Sales Loves MarketingThe marketing KPIs that matter most connect what you spend to the revenue it brings in: revenue growth, cost per lead, customer acquisition cost, customer lifetime value, lead conversion rates, lead response time, monthly recurring revenue and marketing ROI. Track a handful of these against clear targets and you will know what to fund, fix or stop.
What is a marketing KPI?
A key performance indicator (KPI) is a measurable value that shows how well you are meeting a goal. A marketing KPI tracks a marketing goal, such as generating qualified leads, acquiring customers profitably or growing revenue.
KPIs are a small subset of your metrics. Clicks, likes and page views help you diagnose problems, but on their own they rarely tell you whether marketing is working. Choose KPIs that link to revenue, give each a target and review them on a fixed schedule.
1. Revenue and sales growth
Start with the revenue that marketing influences or generates, and how it changes over time.
Sales growth (%) = (revenue this period − revenue last period) ÷ revenue last period × 100
Compare like with like: this month against the same month last year if your business is seasonal. Use the trend to plan budgets and campaigns ahead of peaks. Our guide to the importance of sales forecasting covers how to project it.
In B2B, also track marketing-sourced pipeline: the value of open opportunities that started with a marketing touch. It shows impact months before deals close.
2. Cost per lead (CPL)
Cost per lead is what you spend to generate one lead.
CPL = total spend on a channel or campaign ÷ number of leads it generated
For a true cost, include more than ad spend:
- salaries or agency fees for the people running the campaign
- software, such as your CRM, marketing automation and ad tools
- content and design costs
- a share of overhead
Compare CPL by channel, but always alongside lead quality. A cheap lead that never buys is expensive.
3. Customer acquisition cost (CAC)
Customer acquisition cost is what it costs to win one new paying customer. It is sometimes written as COCA (cost of customer acquisition).
The simple version uses only marketing costs:
CAC = marketing costs to acquire new customers ÷ new customers acquired
The full version adds sales and marketing wages, software, outside services and overhead:
CAC = (marketing costs + wages + software + professional services + overhead) ÷ new customers acquired
Use the same period for costs and customers, and say which version you use. Our guides to customer acquisition cost and what CAC is go deeper.
4. Customer lifetime value (CLV or LTV)
Customer lifetime value estimates the profit a customer brings over the whole relationship. A simple version for subscription businesses:
CLV = (average monthly revenue per customer × gross margin) ÷ monthly churn rate
For example, a customer paying $200 a month at an 80% gross margin, with 2% monthly churn, has a CLV of (200 × 0.8) ÷ 0.02 = $8,000.
Raise CLV by reducing churn and growing revenue from existing customers through onboarding, support, upsells and regular, useful email. See our guide to managing customer churn and our email marketing strategies.
5. LTV to CAC ratio
Put the two together to see whether growth is profitable.
LTV:CAC = customer lifetime value ÷ customer acquisition cost
A commonly used rule of thumb:
- 1:1 or lower: you lose money on each customer
- around 3:1: a healthy balance
- well above 3:1: you may be under-investing in growth
6. Lead response time
Lead response time is the average time between a lead raising their hand and a salesperson contacting them. Hand-raising actions include:
- requesting a demo or a call back
- asking for a quote
- starting a trial
- downloading a high-intent asset, such as a pricing guide
Research by Oldroyd, McElheran and Elkington, published in Harvard Business Review in 2011, concluded that most companies were not responding to online leads nearly fast enough. Measure the time from form submission to first contact in your CRM, and set a target your team can meet. This KPI matters most for businesses that rely on inbound leads and quick follow-up. See why tracking leads is so important.
7. MQL to SQL conversion rate
Most B2B teams split leads into stages:
- Marketing qualified lead (MQL): a lead that meets marketing's criteria, such as fit with your target customer and enough engagement, but has not yet been accepted by sales.
- Sales qualified lead (SQL): a lead that sales has reviewed and accepted as ready for a sales conversation.
There is no universal definition. Each company sets its own criteria, often with lead scoring, which assigns each lead a score for fit and interest. Agree the definitions with sales and write them down.
MQL to SQL rate (%) = SQLs ÷ MQLs in the same period × 100
A low rate suggests marketing is passing on leads that are not ready, or that the two teams disagree on what "qualified" means. Our guide on aligning sales and marketing can help.
8. SQL to customer rate (win rate)
Win rate (%) = new customers ÷ SQLs in the same period × 100
This shows how well qualified leads turn into revenue. Look at it by rep, segment and lead source. A low rate for one source points to lead quality. A low rate for one rep points to a coaching need. For sales-side metrics, see our guide to SDR KPIs.
9. Monthly recurring revenue (MRR)
Monthly recurring revenue is the predictable revenue a subscription business expects each month. It excludes one-time payments such as setup fees.
MRR = number of paying customers × average monthly payment
For example, 300 customers paying $100 a month gives an MRR of $30,000. Track how it changes each month: new MRR from new customers, expansion from upgrades, and losses from downgrades and churn.
10. Marketing ROI
Marketing return on investment (ROMI) compares the profit marketing generates with what it costs.
ROMI = (revenue attributable to marketing × contribution margin − marketing spend) ÷ marketing spend
Two cautions:
- Use margin, not revenue. A campaign that brings in $10,000 of revenue at a 50% margin generates $5,000 of contribution, not $10,000.
- Look for incremental revenue. Attribution reports credit marketing for sales it touched, including sales that would have happened anyway. Holdout tests, where a random group does not see the campaign, give a truer picture.
Short-term ROI also misses brand effects that pay off later, so judge brand campaigns over a longer period. For ways to improve it, see how to increase ROI from your marketing campaigns.
How do you track marketing KPIs?
- Define your goals first, then choose three to five KPIs that show progress on them. Our guide to creating a marketing plan shows how goals and KPIs fit together.
- Set up tracking. In Google Analytics 4, mark the actions that matter, such as demo requests and sign-ups, as key events. Pass lead source and campaign data into your CRM so you can follow leads through to revenue.
- Agree definitions with sales, especially for MQL, SQL and which costs count.
- Build one dashboard with targets, and review it on a fixed schedule.
- Act on what you see. Move budget to channels with the best CAC and win rate, and fix the stage where leads drop out.
Frequently asked questions
What is a marketing KPI?
A marketing KPI (key performance indicator) is a measurable value that shows how well marketing is meeting a business goal, such as generating qualified leads, acquiring customers profitably or growing revenue. Good KPIs are tied to a goal, have a target and are reviewed regularly.
What is a good LTV to CAC ratio?
A commonly used benchmark is around 3:1, meaning a customer brings in about three times what it cost to acquire them. A ratio of 1:1 or lower means you are losing money on each customer. A much higher ratio can mean you are under-investing in growth.
How do you calculate marketing ROI?
A common formula is (revenue attributable to marketing × contribution margin − marketing spend) ÷ marketing spend. Use incremental revenue, the sales that would not have happened without the marketing, where you can measure it, because attributed revenue can include sales that would have happened anyway.
What is the difference between a KPI and a metric?
Every KPI is a metric, but not every metric is a KPI. A KPI is one of the few metrics you have chosen to judge progress on a goal. Metrics such as likes or page views are useful for diagnosis but are rarely KPIs on their own.