10 Revenue Marketing Metrics Impacting Your Business Growth

In the ideal world, your marketing efforts must drive traffic to your website and power your revenue growth. Ensure your strategies are aligned with your revenue goals by tracking the most important revenue marketing metrics.

Keep reading to learn more about the revenue metrics that matter!

10 revenue marketing metrics you must track

Here are the top revenue growth marketing metrics you must track (instead of vanity metrics):

1. Predicted revenue

Predicted revenue formula

Predicted revenue = projected income – estimated expenses

Predicted revenue is the estimated revenue you will make in a certain period. It considers past and present data to forecast future revenue for a given period.

Tracking this growth marketing metric is critical because it lets you plan your strategies and investments. If your revenue forecast is high, you can consider increasing your investment.

Expecting a dip in predicted revenue? Plan your contingency.

2. Annual recurring revenue

ARR formula

ARR = total annual subscription and add-ons revenue – revenue lost from cancellations

Annual recurring revenue (ARR) tells you the amount of money you’ll likely earn in a year based on the number of contracts and subscriptions you have. ARR typically doesn’t include one-time payments.

It’s a growth marketing metric that subscription-based companies use. Businesses like software-as-a-service (SaaS) and fitness centers with annual memberships will benefit from tracking their ARR because it helps them forecast their year-over-year revenue growth.

3. Monthly recurring revenue

MRR formula

MRR = number of customers in a month x average monthly revenue per customer

Monthly recurring revenue (MRR) is a metric that measures a business’s expected income in a month.

MRR helps you identify patterns in customer acquisition, retention, and churn by examining the number of customers in each month. As a result, this revenue metric helps you understand your performance and optimize your strategies to improve your revenue.

Like ARR, MRR is best for subscription-based businesses.

4. Marketing-attributed revenue

Marketing-attributed revenue is the money you earn from your marketing efforts. You can look at the revenue generated by your specific campaigns or channels.

With this data, you’ll uncover which campaigns and channels drive the most revenue. This revenue metric provides insights into which efforts and platforms you must focus on, and which aren’t contributing to overall business growth.

There are various ways to measure marketing-attributed revenue. You may attribute a sale or revenue to the first or last customer touchpoint, or you may spread the attribution to all touchpoints equally or unequally.

Attribution tools can help you measure marketing-attributed revenue. Our proprietary growth platform, RevenueCloudFX, can measure your campaign’s performance and contribution to revenue.

5. Customer lifetime value

Customer lifetime value formula

CLV = (average annual revenue from a customer * number of years) – customer acquisition cost for the customer

Customer lifetime value, or CLV, tells you how much revenue you can expect from a customer throughout your relationship. Your CLV gives you an overview of your company’s profitability and relationship with customers.

Is your CLV increasing? Your customers are likely satisfied with your offers and are not churning. As a result, your business is likely to earn more revenue.

On the other hand, a decreasing CLV means you’re getting less revenue from each customer. Find out what’s causing the decline, and take immediate action to prevent further customer churn and win back customers.

Bonus Tool: Free CLV Calculator

6. Average sales cycle length

Average sales cycle length formula

Average sales cycle length = sum of all sales cycle lengths / total number of customers

Average sales cycle length refers to the average amount of time it takes for your prospect to become a customer from the moment they interact with your business. It tells you how quickly you generate revenue and how efficient your sales process is.

Tracking this growth metric lets you analyze your sales cycle and identify bottlenecks in your process. Which touchpoints make your leads cold, and which ease them into the sales pipeline?

By understanding your average sales cycle length and trends, you can optimize your sales process to close deals faster and at a lower cost.

7. Closed deals

The number of closed deals refers to the number of sales that have been completed. When a deal is closed, the sales representative has led a prospect through the sales process and the customer has agreed to purchase.

This metric tells you how efficient your sales team is. Tracking this metric also helps you identify inefficiencies in your sales process so you can provide the necessary coaching for your sales team.

The number of closed deals also provides insights into your sales target and forecasting.

8. Customer acquisition cost

CAC formula

CAC = (cost of sales and marketing to acquire customers) / # of new customers earned

Customer acquisition cost (CAC) is a revenue marketing metric that tells you how much you must spend to win a new customer.

Measuring and tracking your CAC helps you invest the right amount of money in your campaigns to earn leads and convert them into customers. It ensures that you’re neither overspending nor underspending to win customers.

Understanding your CAC also aids in evaluating each strategy’s return on investment (ROI).

9. Customer retention rate

Customer retention rate formula

Retention rate = ((# of customers at the end of the period – # of new customers acquired during the period) / # of customers at the start of the period) * 100

Customer retention rate refers to the percentage of customers who continue to do business with you. It’s an important revenue marketing metric to track for several reasons.

It tells you if your existing customers are satisfied with your products or services that they continue to purchase from you, thus giving you a steady stream of income. Note that retaining customers costs six to seven times less than acquiring new customers.

Tracking this metric informs you if you need strategies to reward loyal customers. A consistently high retention rate indicates customer loyalty.

On the other hand, a decreasing retention rate indicates a decrease in customer loyalty, informing you that you must implement strategies to prevent more customers from churning. Identify the cause of their churn and focus on ways to keep them happy with your offerings.

10. Churn rate

Churn rate formula

Churn rate = (# of people who stopped being customers during a period / # of customers at the beginning of the period) * 100

Churn rate refers to the percentage of customers who stopped purchasing from you during a specific period. This important metric tells you when you’re losing customers, which means you’re also losing revenue.

Tracking this metric lets you see churn trends and analyze what’s causing your customers to churn. Insights from a churn analysis can help you improve your product and customer experience to retain your remaining customers.

Your churn analysis also tells you if some of your churn is natural, so it’s best to look at your new customer acquisition metrics. For example, let’s say you own a dance studio offering classes for kids and adults.

If your business decision was to focus on adult dance classes, you can expect your churn rate to increase as your younger clients will churn. To maintain your revenue growth, however, you must retain your adult clients and acquire new ones.

FAQs on revenue marketing metrics

Got other burning questions about revenue marketing metrics? Let’s answer them here:

Forget vanity metrics. Focus on revenue metrics that boost bottom-line growth

Tracking revenue marketing metrics is critical to ensuring your business remains profitable. These metrics inform your strategies and help you optimize your campaigns so you can make the most of every marketing dollar you invest.

If you need help monitoring the growth metrics that matter to your business, consider partnering with WebFX. We’re a full-service digital marketing agency that has helped our clients generate over $10 billion in revenue. Our team is pumped to deliver the same results for your business.

In addition, you’ll get access to our proprietary software, RevenueCloudFX, which is powered by IBM Watson artificial intelligence (AI). It can help attribute leads and revenue to your campaigns. As a result, you’ll know which campaigns directly impact your revenue growth.

Contact us online or call us at 888-601-5359 to speak with a strategist about our revenue marketing services!