As Australian SMEs plan their marketing for the coming year, understanding which metrics truly matter is crucial. It’s easy to get lost in vanity numbers – likes, followers, website visits – but these don’t always translate to increased revenue. We focus on metrics that demonstrate a clear return on investment and contribute to profitability. Forget chasing everything; concentrate on what drives business growth.
The first, and arguably most important, metric is Customer Acquisition Cost (CAC). This tells you how much you’re spending to gain a new customer. Calculate it by dividing your total marketing spend by the number of new customers acquired in the same period. Knowing your CAC allows you to assess the efficiency of your campaigns and identify areas for optimisation. If your CAC is rising, it’s a signal to analyse your strategies.
Next, we need to look at Customer Lifetime Value (CLTV). This predicts the total revenue a single customer will generate throughout their relationship with your business. A higher CLTV justifies a higher CAC, meaning you can invest more in acquiring customers knowing they’ll be profitable in the long run. Improving customer retention is a fantastic way to boost CLTV.
Don’t overlook Marketing Qualified Leads (MQLs) and their conversion rate to sales. An MQL is a lead who has shown enough interest to be considered worth pursuing by your sales team. Tracking MQLs helps you understand which marketing activities are attracting the *right* kind of attention. More importantly, monitor how many MQLs actually become paying customers – this conversion rate is a key indicator of marketing effectiveness.
Finally, Return on Ad Spend (ROAS) is vital if you’re using paid advertising. It’s a simple calculation: revenue generated from ads divided by the cost of those ads. A ROAS of 4:1 means you’re generating $4 in revenue for every $1 spent. Regularly monitoring ROAS across different platforms (Google Ads, Facebook, etc.) allows you to allocate your budget to the most profitable channels. As platforms evolve, expect to refine your ROAS targets into 2026 and beyond.
Tracking these four metrics – CAC, CLTV, MQL conversion rate, and ROAS – will give you a solid understanding of your marketing performance and its impact on profitability. Start by implementing systems to accurately measure these numbers, then regularly review and adjust your strategies based on the insights you gain. The outcome? Smarter marketing spend and a healthier bottom line.
