The Metrics That Actually Matter: Moving Beyond Vanity Metrics to Revenue
I once inherited a client who was thrilled with their performance marketing. They showed me dashboards full of green arrows pointing up:
Website traffic: Up 240%
Social media followers: Up 180%
Email list: Up 350%
Ad impressions: Up 420%
"Amazing, right?" they said, beaming.
Then I asked: "What happened to revenue?"
Long pause.
"Well, revenue is... about the same as last year. But we're building brand awareness!"
This is the vanity metrics trap. Numbers that look impressive but don't actually move the business forward. Metrics that make for great board presentations but terrible business outcomes.
After managing millions in ad spend and hundreds of campaigns across industries, I've learned which metrics actually predict business success and which are just noise. Let me share what really matters, and what's just making you feel good while your competitors take your market share.
The Problem with Traditional Marketing Metrics
Most marketing dashboards are designed to make marketers look good, not to drive business decisions. They're filled with metrics that:
Always trend upward (impressions, reach, traffic)
Are easily manipulated (engagement rate, video views)
Don't connect to revenue (likes, followers, brand awareness)
Lag too far behind to be actionable (lifetime value, brand equity)
These aren't useless metrics—they have their place. But they shouldn't be your primary focus, and they definitely shouldn't be how you measure marketing success.
The One Metric That Rules Them All
If I could only look at one metric to understand marketing performance, it's this:
Customer Acquisition Cost (CAC) relative to Customer Lifetime Value (LTV)
Specifically: LTV:CAC Ratio
The formula: LTV:CAC Ratio = (Average Customer Lifetime Value) ÷ (Customer Acquisition Cost)
What it means:
Ratio of 1:1 = You spend $1 to acquire $1 of value (you're losing money)
Ratio of 3:1 = Healthy for most businesses
Ratio of 5:1 = Excellent efficiency
Ratio of 10:1 = Either you have an amazing business or you're under-investing in growth
Why this metric matters: It tells you the fundamental truth of your marketing: Are you acquiring customers profitably? Everything else is secondary.
You can have amazing engagement rates, impressive traffic numbers, and beautiful creative. But if your CAC exceeds your LTV, your marketing is destroying the business.
The Core Metrics Hierarchy
Here's how I structure metrics for every client, in order of importance:
Tier 1: Business Metrics (What the Business Actually Cares About)
1. Revenue Total money coming in. Everything else is support structure for this.
2. Profit Revenue minus costs. You can drive revenue that destroys profitability.
3. Customer Acquisition Cost (CAC) Total marketing and sales costs ÷ number of new customers acquired
4. Customer Lifetime Value (LTV) Average revenue per customer over their entire relationship with you
5. LTV:CAC Ratio The efficiency of your customer acquisition
Why these matter most: These are the metrics your CFO and CEO actually care about. These are the metrics that determine if your business succeeds or fails. If these are trending wrong, nothing else matters.
Tier 2: Channel Efficiency Metrics (How Well Channels Are Performing)
6. Return on Ad Spend (ROAS) Revenue generated ÷ ad spend Target: 3-5x for most businesses, but varies by margin
7. Cost Per Acquisition (CPA) How much you spend in ads to acquire one customer Should be significantly lower than LTV
8. Conversion Rate Percentage of visitors/clicks that become customers Benchmark varies by industry; optimize against your own baseline
9. Average Order Value (AOV) Average amount each customer spends per transaction Increasing this reduces CAC as a percentage of revenue
10. Purchase Frequency How often customers buy Higher frequency improves LTV without increasing acquisition cost
Why these matter: These tell you which channels are working efficiently and where to allocate budget. But they only matter in context of Tier 1 metrics.
Tier 3: Engagement Metrics (Early Indicators of Performance)
11. Click-Through Rate (CTR) Percentage of impressions that result in clicks Indicates creative effectiveness
12. Landing Page Conversion Rate Percentage of visitors who complete desired action Identifies friction in conversion path
13. Email Open and Click Rates Indicates audience engagement with messaging
14. Video Completion Rate Shows creative quality and message resonance
15. Bounce Rate Indicates traffic quality and page relevance
Why these matter: These are early indicators. Good CTR suggests compelling creative. Good landing page CVR suggests effective messaging. But they're means to an end, not ends themselves.
Tier 4: Vanity Metrics (Interesting, Rarely Actionable)
16. Impressions 17. Reach 18. Follower Count 19. Engagement Rate 20. Video Views
Why these (usually) don't matter: These make nice charts but rarely predict business success. I've seen brands with millions of impressions go out of business. I've seen brands with tiny reach dominate their markets.
Use these for context, not decisions.
The Metrics I Actually Look At Daily
When I'm actively managing campaigns, here's my daily dashboard (in order):
Morning Check (10 minutes):
Yesterday's revenue vs. target (am I on track?)
Yesterday's ad spend vs. budget (am I pacing correctly?)
Overall ROAS (am I profitable?)
CAC by channel (which channels are efficient?)
That's it. Four numbers that tell me if I'm winning or losing.
Weekly Deep Dive (1-2 hours):
Week-over-week revenue trend
ROAS by channel and campaign
CAC trend over time
Conversion rate by landing page
AOV and purchase frequency trends
Top-performing ad creative (CTR + conversion rate)
Bottom-performing ad creative (to kill or optimize)
Monthly Business Review (3-4 hours):
LTV:CAC ratio and trend
Month-over-month revenue growth
Profit margin by customer cohort
Channel attribution and incrementality
Customer retention and repeat purchase rate
Competitive market position
Notice what's missing? Daily checks of impressions, engagement rate, follower count. These don't drive decisions.
Common Metrics Mistakes (And How to Fix Them)
Mistake 1: Optimizing for ROAS Without Context
The problem: Many brands obsess over ROAS: "We need 4x minimum!" But ROAS without context is meaningless.
A 2x ROAS might be excellent if:
You have 80% repeat purchase rate
Your product margins are 70%+
You have strong brand equity driving organic growth
A 5x ROAS might be terrible if:
You have 5% repeat purchase rate
Your margins are 30%
You're in a commoditized market with no moat
The fix: Look at ROAS in context of:
Your profit margins
Your customer retention rate
Your competitive position
Your growth objectives
Sometimes a lower ROAS with higher volume is better for the business than a higher ROAS with limited scale.
Real example: I had a client demanding 5x ROAS on all campaigns. We were achieving it, but at very limited scale ($20K/month spend). When we expanded targeting to achieve 3.5x ROAS, we could scale to $80K/month spend.
The math:
Option A: $20K spend × 5x ROAS = $100K revenue
Option B: $80K spend × 3.5x ROAS = $280K revenue
Option B generated $180K MORE revenue while still being profitable. But it "looked worse" on a ROAS metric.
Mistake 2: Ignoring Time-to-Purchase
The problem: Most marketers measure conversion within 7 days or 30 days of click. But many products have longer consideration periods.
If you sell $5,000 furniture, people don't click an ad and buy the same day. They research for weeks or months.
The fix: Understand your actual sales cycle and measure accordingly.
For longer consideration purchases:
Track view-through conversions, not just click conversions
Extend attribution windows (90 days or more)
Measure assisted conversions (touch points that contribute to sale)
Track brand search volume (proxy for consideration)
Real example: A luxury furniture brand was frustrated with paid social performance. "2x ROAS, not worth it."
But when we extended the attribution window from 7 days to 90 days and included view-through conversions, the actual ROAS was 4.7x. People were seeing ads, researching for weeks, then converting.
The metric was wrong, not the channel.
Mistake 3: Channel Metrics Instead of Customer Metrics
The problem: Most marketers organize reporting by channel: "Facebook generated X, Google generated Y, email generated Z."
But customers don't experience channels separately. They see your Facebook ad, search your brand on Google, receive your email, and then convert.
Which channel gets credit? All of them? None of them? Just the last one?
The fix: Think in customer journeys, not channel silos.
Track:
First-touch attribution (what brought them to you)
Last-touch attribution (what drove final conversion)
Multi-touch attribution (all touch points that contributed)
Incrementality (what happens when you turn channels off)
Real example: A client was ready to kill Facebook because it showed the "worst" last-click ROAS (2.1x vs. 5.2x for Google).
We ran an incrementality test: turned Facebook off for two weeks.
Result: Google conversions DROPPED 40%. Why? Facebook was driving awareness and consideration. Google was capturing the demand Facebook created.
Facebook wasn't performing badly—it was performing a different function in the customer journey.
Mistake 4: Short-Term Metrics for Long-Term Decisions
The problem: Most marketers optimize daily or weekly. But some of the most important metrics only make sense over months or quarters.
You can't optimize for customer lifetime value daily—it takes months to materialize.
The fix: Match metrics to time horizons:
Optimize daily:
ROAS
CPA
CTR
Evaluate weekly:
Revenue trends
Channel efficiency
Creative performance
Measure monthly:
Customer retention
Repeat purchase rate
LTV trends
Assess quarterly:
LTV:CAC ratio
Market share
Brand health
Real example: A subscription business was optimizing for lowest CPA daily. They found audiences and creative that drove $35 CPA (their target was $40).
But three months later, they noticed: customers acquired at $35 CPA had 60% churn rate vs. 30% for customers acquired at $45 CPA.
The "more expensive" customers were actually dramatically more valuable ($120 LTV vs. $50 LTV).
Optimizing for the wrong time horizon cost them millions.
How to Build Your Metrics Dashboard
Here's the structure I use for client dashboards:
Section 1: Business Health (Top of Dashboard)
Current month revenue vs. target
YTD revenue vs. last year
This month's profit margin
LTV:CAC ratio trend (last 6 months)
Section 2: Acquisition Efficiency
Total ad spend this month
Overall ROAS
CAC by channel
CPA trend over time
Section 3: Channel Performance
Revenue by channel
ROAS by channel
Spend allocation
Channel efficiency trends
Section 4: Customer Behavior
AOV trend
Purchase frequency
Repeat customer rate
Customer cohort retention
Section 5: Creative Performance (updated weekly)
Top 10 performing ads (by revenue generated)
Ads to kill (high spend, low conversion)
CTR by creative type
Messaging themes that perform
Section 6: Forward-Looking Indicators
Pipeline/leads by channel
Email list growth
Brand search volume
Market share estimates
That's it. One page, six sections, all the information you need to make smart decisions.
The Questions Your Metrics Should Answer
A good metrics framework answers these questions clearly:
Are we making money? (Revenue, Profit)
Are we acquiring customers efficiently? (CAC, LTV:CAC)
Which channels should we invest in? (ROAS by channel, incrementality)
What creative is working? (CTR, CVR by creative)
Are our customers valuable? (LTV, repeat rate, retention)
Are we growing? (Revenue trend, market share)
Where should we optimize? (Identify biggest bottlenecks)
If your dashboard doesn't clearly answer these questions, rebuild it.
The Advanced Metrics for Scale
Once you're past $2-3M annual revenue and your basics are dialed in, here are advanced metrics to add:
Incrementality Testing What happens when you turn channels on/off? Measures true impact.
Marketing-Attributed Revenue What percentage of total revenue is driven by marketing vs. organic?
Payback Period How long until CAC is recovered? Critical for cash flow planning.
Contribution Margin by Channel Revenue minus COGS minus marketing costs. True profit picture.
Customer Cohort Analysis How do customers acquired in different months/years perform over time?
Brand Lift Studies Are you building brand equity or just renting attention?
The Bottom Line
Stop celebrating vanity metrics. Stop obsessing over daily fluctuations in engagement rate.
Focus on the metrics that actually matter:
Are you acquiring customers?
Are you acquiring them profitably?
Are those customers valuable over time?
Everything else is commentary.
The brands winning in performance marketing aren't the ones with the best impression numbers or the most followers. They're the ones who understand their unit economics, optimize for profitability, and make decisions based on metrics that actually drive business outcomes.
That's the difference between looking good in a meeting and actually growing a business.
At Claudia Giraldo Creative, we focus ruthlessly on metrics that matter. We'll happily sacrifice a "pretty dashboard" for one that actually helps you make smart decisions. Because at the end of the day, you can't deposit impressions, followers, or engagement rates in the bank.
You can only deposit revenue.
Want a marketing partner who focuses on metrics that actually drive business growth? I build campaigns optimized for profitability, not vanity. Let's discuss your metrics framework.
