The only marketing metrics that matter

Marketing teams have more data than ever, yet many still struggle to measure what truly impacts revenue. Dashboards are packed with vanity metrics — impressions, social shares, and email open rates — but those numbers don’t reveal customer health or long-term profitability.

Focusing on the wrong data leads to wasted budgets, missed revenue opportunities, and campaigns that fail to drive real business outcomes. The brands that win focus on metrics that drive revenue, not just activity. Measuring acquisition, engagement, and retention ensures that marketing efforts lead to sustainable growth, not wasted spending.

This article highlights the customer marketing metrics that matter most: acquisition costs, engagement, customer value, and retention. These numbers reveal how well a marketing strategy attracts, converts, and retains valuable customers.

1. Customer acquisition cost (CAC): Efficiency over volume

Acquisition cost determines whether your marketing strategy is sustainable or self-defeating. When you pay too much to acquire customers, you eat into profitability before they've even made their second purchase. 

The reality of today's market makes this challenge even more pressing. Digital advertising costs continue to climb – paid search spend jumped 6% year-over-year in Q2 2024, while paid social spend grew by 13%, mainly because of higher ad prices. 

As competition for attention intensifies, campaigns that drive traffic but fail to attract high-value buyers become budget vampires, draining resources without delivering sustainable growth. When marketing teams track customer acquisition cost (CAC) alongside customer quality metrics, they can make smarter, more targeted investments.

Key metrics to track

• Customer acquisition cost (CAC): Total marketing spend divided by new customers acquired
• Cost per acquisition (CPA): How much you’re paying per conversion across different channels
• New customer rate: Percentage of total sales from new customers vs. returning customers
• Campaign performance: ROAS (return on ad spend) and conversion rate, with a focus on customer quality

How to improve these metrics

Marketers can lower their customer acquisition costs (CAC) by improving audience segmentation and refining campaign targeting. For example, a brand selling premium skincare products can analyze its highest-spending customers and create lookalike audiences for paid ads. Instead of broad targeting, focusing on this high-value segment reduces wasted spend and increases conversion rates.

Faster campaign execution also reduces CAC. Delayed launches often mean missing out on timely opportunities, such as seasonal promotions or viral trends. Brands that automate workflows and use AI-powered optimization can push campaigns live in days instead of weeks, capturing high-intent customers at the right moment.

2. Customer engagement: Predicting future behavior

Engagement serves as one of the strongest predictors of future retention. Customers who actively interact with a brand across multiple touchpoints are substantially more likely to make repeat purchases, whereas disengaged customers signal a high risk of churn. 

Many brands track engagement in superficial ways, such as counting clicks and email opens, rather than focusing on meaningful interactions. There's a world of difference between a customer who opens an email but never makes a purchase and one who browses product pages, responds to SMS campaigns, and leaves reviews. 

When you track engagement in ways that reflect genuine customer interest, you can strengthen retention efforts and build long-term loyalty.

Key metrics to track

• Engagement score: A composite metric tracking interactions across channels (email, SMS, website, in-app)
• Response rates: The percentage of customers who engage with campaigns (beyond just opening an email)
• Customer health score: A predictive measure of customer activity and likelihood to convert again

How to improve these metrics

Effective engagement starts with delivering content and offers that align with observed customer behavior.  For example, a beauty brand might track customers who engage with tutorials on social media but haven’t yet made a purchase. Sending a personalized email featuring products used in those tutorials, along with a limited-time discount, encourages action while reinforcing the customer’s interest.

An omnichannel strategy also drives engagement. Leading brands also recognize that customers interact across multiple platforms throughout their journey. Rather than running isolated campaigns, they design marketing programs that continue conversations across email, SMS, web, and mobile apps. 

3. Customer value metrics: Revenue impact over single transactions

One-time purchases don't build sustainable businesses. Smart marketing teams focus on increasing customer lifetime value rather than solely pursuing new customer acquisition.

Acquisition costs continue to rise, making it more important than ever to maximize revenue from existing customers. Tracking CLV, purchase frequency, and average order value (AOV) helps marketing teams optimize retention strategies, campaign investments, and product promotions.

Key metrics to track

• Customer lifetime value (CLV): Projected revenue from a customer over their entire relationship with your brand
• Average order value (AOV): How much customers spend per purchase
• Purchase frequency: How often customers come back to buy again

How to improve these metrics

Increasing customer value starts with targeted retention strategies. A subscription meal kit company, for instance, can analyze purchasing behavior to identify customers who downgrade their plans before eventually churning. The company encourages longer commitments and increases overall revenue per customer by offering personalized discounts or bundling add-ons at a lower price point.

Better segmentation also drives higher CLV. An online fashion retailer might notice that customers who purchase accessories return sooner than those who buy apparel. Creating exclusive accessory bundles or personalized recommendations based on past purchases encourages repeat transactions and maximizes customer value.

4. Customer retention: The true driver of profitability

Retention fuels profitability. Acquiring a new customer costs significantly more than keeping an existing one, yet many brands still allocate disproportionate resources to acquisition rather than keeping their best customers engaged.

If given the right incentives, customers who have already made a purchase are more likely to make another purchase. Tracking retention rates, churn indicators, and win-back success rates provides insights into what keeps customers engaged.

Key metrics to track

• Retention rate: Percentage of customers who continue buying over a set period
• Churn risk indicators: Early warning signs like declining purchase frequency or disengagement
• Win-back success rate: Percentage of lapsed customers who return after targeted win-back efforts

How to improve these metrics

Retention marketing is about staying ahead of churn. A fitness subscription app, for example, can track users who gradually decrease their session frequency. Sending proactive check-ins, personalized workout recommendations, or a one-time reactivation offer can re-engage these users before they cancel.

Strategic win-back campaigns also deliver significant ROI. An online bookstore might notice that customers who haven't made a purchase in six months are unlikely to return on their own. Sending a personalized email with a discount on their favorite book genres, along with a reminder of their past purchases, helps reconnect them with the brand in a meaningful way.

Customer marketing should be data-informed and outcome-focused

We've all sat in those meetings where someone proudly presents impressive-looking metrics that don't translate to revenue. Marketing teams everywhere defend high open rates while actual conversion numbers tell a completely different story. 

The truth is, marketing that moves the needle is focused on tracking what matters. When companies shift focus to measuring customer lifetime value, they often discover their "most successful" campaigns are attracting one-time buyers who never return. 

For teams overwhelmed by dashboards and struggling to connect marketing efforts to actual revenue, it may be time for a different approach. 

Simon Data helps marketing teams cut through the noise and focus on metrics that drive sustainable growth. Let's discuss how we can help transform customer insights into a competitive advantage for your company.