Marketing key performance indicators (KPIs) are like New Year’s resolutions you actually stick to. They track the direction of your campaigns and show you what success looks like.
Optimizing your business goals starts with understanding the right marketing KPIs. Explore these essential KPIs, spanning everything from marketing financials to channel-specific metrics, to identify which ones you should track.
Table of contents
What is a KPI?
A key performance indicator (KPI) is a measure of how effectively you achieve your business objectives, marketing KPIs are specific to marketing activities.
For example, you might use conversion rate on your ecommerce store as a KPI, measuring the percentage of visitors who make a purchase. Tracking KPIs at multiple levels can help you make data-backed business decisions on how to reach your targets.
Marketing KPIs to track
- Customer acquisition cost (CAC)
- Customer lifetime value (LTV)
- Average order value (AOV)
- Marketing return on investment (ROI)
- Return on ad spend (ROAS)
- Cost per lead (CPL)
- Marketing qualified leads (MQL)
- Conversion rate (CVR)
- Shopping cart abandonment rate (AR)
- Keyword coverage
- Share of voice (SOV)
- Average social media engagement
- Traffic distribution
- Web engagement rate (ER)
- Email subscribers
- Customer retention
These are the most commonly used marketing metrics for assessing success:
1. Customer acquisition cost (CAC)
Customer acquisition cost is the total cost of acquiring a single customer and typically includes advertising expenses such as Google ads. Some businesses expand their CAC calculation to encompass agency fees and marketing department payroll, offering a broader view of customer acquisition costs. Whether you define acquisition costs narrowly or broadly, both approaches to CAC serve as valuable KPIs.
Calculate CAC by dividing total sales and marketing costs by the number of customers gained over the period the money was spent. Tracking CAC can help inform decisions about marketing budget allocation based on which channels and tactics prove most efficient.
2. Customer lifetime value (LTV)
Customer lifetime value measures the total revenue an average customer generates throughout their relationship with your brand.
For a healthy ecommerce business, LTV should be about three times your CAC, or more. Tracking customer lifetime value incentivizes the marketing team to develop long-term customer relationships. LTV also helps you track the success of customer retention strategies, which are essential for sustainable sales growth.
Many businesses monitor their one-month and annual LTV metrics as marketing KPIs, providing clear insights into long-term LTV trends. Improvements in these shorter-term LTVs often signal enhancements in overall LTV and faster customer repurchase rates.
3. Average order value (AOV)
Your average order value is the average revenue generated from a single order. Boosting your average order value, even marginally, can significantly enhance your customer lifetime value, maximizing the value from each acquired customer.
For example, say your store receives 1,000 visits monthly, with a 5% conversion rate, resulting in 50 sales. With an AOV of $250, your revenue stands at $12,500. Increasing the AOV to $300 raises your revenue to $15,000, securing an extra $2,500 without you having to spend money on attracting more customers to your site.
4. Marketing return on investment (ROI)
Return on investment is a financial KPI that gets to the brass tacks of marketing: Did you generate more money than you spent? Marketing ROI—sometimes referred to as marketing efficiency ratio (MER)—measures the profitability of your marketing investments by taking total revenue in a period and dividing it by total marketing costs.
Similarly to CAC, you might define marketing costs as the amount spent on ads or the amount spent on marketing in total, including agency fees, payroll, and other marketing-related expenses.
5. Return on ad spend (ROAS)
On top of overall marketing ROI, a savvy marketer tracks the channel-specific profitability of their advertising dollars. Calculate total ROAS (pronounced “row-as”) by dividing the revenue attributable to advertising by the total amount spent on ads. A higher ROAS indicates a more effective ad campaign.
To ensure you’re using your marketing budget effectively, you can also review your ROAS by ad platform or campaign for a more granular assessment of ad performance.
6. Cost per lead (CPL)
Your cost per lead (CPL) is the total amount spent to acquire a lead (i.e., a potential customer who has shown interest in a product or service by providing their email or phone number). CPL is similar to CAC but focuses on a lead rather than a new, converted customer. Segmenting your CPL by channel, campaign, or even ad creative can help you see which marketing tactics are most effective.
Tracking your CPL history can help you predict times of higher CPLs, often coinciding with increased advertiser competition in ad auctions, like during political campaigns, holidays, or back-to-school seasons.
7. Marketing qualified leads (MQL)
Primarily a business-to-business (B2B) marketing KPI, marketing qualified leads are leads who have met specific criteria that indicate interest and are therefore identified as more likely to convert than other leads. (MQLs can eventually become sales qualified leads—potential customers who the sales team determines are likely to make a purchase.)
Measuring MQLs can help you understand what your most qualified prospects are engaging with and focus your marketing efforts on those most likely to buy.
8. Conversion rate (CVR)
Your conversion rate is the percentage of website visitors who take a desired action, such as completing a purchase or subscribing to a newsletter. A purchase is typically considered the most critical action and the most important CVR to monitor.
Calculate your conversion rate by dividing the number of times a desired action occurred by the total number of visits to the site over a given period. Then, find out how your store stacks up compared to ecommerce conversion rate benchmarks.
9. Shopping cart abandonment rate (AR)
Shopping cart abandonment rate (AR) measures the percentage of shoppers who add items to their cart but leave without completing the purchase. This KPI is crucial for identifying issues in the buying process and improving purchase conversion rates.
To calculate this percentage, divide the number of completed purchases by the number of carts created during a given period, then multiply by 100 to obtain a percentage.
To improve your AR, scrutinize each step of the checkout process to identify and mitigate obstacles or friction points, like excessive shipping fees or unclear delivery details. Lengthy or intricate checkouts typically increase abandonment rates. Examine carts that convert successfully to pinpoint commonalities, be it certain products, promotions, or user journeys.
10. Keyword coverage
Keyword coverage measures how many keywords your website ranks for on search engines like Google. Ranking for more keywords enhances your chances of increasing organic traffic.
Measure, monitor, and benchmark your keyword ranking coverage against your direct competitors using tools like Ahrefs, Moz, or Semrush. Extend your coverage and overtake their most relevant rankings with a strong SEO strategy.
11. Share of voice (SOV)
Share of voice (SOV) measures your brand’s online engagement relative to competitors, providing insights into market share and highlighting your brand’s position and influence.
To calculate SOV, sum up your brand's organic search traffic and mentions on social media channels, and repeat this for your top three to five competitors. SOV is your combined search and social footprint as a ratio of the total from you and your competitors. Automate this with tools like Semrush for search analytics and Emplifi for social monitoring.
12. Average social media engagement
Social media engagement refers to how users interact with your social mediaposts, such as likes, comments, saves, and shares. It’s critical for gauging the effectiveness of your content and audience connection.
Calculate your average social media engagement by totaling all engagement interactions and dividing it by the number of posts. Your social media content with above-average engagement can serve as a map for ideating campaigns on other platforms and even inform product updates and creation.
13. Traffic distribution
Traffic distribution is the percentage of website traffic driven by each traffic source (e.g., organic, paid ads, social media). Segmenting your total website visitors using analytics software like Google Analytics can tell you if you’re overly reliant on a single traffic source (i.e., all your traffic comes from paid advertising) or if traffic from a different marketing channel is higher or lower quality than others.
Measuring and monitoring traffic distribution sheds light on the performance of less visible channels like email, referral, and direct traffic but also informs you about channel ROI and signals the need for diversifying traffic sources to reduce overreliance on any single one.
14. Web engagement rate (ER)
Engagement rate is a Google Analytics KPI that measures the percentage of engaged sessions on a website. Google qualifies a session as engaged when it lasts longer than 10 seconds, includes two or more page views, or includes a conversion event such as clicking on a link or watching a video.
Tracking your site-wide, page-level, and channel-specific engagement rate helps you see what site content works best in what context (e.g., some content engages better for traffic from social, whereas some does better for traffic from email) and indicates what pages might most benefit from UX design improvements.
15. Email subscribers
Email subscribers—individuals who opt-in to receive email communications—represent a direct line to an engaged, interested audience, making them a valuable asset for your marketing strategy. By increasing engagement with your email marketing campaigns, you can gradually build up a following of dedicated customers.
16. Customer retention rate
Use customer retention rate to measure the proportion of customers who continue to purchase from you over a given period. Typically expressed as a percentage, calculate the customer retention rate by dividing the total number of non-new customers at the end of a period by the number of customers at the start. Shopify’s customer reports can help you distinguish these purchases.
Customer retention rate offers valuable insights into customer satisfaction and product engagement. A rising retention rate signifies increasing customer contentment and repeat purchases, while a declining rate suggests diminishing satisfaction or reduced necessity for the product.
Marketing KPIs FAQ
What are KPIs in marketing?
In marketing, key performance indicators (KPIs) are metrics used to measure the effectiveness of your strategies and marketing campaigns, helping you understand what’s working and what isn’t.
Why are KPIs used in marketing?
KPIs measure the effectiveness of marketing campaigns and strategies against predefined objectives, helping you break down success on the road to larger goals.
What is a marketing KPI dashboard?
Dashboards are visual tools that display key performance indicators relevant to your marketing objectives. They can visualize what’s going well and what needs attention.
