How to Actually Measure If Your Marketing Is Working

You’re spending money on marketing. But do you actually know if it’s working?

Most business owners can’t answer that question with real numbers. They have a vague sense that “things are going okay” or “we’re getting some leads,” but they can’t tell you which marketing channels are driving revenue and which are wasting money.

That’s a problem. Because if you can’t measure it, you can’t improve it. And if you can’t improve it, you’re just guessing—and hoping—that your marketing dollars are well spent.

Here’s how to actually measure if your marketing is working, using metrics that matter.

Stop Tracking Vanity Metrics

First, let’s talk about what NOT to measure.

Vanity metrics look impressive but don’t tell you anything about business results:

• Social media followers

• Website traffic

• Likes and comments

• Email list size

• Impressions

These numbers feel good. “We got 10,000 impressions this month!” sounds great in a meeting. But impressions don’t pay your bills. Followers don’t buy your products. Traffic doesn’t automatically become revenue.

I’m not saying these metrics are worthless—they can indicate brand awareness and reach. But they’re not success metrics. They’re activity metrics.

The Only Metrics That Actually Matter

Here are the numbers you should be tracking:

1. Cost Per Lead (CPL)

What it is: How much you spend to generate one lead (someone who expresses interest in your business).

How to calculate: Total marketing spend ÷ Number of leads generated

Example: You spend $1,000 on Google Ads and get 20 leads. Your CPL is $50.

Why it matters: This tells you if your lead generation is efficient. If your CPL is higher than what you can afford based on your customer lifetime value, you’re losing money.

Benchmark: Varies wildly by industry. B2B services might see $50-200 per lead. Local services might see $20-100. E-commerce might see $10-50.

2. Conversion Rate

What it is: The percentage of leads who become paying customers.

How to calculate: (Number of customers ÷ Number of leads) × 100

Example: You get 20 leads and 4 become customers. Your conversion rate is 20%.

Why it matters: A low conversion rate means you’re attracting the wrong leads, your sales process needs work, or your offer isn’t compelling. A high conversion rate means your marketing is attracting qualified prospects.

Benchmark: Average is 2-5% across industries. Top performers hit 10%+.

3. Customer Acquisition Cost (CAC)

What it is: How much you spend to acquire one paying customer.

How to calculate: Total marketing and sales spend ÷ Number of new customers

Example: You spend $2,000 on marketing and sales in a month and acquire 10 customers. Your CAC is $200.

Why it matters: This is the ultimate metric. If your CAC is higher than your customer lifetime value, you’re running an unsustainable business.

Rule of thumb: Your CAC should be no more than one-third of your customer lifetime value.

4. Customer Lifetime Value (CLV)

What it is: The total revenue you expect to earn from a customer over their entire relationship with your business.

How to calculate: Average purchase value × Average number of purchases per year × Average customer lifespan in years

Example: Your average customer spends $500 per purchase, buys twice a year, and stays with you for 3 years. CLV = $500 × 2 × 3 = $3,000.

Why it matters: This tells you how much you can afford to spend acquiring customers. If your CLV is $3,000 and your CAC is $200, you’re in great shape.

5. Return on Ad Spend (ROAS)

What it is: How much revenue you generate for every dollar spent on advertising.

How to calculate: Revenue from ads ÷ Ad spend

Example: You spend $1,000 on Facebook ads and generate $4,000 in revenue. Your ROAS is 4:1 (or 400%).

Why it matters: This tells you if your ads are profitable. A ROAS of 3:1 or higher is generally considered good, but it depends on your profit margins.

Minimum benchmark: You need at least 2:1 to break even in most businesses after accounting for product costs and overhead.

6. Marketing ROI

What it is: The overall return on your entire marketing investment.

How to calculate: [(Revenue from marketing - Marketing cost) ÷ Marketing cost] × 100

Example: You spend $5,000 on marketing and generate $20,000 in revenue.

ROI = [($20,000 - $5,000) ÷ $5,000] × 100 = 300%.

Why it matters: This is your bottom-line metric. Are you making money or losing money on marketing?

Benchmark: Good marketing ROI is 5:1 or 500%. Exceptional is 10:1 or higher.

How to Actually Track These Metrics

Knowing what to measure is one thing. Actually measuring it is another. Here’s how:

Set Up Conversion Tracking

• For Google Ads: Install Google Ads conversion tracking on your website to track form submissions, phone calls, and purchases.

• For Facebook/Instagram Ads: Install the Meta Pixel to track website actions.

• For your website: Use Google Analytics 4 to track traffic sources, user behavior, and conversions.

Use a CRM

A Customer Relationship Management (CRM) system tracks every lead from first contact to closed sale. This lets you see:

• Where each lead came from

• How long it took to close

• How much revenue they generated

• Which marketing channels produce the best customers

Even a simple spreadsheet works if you’re just starting out.

Track Phone Calls

If customers call you, use call tracking software that assigns unique phone numbers to each marketing channel. This way you know if a lead came from Google Ads, your website, Facebook, or a flyer.

Ask Every Lead “How Did You Hear About Us?”

Simple but effective. Add this question to your contact forms and ask it during phone calls. Track the responses.

What Good Looks Like: Real Benchmarks

Here’s what healthy marketing metrics look like for a typical small service business:

• Cost Per Lead: $30-75

• Conversion Rate: 5-20%

• Customer Acquisition Cost: $150-375

• Customer Lifetime Value: $1,500-3,000

• ROAS: 4:1 to 8:1

• Marketing ROI: 500-800%

If your numbers are significantly worse than these, something needs to change.

Red Flags That Your Marketing Isn’t Working

Your CAC is higher than your CLV: You’re losing money on every customer. Either reduce acquisition costs or increase customer value.

Your conversion rate is below 5%: You’re attracting unqualified leads. Tighten your targeting or improve your sales process.

You can’t answer these questions with data: You’re flying blind. Set up tracking immediately.

Your ROAS is below 2:1: Your ads aren’t profitable. Pause them and fix your targeting, messaging, or landing pages.

What to Do With This Information

Once you’re tracking the right metrics, use them to make decisions:

Double down on what works: If Google Ads has a CAC of $100 and Facebook Ads has a CAC of $300, shift budget to Google.

Fix or cut what doesn’t: If a marketing channel consistently delivers poor results, either optimize it or stop wasting money on it.

Test and optimize: Run small experiments, measure results, and scale what works.

Set goals: “Reduce CAC from $200 to $150 by improving landing page conversion rate” is a real, measurable goal.

The Bottom Line

Marketing without measurement is just expensive guessing. You need to know your numbers—real numbers that tie directly to revenue, not vanity metrics that make you feel good but don’t pay the bills.

Track cost per lead, conversion rate, customer acquisition cost, customer lifetime value, ROAS, and overall marketing ROI. These metrics tell you exactly what’s working and what’s not.

At Wholistic Agency, we track every single one of these metrics for our clients. We don’t just report on impressions and clicks—we report on leads generated, cost per lead, and revenue driven. Because that’s what actually matters.

If you’re not tracking these metrics, or you don’t know how, let’s talk. We offer free consultations where we’ll help you understand your current marketing performance and identify opportunities to improve. No fluff, no vanity metrics—just real data that drives real decisions.

Because your marketing should be measurable, accountable, and profitable. Anything less is just a waste of money.

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About the Author

Mike Leyva-Doherty is the Founder & CEO of Wholistic Agency, a Tucson-based marketing agency specializing in data-driven marketing strategies. With experience managing campaigns across multiple industries, Mike helps businesses measure what matters and optimize for real ROI.