Key marketing KPI: how to measure effectiveness

In 2026, marketing is no longer a domain of intuitive decisions. Businesses are operating in an environment of rising traffic costs, fragmented channels, and high expectations from owners and investors. In this reality, the question of whether marketing is working is transformed into a much more specific one – what indicators confirm its effectiveness and how to make management decisions based on them. In this article, we’ll look at a practical approach to marketing KPIs: from the logic of choosing metrics to calculation examples and common mistakes to avoid.

How not to get lost in metrics

Marketing KPIs should be viewed not as a set of disparate numbers, but as a holistic system of indicators that reflects the customer journey – from the first contact with the brand to repeat purchases and the formation of long-term business value. This approach allows you not only to record the current state of marketing, but also to understand where exactly the points of growth or loss of efficiency occur.

In practice, it is convenient to structure KPIs into logical categories, each of which corresponds to a specific stage of the marketing funnel and management tasks.

Acquisition

They show how a business attracts the attention of the audience and generates primary demand. This group includes metrics related to traffic and its cost. They help evaluate the effectiveness of advertising channels, campaign scaling, and the feasibility of investing in new traffic sources. If engagement rates are deteriorating, it’s a signal to revise channels, creatives, or outreach strategy.

Engagement

Demonstrate how well the audience interacts with the content and product. These metrics allow you to evaluate the relevance of the offer, the clarity of messages, and the convenience of the user experience. These metrics are often used as early warning signs: they are the first to respond to problems before conversions or revenue drop.

Conversion

Recording the moment when interest turns into a specific action: application, purchase, registration. It is at this stage that marketing begins to directly affect the financial result. Conversion analysis allows you to find weaknesses in the sales funnel and make decisions about optimizing landing pages, offers, or the checkout process.

Revenue

Responsible for measuring the direct economic effect of marketing activities. This group of metrics allows you to assess how well the invested budgets are transformed into revenue and profit, as well as compare the effectiveness of different channels and campaigns in monetary terms. Without these metrics, marketing is difficult to defend at the level of financial planning.

Retention and loyalty

These metrics show the long-term value of customers and the stability of the business model. They help to understand whether customers return, how long they stay with the brand, and how profitable it is to invest in repeat sales. For mature businesses, these KPIs are often crucial, as retaining a customer is usually cheaper than attracting a new one.

Brand health metrics

Reflect the company’s position in the market and the level of trust from the audience. They are less tied to instant sales, but directly affect the cost of acquisition, conversion, and loyalty in the long run. Such indicators are especially important when entering new markets or competitive niches.

For a company at the scaling stage, the priority will be customer acquisition and value, for a stable business – revenue and retention, and for entering a new market – brand metrics and interaction. Such a structured approach allows you to avoid overload and focus on those KPIs that really affect the result.

Key marketing KPIs and how to interpret them

A marketing dashboard is not a report for show, but a working management tool. Its task is to quickly show where the business is making money, where it is losing money, and what actions need to be adjusted. Let’s consider the main marketing indicators used in most business models and how to read them correctly.

1. CPL (Cost Per Lead).

Formula: cost / number of leads

CPL shows the cost of acquiring one potential customer and is a key metric for B2B companies and lead generation models. It allows you to evaluate how effectively marketing budgets are converted into potential sales and helps you plan further investments in channels and campaigns.

It is advisable to display CPL in the dashboard for all major channels and campaigns, as well as by audience segment. This allows you to identify the most effective traffic sources and segments that generate better quality leads, as well as see where costs are not justified. It is also important to combine CPL with lead quality and conversion rates: a low CPL alone does not guarantee profit if the generated leads do not become real customers.

CPL also serves as a signal to optimize your budget and marketing strategy. By analyzing this indicator over time, you can determine whether to increase investments in certain channels, focus on improving lead quality, or improve communication and offers for better conversion.

2. SV (Sales Volume).

Formula: the total number of units of a product or service sold over a certain period

Sales Volume is the volume of sales and the actual result of marketing and sales activities. This indicator allows you to assess how effectively marketing campaigns convert potential demand into actual purchases and serves as a basic benchmark for financial planning.

In a dashboard, SV should be displayed by product, sales channel, and audience segment to see which areas generate the most volume and where there are growth points. Comparing SV with other KPIs, such as CAC, LTV, and CR, helps you assess the true profitability of sales, not just the number of sales.

It is worth considering that sales volume growth without controlling other indicators can hide problems: for example, high volume with low margins or increased customer acquisition costs that make sales unprofitable.

3. Net Profit.

Formula: revenues – all expenses (production, marketing, operating costs, etc.)

Profit shows how much a company actually earns after covering all expenses and is a key financial indicator of business performance. In a dashboard, it is advisable to display it by product, direction, and channel to see where the business generates the highest financial result and where profitability is low.

This metric allows you to link marketing and sales efforts to the financial result, because even sales growth does not guarantee profitability if expenses exceed revenues.

4. CR (Conversion Rate).

Formula: number of conversions / number of visitors × 100%.

CR shows how effectively traffic performs targeted actions – applications, purchases, or other important conversions. In a dashboard, this indicator should be displayed for each stage of the funnel to see where users «drop out» and what processes need to be optimized.

CR helps to quickly assess the effectiveness of the offer, website design, and advertising creatives. A drop in conversion is more likely to signal problems with UX, offer, or message rather than traffic.

5. SOM (Serviceable & Obtainable Market).

Formula (simplified): sales of a specific business / total available market × 100%.

SOM shows the real market share that a company can occupy within its segment and taking into account current resources. This is a strategic KPI that helps to assess the position of a business among competitors and plan scaling.

It is advisable to display SOM in the dashboard by product lines, geographic regions, and customer segments to see where the business has the greatest potential for growth and where it needs to strengthen its position.

6. ARPU (Average Revenue Per User).

Formula: total revenue / number of active users for the period

ARPU shows how much one user or account brings in on average over a certain period. This is a key KPI for subscription-based businesses, SaaS, mobile applications, and service products, where it is important to evaluate the effectiveness of user monetization, not just sales.

In the dashboard, it is advisable to display ARPU by user segments, engagement channels, and product lines to understand which audiences generate the most revenue and where there is potential for upselling or cross-selling. It’s important to combine ARPU with LTV and CAC to assess the full cost-effectiveness of customer acquisition and retention.

7. CR (Churn Rate).

Formula: number of lost customers / total number of customers × 100%.

Churn Rate shows what percentage of customers a company loses over a certain period and is a key KPI for assessing audience loyalty and retention. A high churn rate signals problems with a product, service, or communication and requires a prompt response.

In the dashboard, it is advisable to display churn by customer segments, acquisition channels, and products to see where the greatest risks of losing customers are and which segments require additional efforts to retain. Churn Rate analysis in dynamics allows you to track the effectiveness of loyalty programs, support, and product updates.

8. Number of customers.

Formula (simplified): new customers + regular customers

This indicator shows how many people use your product or service over a certain period. It allows you to assess the scale of your business, the level of audience engagement, and the potential market for sales or upselling.

It is advisable to display the number of customers by segment, engagement channel, and product in the dashboard to see where the business is growing faster and where additional work is needed to retain and attract them. Combining this KPI with LTV, CAC, and Churn Rate allows you to evaluate the cost-effectiveness of working with the audience.

9. BR (Brand Recognition).

Formula (approximate): % of the target audience that recognizes the brand / total target audience × 100%.

Brand Recognition shows how well your audience knows and recognizes your brand. This is a strategic KPI that allows you to evaluate the effectiveness of communications, advertising, and market positioning.

It is advisable to display this indicator by segments, communication channels, and geography in the dashboard to understand where the brand is strong and where it needs additional activities. It’s important to combine Brand Recognition with Brand Awareness, Share of Voice, and sales metrics to assess the true impact of brand awareness on business results.

10. CPC (Cost Per Click).

Formula: advertising costs / number of clicks

CPC reflects how much it costs to attract one user through an ad or campaign. This is a basic metric of the effectiveness of paid channels, such as contextual advertising, social media, or display advertising.

In a dashboard, it is advisable to display CPC by channel, campaign, and creative to see where traffic is expensive and where it is effective. At the same time, CPC growth is not always negative: if conversion rate (CR) or LTV increases at the same time, more expensive traffic can bring more profit.

11.  NPS (Net Promoter Score, customer satisfaction index).

Formula: % promoters – % critics

NPS measures the willingness of customers to recommend your brand, product, or service to others. It is one of the key indicators of audience loyalty and satisfaction that signals future sales and customer retention.

In a dashboard, it is advisable to display NPS by customer segments, communication channels, and product lines to understand where the brand receives a positive response and where improvements in product, service, or communications are needed. It is important to analyze NPS along with behavioral metrics such as CR, LTV, and Churn Rate to assess the real impact of customer satisfaction on business results.

12.  ROI (Return on Investment).

Formula: (revenue – expenses) / expenses × 100%.

ROI shows how profitable investments in marketing and business processes are. It is a universal metric for evaluating the effectiveness of campaigns, sales channels, and marketing activities.

In a dashboard, it is advisable to display ROI by channel, campaign, and project to see where costs are justified and where optimization is needed. For businesses with long sales cycles, ROI should be analyzed for a period of 6-12 months, as short-term indicators may not reflect the full picture of efficiency.

13.  CTR (Click-Through Rate).

Formula: clicks / impressions × 100%.

CTR shows how effectively an advertising message attracts the audience’s attention and stimulates conversions to a website or landing page. This is a key indicator for assessing the quality of creatives, ad relevance, and correct targeting.

In a dashboard, it is advisable to display CTR by campaign, channel, and audience segment to quickly determine which ads are performing best and which need to be optimized. A high CTR indicates that users are interested in your message, but it does not guarantee sales – it is important to combine it with conversion rates (CR) and LTV to assess the real effect of advertising campaigns on the business.

14.  LTV (Lifetime Value).

Formula (simplified): average check × number of repeat purchases × average customer lifetime

LTV shows how much revenue one customer generates throughout the entire cycle of cooperation with the company. This KPI allows you to assess the long-term value of a customer rather than the short-term effect of advertising. In a dashboard, it is advisable to display LTV by segment, engagement channel, and product to see where customers bring the most profit.

It is especially important to analyze LTV in conjunction with CAC. Even a high LTV is meaningless if the cost of acquiring a customer exceeds its value.

15.  CAC (Customer Acquisition Cost).

Formula: marketing and sales expenses / number of new customers

CAC shows how much it costs a company to acquire one new customer. This is a key indicator for assessing the cost-effectiveness of marketing campaigns and making decisions about business scaling. In a dashboard, CAC should be displayed by channels, campaigns, and audience segments to see which traffic sources are the most effective and which generate unprofitable customers.

It’s important to take into account all expenses, including sales department salaries, CRM, analytics, and lead support. Often, companies count only advertising budgets, which creates the illusion of low CAC but actually hides risks to profitability.

Why systematic KPI measurement directly affects profit

Systematic measurement of marketing KPIs is not just a collection of numbers, but a way to see the real impact of marketing activities on business results.

When indicators are monitored regularly and interconnectedly, management and marketing get a powerful tool for cost optimization, forecasting, and scaling. Let’s take a closer look.

Allows you to see the real return on investment in marketing

Regular monitoring of KPIs, such as CAC, LTV, ROI, and CR, shows which channels and campaigns are really profitable and which ones are wasting the budget without any economic effect. This helps you not to blindly increase advertising costs, but to concentrate resources where they give the maximum return.

Identifies problem areas in the funnel even before sales drop

Systematic KPI tracking allows you to spot problems at an early stage: low conversion at a certain stage of the funnel, high customer churn, or a decrease in CTR. This makes it possible to respond quickly and improve processes without waiting for a drop in sales.

Provides a basis for forecasting and scaling

When KPIs are measured systematically, the company receives data for accurate budget planning and revenue forecasting. For example, knowing the average LTV and CAC by channel, you can calculate the potential revenue from new campaigns and determine which marketing investments will be economically justified when scaling your business.

Increases reporting transparency for management

Regular KPI reports allow executives to see a clear picture of marketing effectiveness without subjective assessments. This increases trust in the marketing department and allows them to make strategic decisions based on data, not assumptions.

Simplifies decision-making on budget reallocation

When KPIs reflect the effectiveness of channels and campaigns, it’s easy to prioritize and quickly reallocate resources. This allows you to increase profits without additional costs by focusing your budget on the most effective points of influence.

Example of calculating marketing KPIs for E-commerce

To understand how marketing KPIs work in real business, let’s look at a practical example. This will allow you not only to see the formulas on paper, but also to understand how the indicators are interconnected and affect profits and strategic decisions.

Let’s say an online store spent UAH 50,000 on advertising, received 10,000 clicks to the site, and converted them into 200 orders with an average check of UAH 1,200.

Calculate the key KPIs:

• CR: 200 / 10 000 = 2%

Indicates that only 2% of visitors performed the target action. This is a signal to check the usability of the site, the offer, and advertising creatives.

• CAC: 50 000 / 200 = 250 UAH

How much it costs to attract one customer. It helps to evaluate the effectiveness of the advertising budget.

• Revenue: 200 × 1 200 = 240 000 UAH

Shows the actual financial result of the campaign.

• ROI: (240 000 – 50 000) / 50 000 = 380%.

Demonstrates the return on investment in marketing. A high ROI indicates an effective campaign and proper budget allocation.

Common mistakes when analyzing marketing KPIs

Let’s analyze the main mistakes that reduce marketing effectiveness and can lead to wrong decisions.

1. Analyzing individual metrics without connection to the final income.

Focusing on metrics such as CTR or CPC without evaluating their impact on sales and profits can be misleading. A high CTR does not guarantee conversion, and a low CAC can be useless if the customer’s LTV is not high enough. Therefore, always combine marketing KPIs with financial metrics such as ROI, profit, and LTV.

2. Ignoring LTV when evaluating channel performance.

Calculating channel profitability without taking LTV into account gives only a short-term picture. For example, a channel with a high CAC may seem inefficient, but if customers bring in a large LTV, it’s worth scaling. So, LTV should be analyzed in conjunction with CAC and other metrics to make strategic decisions.

3. Incorrect distribution of costs between marketing and sales.

Often, marketing spends the budget, while the costs of the sales department or customer support are not taken into account. This leads to an underestimation of the real CAC and a distorted understanding of channel efficiency. That’s why it’s important to always include all related costs in the calculation of the cost of customer acquisition.

4. Lack of correct tracking and attribution.

If you don’t track lead sources and apply the right attribution, you don’t know which channels are actually working. This can lead to incorrect budget reallocation and reduced ROI. In practice, you need to set up conversion tracking at all stages of the funnel and apply attribution models that fit your business model.

5. Too many KPIs without clear priorities.

Tracking dozens of metrics at once often complicates analysis and delays decision-making. Some KPIs duplicate each other or have no strategic value. Therefore, it is worth choosing 5-7 key KPIs that reflect the effectiveness of marketing at all stages of the funnel and focusing on them.

Practical steps to improve performance

For marketing KPIs to bring real results, it is important not only to measure them but also to work systematically on optimizing them. The main practical steps that help to improve the efficiency of marketing campaigns and ensure business profit are as follows:

So, for marketing KPIs to bring real results, it is important not only to measure them but also to systematically optimize them. Regularly reviewing CRs allows you to identify weaknesses in your offer, UX, or advertising creatives in time and test different hypotheses to increase conversions. Decisions on budget allocation should be based on data – CAC and ROI show which channels generate the most revenue, and investments in inefficient activities can be reduced. At the same time, you should work on increasing LTV through repeat sales, loyalty programs, and personalized offers. High-quality tracking and analytics allow you to track the entire customer journey and make informed decisions, while systematic monthly KPI reviews ensure timely strategy adjustments and predictability of results.

It is important to remember that effective marketing in the long run is not built around the maximum number of indicators, but around well-chosen KPIs that are directly related to the business result. If a company understands its CAC, monitors LTV, and regularly analyzes ROI, marketing stops being an expense and becomes a predictable growth tool. This is the approach you should start with right now.