You need three numbers, not thirty: what a new customer costs you, what they are worth in total, and how much reaches the till for every euro of advertising.
Everything else — impressions, likes, rankings — are intermediate indicators. Useful for working out what is going wrong, useless for deciding whether to carry on.
Not sure you are measuring properly?
Tell us what tools you have set up and we will tell you what is missing before the numbers mean anything.
The three numbers
| Metric | Formula | What it tells you |
|---|---|---|
| CAC (customer acquisition cost) | Total marketing cost ÷ new customers | What you pay per customer |
| LTV (lifetime value) | Average order value × orders per year × years × gross margin | What they are worth in total |
| ROAS | Revenue from ads ÷ ad spend | Return per euro |
The rule to hold on to: LTV to CAC of at least 3 to 1. Below 2 to 1, the model does not hold. Above 5 to 1, you are probably leaving growth on the table by underspending.
A caution on CAC: it includes all marketing cost, not just the ad spend. Tools, freelancers, your own time.
What ROAS you actually need
ROAS on its own says nothing. You need your break-even point, which depends on your gross margin.
The formula: 1 ÷ gross margin.
| Gross margin | Break-even ROAS |
|---|---|
| 20% | 5.0× |
| 30% | 3.3× |
| 40% | 2.5× |
| 50% | 2.0× |
| 60% | 1.7× |
If your margin is 30% and your ROAS is 3.0×, you are losing money — even though the dashboard is showing green.
Which is why two businesses with identical ROAS can be one profitable and one paying for the privilege of selling.
The attribution problem
The customer saw an ad, then searched your name on Google, then asked a friend, then bought three weeks later. Which channel earned it?
Every platform answers “me”. Which is why adding up the sales each tool reports gives you more sales than you actually made.
The three approaches, from most optimistic to most honest:
- Platform numbers. Fine for comparing campaigns against each other, not for the overall picture.
- Your own site data. Independent of any platform — see how to set it up in Google Analytics for beginners.
- Blended ROAS: total revenue ÷ total marketing spend. The harshest and the most useful.
And one question that does the work of ten tools: “How did you find us?” at checkout or on the phone. The answers are imperfect, but they surface things no cookie ever catches.
The table you need each month
One sheet, eight rows. Nothing more.
| Row | Where it comes from |
|---|---|
| Total marketing spend | Sum of invoices and subscriptions |
| New customers | From your order system or CRM |
| CAC | Spend ÷ new customers |
| Total revenue | From your books |
| Blended ROAS | Revenue ÷ spend |
| Average order value | Revenue ÷ orders |
| Repeat customer share | Customers who bought again |
| “How did you find us” | The month’s answers |
Row seven is the one showing the health of the business. If repeat purchases are not rising, marketing is filling a leaking bucket — see what fixes that in increasing sales without advertising.
How often to look at what
The most common mistake is checking daily on numbers that only make sense monthly.
| Frequency | What you look at |
|---|---|
| Daily | Only if something has broken |
| Weekly | Spend, orders, ROAS per campaign |
| Monthly | CAC, blended ROAS, average order value |
| Quarterly | LTV, repeat rate, budget allocation |
Making daily decisions on three days of fluctuation is the fastest way to wreck a campaign that was working.
Want the monthly table ready-made?
Ask us for the template and we will send it adapted to your channels.
Channels are not measured the same way
Advertising produces a result today and stops when you stop. SEO and content produce results in months and keep going.
| Channel | Time to return | How it is measured |
|---|---|---|
| Paid advertising | Immediate | ROAS, CAC |
| SEO | 4–8 months | Organic traffic, conversions |
| Immediate | Revenue per send | |
| Unpaid social | Slow | Awareness, referrals |
Comparing SEO and advertising on the same metric in month three is like comparing rented premises with premises you are buying. The comparison is done properly in Google Ads vs SEO.
Frequently asked questions
I do not have an e-shop, how do I measure?
Through calls, forms and visits. Assign a value per enquiry: if 20% close and the average sale is €500, each enquiry is worth €100.
Why does Meta report more sales than Analytics?
Different attribution models. Meta counts view-through conversions too — see what that means in Facebook & Instagram Ads.
How much should I spend on marketing?
Typically 5%–15% of turnover, depending on sector and growth stage. Start from what your CAC can bear.
How do I calculate LTV if I am new?
From your first months’ data with a conservative assumption. Revise it every quarter.
Is an attribution tool worth paying for?
Below €3,000 a month in spend, no. Blended ROAS and the “how did you find us” question cover it.
The first step
Take last month and work out two numbers: total marketing spend and new customers. Divide.
That number is your CAC. If it is larger than the gross profit a customer leaves behind, you have the most important piece of information of the year.
Next step
Book a free 30-minute call with the team at The Dev Alley. We will look at what you measure today and build the picture you need.