Marketing KPIs: Which Metrics to Track (and Which to Ignore)

Marketing dashboards tend to accumulate metrics the way attics accumulate boxes — things get added and nothing gets removed. The result is a dashboard that's comprehensive and useless. Here's how to identify the metrics that actually matter.

The KPI filtering test

A metric is a KPI (key performance indicator) only if it meets three criteria:

It connects to a business outcome. The metric should have a clear, articulable relationship to revenue, profit, or strategic objectives. "Instagram followers" usually fails this test — more followers don't reliably produce more revenue. "Email subscribers who convert to customers within 90 days" passes.
It changes in response to your actions. A metric you can't influence isn't a KPI — it's a weather report. "Organic search traffic" passes because your content and SEO efforts influence it. "Industry growth rate" fails because you can't change it.
It prompts a decision when it moves. If the metric goes up or down, you should know what to do differently. If a metric moves and your response is "huh, interesting" with no follow-up action, it's not a KPI — it's trivia.

The minimum viable KPI set

For most marketing operations, the essential KPIs fit on one page:

Acquisition efficiency: Cost per lead or cost per acquisition, by channel. This tells you whether your demand generation is working and which channels produce the most efficient results.

Pipeline velocity: How fast leads move through your funnel. If velocity is increasing, your marketing and sales processes are becoming more efficient. If it's decreasing, something is creating friction.

Conversion rate by stage: The percentage of people who move from one funnel stage to the next. This identifies where the funnel is leaking — the stage with the steepest drop-off.

Customer acquisition cost (CAC): Total marketing and sales cost divided by new customers acquired. This tells you whether your growth is economically sustainable.

Customer lifetime value (LTV): Average revenue generated by a customer over their relationship with your business. Combined with CAC, this is the most important ratio in marketing: LTV/CAC. A ratio below 3 suggests underinvestment in either acquisition or retention. Above 5 suggests you might grow faster by increasing acquisition spend.

Metrics to demote

Vanity metrics: Followers, likes, page views without conversion context. These go up with almost any activity. Going up doesn't mean you're succeeding.
Proxy metrics: Metrics that stand in for things you actually care about but can't easily measure. "Engagement rate" as a proxy for "audience quality." The proxy drifts from the thing it's proxying for over time.
Platform-reported attribution metrics: ROAS, conversion value, etc., as reported by Google, Meta, or any platform that both runs your ads and reports on their performance. These numbers are directionally useful and systematically optimistic. Treat them as estimates, not facts.