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Many brand agencies, social media firms, and product-focused entrepreneurs often overlook KPIs, relying solely on passion. However, if you truly want to stand out—especially in direct response—understanding your data is the key competitive advantage.
When you see what works (and what doesn’t), you’re not just "creating", you’re crafting strategy.
This is what sets Consultmates apart from a typical agency.
To develop the optimal strategies for our clients, we track the following KPIs:
Churn Rate
What is it?
Imagine a bucket with a small hole at the bottom. The water leaking out symbolises churn in business terms. Churn Rate is the percentage of customers or subscribers who stop using your service or purchasing your product within a certain period.
Why is it Important?
Returning to our analogy, if you’re filling the bucket, you’ll want to plug the leak. Reducing churn is often more cost-effective than acquiring new customers. A high churn rate can indicate customer dissatisfaction, subpar product quality, or effective competition—all issues that require attention.
How to Interpret It
Interpreting Churn Rate is like examining the size of the hole in your bucket. A large hole means a significant loss of customers, signalling a need to reduce that leakage. Even a small leak can be concerning if you can’t fill the bucket faster than it drains. Churn rate should be considered alongside other metrics, such as Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV). For example, if your churn rate is high but acquisition costs are low, it may be less of an issue.
How to Calculate It
The formula for Churn Rate is:
(Number of Customers at the Start of the Period - Number of Customers at the End of the Period) / Number of Customers at the Start of the Period * 100
So, if you started the month with 200 customers and ended the month with 180 customers, your churn rate would be ((200-180)/200) * 100 = 10%. This means that you lost 10% of your customers during that period.
Share of Voice (SOV)
What is it?
Imagine a lively party with many conversations. Share of Voice is the proportion of the conversation that’s about you. It measures how much your brand is mentioned compared to competitors across various platforms like social media, TV ads, and search engines.
Why is it Important?
SOV helps measure your brand’s visibility. Just as being the main topic at a party may boost popularity, a higher SOV indicates dominance in your industry conversation, which could translate to greater brand recognition and customer acquisition.
How to Interpret It
A high SOV shows strong brand visibility, but it’s essential to analyse it along with sentiment and brand health metrics; being talked about isn’t always positive.
How to Calculate It
To calculate SOV, measure the total “voice” in your market (e.g., social mentions or ad spend) and then calculate your brand’s portion:
SOV = (Your Brand’s “Voice”) / (Total Market “Voice”) * 100
A high SOV should be positive, so monitor not just quantity but quality.
Same Store Sales
What is it?
Same Store Sales (or comparable sales) is a measure used to track the performance of established stores over time, helping assess growth without new store openings.
Why is it Important?
This metric reveals the health of a business’s core operations. Growing same store sales mean growth within existing locations, whereas declines may indicate issues needing attention.
How to Interpret It
Increasing same store sales reflect an improving performance of current locations. Declines suggest potential problems, which should be examined alongside factors like market trends and competition.
How to Calculate It
To calculate Same Store Sales growth:
Choose comparable time periods (e.g., this year vs. last year).
Subtract previous period sales from current period sales.
Divide by previous period sales.
Multiply by 100 to obtain the percentage change.
Only include stores open during both periods for an accurate comparison.
Clicks to Your Order Form (CTR-OF)
What is it?
CTR-OF is the percentage of visitors clicking through to your order form, crucial for measuring interest in purchasing.
Why is it Important?
A higher CTR-OF indicates effective marketing and a compelling website or ad experience, funnelling visitors toward purchase. It’s a key metric to analyse alongside conversion rates.
How to Interpret It
High CTR-OF shows customer interest in purchasing, but if conversion is low, the order form may need optimisation.
How to Calculate It
CTR-OF = (Clicks to the Order Form) / (Total Clicks to Sales Page) * 100
Higher percentages typically indicate effective engagement strategies, though they must align with business goals.
Customer Retention Cost (CRC)
What is it?
CRC is the total spent to retain customers, from loyalty programmes to support initiatives. It’s akin to the effort needed to keep guests returning to your party.
Why is it Important?
It’s often more economical to retain customers than acquire new ones. Knowing CRC helps assess the cost-effectiveness of your retention strategies.
How to Interpret It
A low CRC generally suggests cost-effective retention, but it must align with Customer Lifetime Value (CLTV) and churn rates. If retention costs are low yet churn is high, strategies may need revision.
How to Calculate It
CRC = (Total Retention Costs) / (Number of Customers Retained)
Calculate this metric for a specific period to ensure consistency in comparisons with other KPIs.
By carefully monitoring these KPIs, Consultmates builds data-driven strategies that consistently deliver results, helping clients not only meet but exceed their business goals.
Daily or Monthly Active Users (DAU and MAU)
What it is?
Consider your business as a park. Daily Active Users (DAU) and Monthly Active Users (MAU) measure how many unique visitors engage with your “park” (your digital platform or app) on a daily and monthly basis. DAU counts individual users active within a single day, while MAU tracks those who interact with your platform at least once in a month.
Why it is Important?
Understanding DAU and MAU helps gauge your platform’s popularity and stickiness—how often users return and how engaging your content is. These metrics are crucial for user growth and retention strategies, offering insight into the consistency and appeal of user interactions.
How to Interpret It
A high DAU or MAU suggests a compelling product with frequent engagement. Growth over time indicates a growing user base. A significantly lower DAU than MAU, however, might mean users engage monthly but lack daily engagement, highlighting potential issues with user retention. The ‘stickiness’ ratio (DAU/MAU) measures the percentage of monthly users who are daily users, offering a deeper insight into user loyalty.
How to Calculate It
DAU and MAU involve counting unique users who perform at least one action (e.g., logging in, making a transaction) within the respective time period. Analytics platforms typically track this user activity, ensuring that only unique users are counted, not repeated actions by the same user.
Foot Traffic
What it is?
Imagine your business as a lively party. "Foot traffic" in retail represents the number of visitors entering your store, much like party attendees. It provides an estimate of potential customers over a set period.
Why it is Important? As a party is incomplete without guests, a store relies on visitors to drive sales. Monitoring foot traffic offers insights into customer attraction, aids in staff scheduling, and helps plan promotions. Foot traffic changes are also used to gauge the effectiveness of non-direct response advertising, like television ads.
How to Interpret It
High foot traffic suggests your store is drawing interest. However, high traffic without corresponding sales may indicate issues such as unsuitable product offerings, pricing, or store layout.
How to Calculate It Foot traffic typically involves counting the people entering a store. Many stores use digital counters or location tracking via mobile devices. Alternatively, manual counts can be done, though impractical for large stores. Comparing foot traffic to purchases gives a conversion rate, a key performance metric. Allowable Cost Per Acquisition (ACPA)
What it is? Think of ACPA as a spending budget per new customer. If hosting a party, you might set a maximum budget per guest. In marketing, ACPA defines the most you’re willing to spend to acquire a new customer through a specific campaign or channel.
Why it is Important?
ACPA ensures that acquisition costs don’t exceed the value customers bring. Spending within this limit helps maintain profitability and guide marketing investments.
How to Interpret It
If your actual Cost Per Acquisition (CPA) is consistently below your ACPA, you’re spending efficiently and can consider increasing investment. If CPA exceeds ACPA, adjustments are needed to make acquisition more cost-effective. Context matters too—a higher ACPA might be acceptable for high-lifetime-value customers or during an awareness phase.
How to Calculate It Using Gross Margin and Desired Profit If average gross margin per sale and target profit are known: ACPA = Gross Margin per Sale - Desired Profit per Sale Average Cart Value (ACV)
What it is?
In an e-commerce context, ACV is the average amount spent per transaction. It’s akin to the value of items a customer fills in their cart in a grocery store.
Why it is Important?
ACV reveals spending patterns and informs strategies to boost revenue without requiring additional customers—often a more cost-effective growth method.
How to Interpret It
A higher ACV suggests customers are purchasing more or higher-value items, while a lower ACV may mean fewer or lower-cost items per transaction. Examining ACV alongside transaction volume and total revenue gives a fuller picture of customer behaviour.
How to Calculate It
ACV = Total Revenue / Number of Transactions. For example, £10,000 in revenue from 200 transactions results in an ACV of £50, meaning the average customer spends £50 per visit.
Cart Abandonment Rate
What it is?
Cart Abandonment Rate measures the percentage of customers who add items to their cart but exit without purchasing.
Why it is Important?
This metric sheds light on potential checkout issues. Identifying and resolving these issues can improve conversion rates and revenue.
How to Interpret It
A high Cart Abandonment Rate may indicate a problematic checkout process, like unexpected fees, a complex checkout, or limited payment options. A low rate suggests a smooth, user-friendly checkout.
How to Calculate It
Cart Abandonment Rate = (1 - (Completed Transactions / Created Carts)) * 100
For example, 100 carts with only 25 completed purchases yield a 75% abandonment rate.
Earnings Per Click (EPC)
What it is?
EPC represents the average earnings per click on an ad or affiliate link, similar to the profit from each visitor brought to your lemonade stand.
Why it is Important?
EPC is a profitability metric for pay-per-click and affiliate campaigns. It shows whether click-driven traffic is translating into revenue.
How to Interpret It
A high EPC means clicks are resulting in revenue, while a low EPC indicates clicks may not be converting into profitable actions. For cost-effectiveness, EPC should ideally be higher than Cost Per Click (CPC).
How to Calculate It
EPC = Total Earnings / Total Clicks
For example, £100 earned from 200 clicks equals an EPC of £0.50 per click.
Lead-to-Customer Rate
What it is?
This rate shows the percentage of leads converted into actual customers, similar to turning raw materials into finished products on a factory line.
Why it is Important?
A high Lead-to-Customer Rate indicates effective sales and marketing efforts, maximising ROI on customer acquisition.
How to Interpret It
A high conversion rate suggests a productive sales process, while a low rate could signal lead quality issues or an inefficient sales process.
How to Calculate It
Lead-to-Customer Rate = (New Customers / Leads) * 100
For instance, if 1,000 leads result in 250 new customers, the conversion rate is 25%. Lead-to-Customer Rate
What is it?
Think of the Lead-to-Customer Rate as part of a production line in a factory. Your business, like the factory, receives raw material (leads) at one end, and the goal is to convert this raw material into a finished product (customers). The Lead-to-Customer Rate reflects how many of these leads are successfully turning into actual customers.
Why is it Important?
Just as a factory aims to optimise its production process to maximise output from its raw materials, businesses strive to enhance their Lead-to-Customer Rate. A higher rate indicates that sales and marketing efforts are paying off, reflecting efficient use of resources and a strong return on investment.
How to Interpret It
If the factory is churning out lots of finished goods (high Lead-to-Customer Rate), that’s a sign of an effective process. A low rate, however, suggests room for improvement—perhaps the raw material quality is lacking, or the machinery requires adjustment. Similarly, a low Lead-to-Customer Rate in your business might point to issues with lead quality or your sales process.
Are the right leads being attracted? Is your sales approach engaging enough to convert them into customers?
How to Calculate It
The Lead-to-Customer Rate is calculated by comparing the number of leads that convert to customers to the total number of leads.
Lead-to-Customer Rate = (Number of New Customers / Number of Leads) * 100
For example, if you had 1,000 leads and 250 converted into customers, the Lead-to-Customer Rate would be (250/1,000) * 100 = 25%, meaning you successfully converted 25% of leads into customers.
Open Rate (OPEN%)
What is it?
The Open Rate is akin to the number of people who open and read a letter you’ve posted. In email marketing, it represents the percentage of recipients who open and likely read your emails.
Note: The Open Rate can sometimes be an unreliable metric due to automated actions by Apple, Google, and other email providers, which may create an inflated sense of engagement. Focusing on clicks or responses often yields a more accurate measure of real interest.
Why is it Important?
A high Open Rate signals that your subject lines are effective and your emails are reaching recipients at the right time. This metric is a fundamental indicator of how well your emails resonate with your audience.
How to Interpret It
If only a small fraction of recipients open your emails, this could imply that subject lines aren’t compelling enough, or that emails aren’t landing at an ideal time. However, Open Rate alone doesn’t offer the complete picture—it’s important to also look at Click-Through Rate (CTR), Conversion Rate (CR%), and Bounce Rate for a more rounded view.
How to Calculate It
Calculate the Open Rate by dividing the number of emails opened by the total number of emails sent.
Open Rate (OPEN%) = (Total Emails Opened / Total Emails Sent) * 100
For example, if 1,000 emails were sent and 200 were opened, the Open Rate is (200/1,000) * 100 = 20%, meaning 20% of recipients opened the email.
Return on Ad Spend (ROAS)
What is it?
Return on Ad Spend (ROAS) is like a performance review for advertising campaigns, showing how much revenue is generated for every dollar spent. For example, a ROAS of 5% indicates that every £100 spent on advertising yields £5 in revenue.
Why is it Important?
Similar to a car’s fuel efficiency, ROAS tells you how far your ad budget takes you. A high ROAS indicates an efficient ad campaign, helping you decide where best to invest your marketing funds.
How to Interpret It
If one campaign has a ROAS of 5% and another has a ROAS of 2%, the first campaign provides more "mileage" for your investment. However, ROAS shouldn’t be the only metric to assess. Campaigns with lower ROAS may still be valuable if they attract high-value or long-term customers. Also, ROAS doesn’t account for profit margins; a campaign with high revenue but high costs might not be as profitable as it appears.
How to Calculate It
Calculate ROAS by taking the revenue generated from an ad campaign and dividing it by the campaign’s cost.
ROAS = (Revenue from Ad Campaign - Cost of Ad Campaign) / Cost of Ad Campaign
For example, if a campaign generated £6,000 in revenue at a cost of £5,000, the ROAS would be (£6,000 - £5,000) / £5,000 = 0.20, or 20%.
Customer Acquisition Cost (CAC)
What is it?
Customer Acquisition Cost (CAC) is the amount spent to acquire a new customer. It reflects the marketing and sales resources required to bring each customer on board.
Why is it Important?
Just as you’d want the entry fee to an event to be worthwhile, you want your CAC to be lower than the long-term value a new customer brings. High CAC could indicate inefficient strategies or the need for a more valuable offering.
How to Interpret It
A high CAC compared to expected revenue suggests that current strategies might need adjusting. CAC is also useful when considered alongside metrics like Lifetime Value (LTV), where a high CAC can be acceptable if a customer’s long-term value is substantial.
How to Calculate It
To calculate CAC, divide the total cost of marketing and sales by the number of new customers.
CAC = (Total Marketing and Sales Costs) / Number of New Customers
For example, if you spend £10,000 on marketing and acquire 100 customers, your CAC is £10,000 / 100 = £100.
Cost Per Acquisition (CPA)
What is it?
Cost Per Acquisition (CPA) reflects the cost of acquiring a new customer or encouraging an action (such as signing up or purchasing). While similar to CAC, CPA often applies to specific campaigns or channels.
Why is it Important?
Think of CPA as the price of a ticket; you want to ensure the investment is worthwhile based on the return. CPA offers insight into the cost-effectiveness of campaigns and helps optimise resources.
How to Interpret It
A high CPA, in relation to customer revenue, suggests campaigns may need optimisation. As with other metrics, consider CPA alongside Lifetime Value (LTV) to gauge its true value.
How to Calculate It
Calculate CPA by dividing the total marketing cost by the number of acquisitions.
CPA = (Total Marketing and Sales Costs) / Number of Acquisitions
For instance, if £5,000 spent on marketing yields 50 customers, your CPA is £5,000 / 50 = £100.
Customer Lifetime Value (LTV or CLTV)
What is it?
Customer Lifetime Value (LTV) represents the total revenue generated from a customer over their entire relationship with the business. It’s similar to the total yield from a fruit tree in your garden: the more fruitful the tree (customer), the higher the LTV.
Why is it Important?
LTV helps ensure that the initial cost to acquire a customer is justified by their long-term value. A high LTV indicates a profitable customer base, justifying ongoing investments in acquisition and retention efforts.
How to Interpret It
A high LTV indicates loyal, high-value customers who are worth the investment. Smaller customers may also add value through referrals or brand loyalty, contributing indirectly to revenue.
How to Calculate It
To calculate LTV, multiply the average value of a sale by the average purchase frequency and average retention period.
LTV = (Average Value of a Sale) x (Number of Repeat Transactions) x (Average Retention Time)
For example, if a customer spends £50 per purchase, makes 2 purchases a month, and stays for 3 months, LTV is £50 x 2 x 3 = £300.
Conversion Rate (CR%)
What is it?
The Conversion Rate (CR%) is the percentage of users completing a targeted action (purchase, sign-up, etc.) after being engaged by marketing efforts. Each "conversion" reflects a successful interaction with your marketing message.
Why is it Important?
Much like attendance at an event, a high Conversion Rate suggests your marketing is compelling. Low rates may indicate areas for improvement in messaging or user experience.
How to Calculate It
To calculate the Conversion Rate, divide the number of conversions by total visitors, then multiply by 100.
Conversion Rate = (Number of Conversions / Total Visitors) * 100
For instance, if 200 people visited your website and 50 made a purchase, the Conversion Rate would be (50/200) * 100 = 25%.
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