Your marketing report says you’re crushing it. More clicks. More impressions. Lower cost-per-click.
So why isn’t your business growing?
This is the frustration I hear from business owners all the time. They’re convinced their marketing is working because the numbers look good. But here’s the truth: most marketing metrics are misleading.
More clicks don’t mean more customers. Lower cost-per-click doesn’t mean higher profits. A high return on ad spend doesn’t guarantee a sustainable business.
Yet, this is how most businesses measure success – by tracking vanity metrics instead of revenue.
I’ve seen this firsthand. A real-estate client came to us after spending US$115,050.65 on ads. Their reports looked great – high engagement, low CPC, strong lead volume. The result? Four leads. That’s US$28,762.66 per lead.
This wasn’t an ad spend problem. It was a tracking problem. They were celebrating the wrong numbers while bleeding cash on campaigns that weren’t actually bringing in buyers. Once we fixed their tracking, everything changed. In just 30 days, their cost per lead dropped to $460.97 – a 98 per cent reduction.
They didn’t need more marketing. They needed better data.
| Pro Tip: Are you struggling to track these numbers? If you don’t have a CRM or marketing analytics tool in place, you’re likely missing out on critical insights. Free or low-cost tools like HubSpot, Zoho CRM or Google Analytics 4 can help small businesses move beyond spreadsheets and start capturing data that drives real decisions. But if you’re more comfortable with spreadsheets, no worries. I built a Lead Generation Funnel Analysis template that lets you simply plug in your information – and then watch as it generates the insights you need. The template breaks down every key metric with clear indicators so you know at a glance what’s working and what isn’t. |
Why your marketing numbers don’t add up
Most businesses don’t fail because of bad marketing. They fail because they’re measuring success the wrong way.
Take website traffic. If yours doubled overnight, you’d assume your marketing was working, right?
But what if those visitors weren’t your ideal customers? What if they were bots, unqualified leads or people just browsing with zero intention to buy?
This happens more often than you’d think. A viral post, an algorithm change or a flood of bot traffic can all inflate your numbers – without bringing in real customers.
Yet, when the numbers go up, everyone takes credit. When they go down, everyone shifts blame.
Traffic spikes? “That’s because of our brilliant campaign.”
Traffic drops? “It must be the algorithm. Or seasonality. Or bad leads.”
See the problem?
Businesses chase attention instead of revenue. They track cost per click instead of cost per acquisition. They fixate on lead volume instead of lead quality.
Even ‘gold standard’ metrics like return on ad spend (ROAS) and cost-per-lead (CPL) can be misleading on their own. For example, let’s say you generate 1000 leads at $1 each. That sounds great – until you realise not a single one of those leads actually converts.
Most businesses assume the problem is bad leads. But often, it’s not the leads – it’s what happens after they arrive.
Now, let’s flip the scenario. You generate two leads at $500 each – which seems expensive. But one of them turns into a $10,000 sale. You just spent $1000 to make $10,000 – a 10x return. Which campaign actually worked?
This is why tracking the right metrics matters.
The six marketing metrics that matter
If you’re serious about growing revenue, these are the numbers you need to track.
1. Marketing Efficiency Ratio (MER)
MER tells you whether your total marketing spend is turning into real revenue. Unlike metrics that focus only on one platform, MER gives you the big picture.
Formula: MER = Total Revenue ÷ Total Ad Spend
If you’re spending money on marketing but not seeing an increase in overall revenue, your MER is too low and you’re probably burning cash on campaigns that aren’t working. A high MER means your marketing is actually profitable, not just getting attention.
2. Customer Acquisition Cost (CAC)
CAC shows how much it costs to get a new customer.
Formula: CAC = (Total Marketing + Sales Spend) ÷ Number of new customers acquired
If it costs too much to get a new customer compared with what they spend with you, your business isn’t making enough profit to sustain itself. Tracking CAC helps you figure out whether you’re spending wisely or just throwing money at ads that don’t bring in real buyers.
3. Lifetime Value (LTV)
LTV tells you how much a customer is worth to your business over time.
Formula: LTV = Average Order Value × Purchase Frequency × Customer Lifespan
A one-time customer isn’t as valuable as someone who buys again and again. If your LTV is low, you need to focus on keeping customers around – through better service, follow-ups or loyalty programs – so they don’t just buy once and disappear.
4. Conversion Rate (CVR)
CVR measures how well your marketing turns website visitors into paying customers.
Formula: CVR = (Conversions ÷ Total Visitors) × 100
If lots of people visit your website but hardly anyone buys, that’s a problem. A low conversion rate means something is off – maybe your offer isn’t clear, your checkout process is too complicated or your ads are attracting the wrong people. Fixing conversion rate lowers your cost to get new customers.
5. Return on Ad Spend (ROAS)
ROAS tells you how much money you make back for every dollar spent on ads.
Formula: ROAS = Revenue from Ads ÷ Ad Spend
If you spend $1000 on ads and make $5000 in sales, that’s an ROAS of 5.0 (meaning you make $5 for every $1 spent). But be careful – a high ROAS doesn’t always mean profit. If it costs too much to acquire customers or if your overhead is too high, you could still be losing money even with good-looking ad results.
6. Cost Per Acquisition (CPA)
CPA shows how much it really costs to turn a lead into a paying customer.
Formula: CPA = Total Ad Spend ÷ Number of Conversions
Unlike Cost Per Lead (CPL), which tells you only how much it costs to get a potential customer, CPA tells you how much you’re paying to get someone to buy. A low CPA means your marketing is working efficiently. A high CPA means you’re paying too much for too few conversions.
Why these metrics matter
Instead of focusing on likes and shares, these six metrics help you understand:
- Is your marketing actually making money? (MER, ROAS)
- Are you spending too much to get customers? (CAC, CPA)
- Are you keeping customers or losing them after one sale? (LTV)
- Are you getting visitors who actually buy? (CVR)
If you’re spending on marketing but don’t know whether it’s bringing in real revenue, you’re running blind.
Track these numbers. Fix what’s not working. And start making marketing decisions based on profit not popularity.
How to fix your marketing (and stop wasting money)
Tracking the right marketing metrics is only half the battle. Making them work for your business is the real challenge. Now that you have the data, here’s how to act on it.
1. If CVR (Conversion Rate) is low
Why?: Your website or offer isn’t convincing enough for visitors to buy. Maybe the page is slow, confusing or doesn’t match what the ad promised.
Fix it: Improve your website’s design and checkout process, make sure your ads and landing page are aligned, add reviews or testimonials and test better offers.
2. If MER (Marketing Efficiency Ratio) is declining
Why?: You’re spending more on ads but making less revenue in return. Your ad costs might be too high or you’re not keeping existing customers engaged.
Fix it: Shift budget to the best-performing ads, focus on keeping existing customers (email marketing, upsells) and refine your targeting to attract better-quality leads.
3. If CAC (Customer Acquisition Cost) is rising
Why?: It’s getting more expensive to get new customers, possibly due to higher ad competition, poor targeting or a weak sales process.
Fix it: Improve your ad targeting, test new audiences and platforms, make better-performing creatives, optimise your website for conversions, and improve your sales follow-up process.
4. If LTV (Lifetime Value) is stagnant
Why?: Customers are buying once and not coming back or they’re not spending more over time.
Fix it: Offer loyalty programs, improve the customer experience, send post-purchase emails, upsell/cross-sell and make sure your product or service meets expectations.
Rethinking marketing analytics for sustainable growth
If your marketing isn’t making money, it’s not working. It’s that simple.
Clicks, likes, shares – they don’t pay the bills. The businesses that win in 2025 will be the ones that track what actually matters: profit, customer value and acquisition costs.
So the next time you check your marketing report, ask yourself: Are we tracking real business growth or just chasing numbers that look good?
Stop measuring vanity metrics. Start making data-driven marketing decisions.
And finally, start tracking the numbers that actually grow your business.
