You cannot manage what you do not measure. These 10 metrics are the difference between businesses that scale and those that plateau. Start tracking them today.
1. Monthly Recurring Revenue (MRR)
MRR is the predictable, recurring revenue your business earns every month. It's the lifeblood of subscription businesses. Formula: MRR = Average Revenue Per User × Number of Active Subscribers
2. Customer Acquisition Cost (CAC)
CAC tells you how much it costs to acquire one new customer. Formula: CAC = Total Marketing & Sales Costs / Number of New Customers Acquired
A good rule: your LTV (see below) should be at least 3× your CAC.
3. Customer Lifetime Value (LTV/CLV)
LTV is the total revenue a customer generates over their entire relationship with your business. Formula: LTV = Average Purchase Value × Purchase Frequency × Customer Lifespan
4. Churn Rate
Churn rate measures the percentage of customers who stop using your service in a given period. Even small improvements in churn dramatically improve profitability.
5. Gross Profit Margin
Gross margin shows how efficiently you deliver your product/service. Formula: Gross Margin = (Revenue - COGS) / Revenue × 100
6. Net Promoter Score (NPS)
NPS measures customer satisfaction and loyalty by asking: "How likely are you to recommend us?" Score ranges from -100 to 100. Above 50 is excellent.
7. Return on Investment (ROI)
ROI measures the profitability of investments. Use our free ROI Calculator to calculate this instantly for any campaign or investment.
8. Conversion Rate
The percentage of visitors/leads who take the desired action (purchase, sign-up, etc.). Formula: Conversion Rate = (Conversions / Total Visitors) × 100
9. Average Order Value (AOV)
AOV is the average amount a customer spends per transaction. Increasing AOV by just 10% can have a massive impact on revenue without increasing traffic.
10. Burn Rate (for startups)
Burn rate is how quickly a startup spends its cash reserves. Formula: Monthly Burn = Starting Cash - Ending Cash. Runway = Cash on Hand / Monthly Burn
Building Your Metrics Dashboard
Don't try to track all 10 at once. Start with 3-5 metrics most relevant to your stage:
- Early stage: CAC, Conversion Rate, MRR growth
- Growth stage: LTV, Churn Rate, Gross Margin
- Scale stage: NPS, AOV, Burn Rate