CAC / (monthly gross margin per customer) |
| Return on marketing investment (ROMI) | Return on marketing investment (ROMI) is the gross profit attributable to marketing minus the marketing cost, divided by that marketing cost. | ROMI = (attributable revenue × gross margin % − marketing cost) / marketing cost × 100% |
| Monthly recurring revenue (MRR) | Monthly recurring revenue (MRR) is the normalised monthly value of all active subscriptions, excluding one-off fees, at a given point in time. | MRR = sum of monthly subscription fees of all active paying customers |
| Contribution margin | What is left from revenue after variable costs, the money that pays for fixed costs and profit. | Contribution margin = revenue − variable costs |