Let’s be honest, running a successful digital business is hard.

Less than 2% of the visitors who come to your website will ever buy your product. For most industries, 95% of these customers are one-off buyers, meaning they’ll never return. Most small businesses cannot realize the true impact of these numbers because they are more focused on tracking vanity marketing metrics like total visitor count and social media followers.

Vanity metrics are misleading and rarely determine how many sales you will make. Viral marketing can increase follower count and include people in your audience who may not always be interested in what you are offering.  A more reliable marketing metric like the number of followers engaged in your post is a better measure for progress.

Let’s discuss three major marketing metrics that can significantly affect the bottom line of your small business and help you build a better marketing strategy.

Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) helps you measure the cost of winning one customer. It is an important metric that directly affects your profit margin.

By tracking this metric, you can tell when your business is spending too much on customer acquisition. While most thriving businesses invest approximately 25% of their sales revenue on acquiring new customers, you should ensure that your customer’s lifetime profit margin exceeds the CAC.

A clear measure of the CAC can help you find ways to reduce sales costs and improve your margin. A simple tactic to track customer acquisition cost is by using a simple formula:

CAC = (total marketing costs) / (# of new customers acquired)

Customer Retention Rate

The customer retention rate is the percentage of gained customers returning to do business with you over a specific time period.

This customer retention rate is a metric that helps you measure customer loyalty (loyal customers can generate up to 95% of your business’s revenue). It costs up to 25 times more to acquire a new customer than to keep a satisfied customer.

Retained customers can be significant assets to your business as they can be a great source for referrals, which generate free customer acquisition. You can even increase your email marketing ROI (proven to yield up to $40 for every $1 invested, when used effectively) by using email campaigns to re-market to previous customers to engage your subscriber list.

The customer retention rate is important to keep a close eye on when starting a digital business, because when customers stop doing business with you, it’s a sign that something may be wrong. This metric will keep you on your toes, ensuring that you serve your customers in the best way possible.

A viable way to track your customer retention rate is with this formula:

Customer Retention Rate = (total number of customers at the conclusion of a specific time period – newly acquired customers in the time period) / (total # of customers at the start of the time period) ×100

The percentage you get from this equation will represent the proportion of customers who remained active during the measure period.

Customer Relationship Management tools (CRMs) are excellent ways to track and improve customer retention. Hubspot states that using CRMs can improve your customer retention rate by up to 25%.

With a solid CRM, customer information is stored and retrieved whenever you need it. You can see what products they have ordered in the past and how long they have been doing business with you. Use this data to find opportunities to serve your customers and find areas where you are losing engagement.

Website Bounce Rate

Instead of tracking the number of people visiting your website, it is more beneficial to track the bounce rate. Google states, “a bounce is a single-page session.” This means that a bounce occurs when a customer visits your website and does not interact with it (nothing was clicked).

People need to spend some time on your website to see what you’re offering, let alone make a purchase.

Typically, service businesses and ecommerce stores report lower bounce rates than blogs and landing pages. Track this metric to ensure your bounce rate stays below the benchmark for your industry and business type.

A good tool to track your website’s bounce rates is Google Analytics, which presents various website-focused metrics, including click-through details. Use A/B testing to try different headlines, Call-To-Actions (CTAs) to see what type of content best engages your visitors.

Comparing the varying bounce rates from different traffic channels will help you invest smartly in the right networks, but don’t be surprised if you find your bounce rates from social media to be on the high side.


Marketing your business will get you more customers, but tracking your progress with reliable data will keep you in business.

Instead of tracking social media followers and website visits, it’s time for you to start looking at the marketing metrics that matter most.