Get BIG ◦ II

We’re all playing the same game.

Hustle for a month, obsess over a few metrics, report, repeat.

What does that incentivize? Leaning on metrics that tend to look good, even if they’re meaningless.

Growth-driven marketing isn’t about the looks—it’s about moving the needle on revenue, profitability, and long-term business success.

Rowan Tonkin, CMO of Planful, puts it best:
"Marketing needs to directly support business objectives. It’s not about vanity metrics—it’s about outcomes that align with company goals and make financial sense."

Your marketing efforts should serve the company’s broader goals, often defined by OKRs (Objectives and Key Results).

What OKRs really are: aspirational goals your entire company is working toward. No matter the team. This helps avoid dispersing efforts as they all chase their traditional metrics without thinking of the greater contribution to the company. 

How they’re set up: “We will achieve [Objective], measured by this [Key Result]”

How that affects marketing (you): take an example OKR, say: “We will increase ARR by 30%”. 

Now, it is up to you to figure out how marketing can contribute to this OKR.

In this case, defining and acquiring customers with high-LTV is one way to do it → that’s your KPI. 

You can also use the OKR to health check your current marketing strategy. Do your current KPIs contribute to the OKR you set?

Ensuring marketing is making a profitable contribution to your business is, actually, essential. 

Plus, stakeholders will never truly be at ease until they see this reasoning.

Here are some of the financial basics for marketing.

1. Customer Acquisition Cost (CAC) and Lifetime Value (LTV)

Why it Matters:
Customer Acquisition Cost (CAC) tells you how much it costs to acquire a single customer, while Lifetime Value (LTV) estimates how much revenue that customer will generate during their relationship with your business. Together, these metrics reveal whether your campaigns are driving sustainable growth or draining resources.

How to Calculate:

• CAC: Divide total marketing spend by the number of new customers acquired.
  Example: If you spend $10,000 and acquire 50 customers, your CAC is $200.

• LTV: Multiply the average purchase value by purchase frequency and the average customer lifespan.

How to Apply:

• Compare CAC to LTV: If CAC is greater than LTV, rethink your strategy.

• Segment customers by profitability: Identify segments with higher LTV – you can spend more to get more like these. 

2. Return on Ad Spend (ROAS)

Why it Matters:
ROAS measures the revenue generated for every dollar spent on advertising. It’s a direct indicator of campaign performance, making it easier to justify ad budgets and optimize future spending.

How to Calculate: ROAS = Revenue from Ads / Ad Spend

Example: If a $1,000 Facebook campaign generates $4,000 in revenue, your ROAS is 4x.

How to Apply:

• Use ROAS to compare channels (e.g., Google Ads vs. Facebook).

• Optimize underperforming campaigns by analyzing click-through rates (CTR) and conversion rates.

• Highlight ROAS in reports to tie campaign outcomes to financial results, a strategy Rowan Tonkin champions​.

🧠 Pro tip: if you advertise a lot, or want to scale it up, consider measuring ad incrementality.

Formula: Average return of each ad / Average cost of production + Average spend per ad.

If it’s below 1, your ad strategy is unprofitable and should be adjusted.

3. Other important ones to wrap your head around

• Customer Retention Rate (CRR)

  • Why it Matters: Retaining customers is cheaper than acquiring new ones, and higher retention boosts LTV.

  • How to Calculate: CRR = [(Customers at End of Period - New Customers Acquired) / Customers at Start of Period] × 100

  • How to Apply: Focus retention efforts on high-LTV customers for better returns.

• Marketing Efficiency Ratio (MER)

  • Why it Matters: A holistic metric that compares total revenue to total marketing spend, showing overall campaign efficiency.

  • How to Calculate: MER = Total Revenue ÷ Total Marketing Spend

  • How to Apply: Use MER to identify whether you're overspending on marketing in relation to your overall revenue.

The raison-d’etre of all the metrics above is to determine the financial viability of your strategy. Stopping at a present-day view is, therefore, a little short-sighted. Extrapolate!

1. Expected Revenue by time: 

Revenue (T) = (Number of Customers Acquired in T × LTV over T) - (Number of Customers Acquired × CAC)

• T can be months, quarters, or years, depending on your retention model.

• Example:

  • Monthly marketing spend: $50,000

  • CAC: $100

  • LTV (12-month): $300

  • Expected 500 customers acquired per month.

  • Forecast for the year:

    • Revenue = (6,000 × $300) - (6,000 × $100) = $1.8M - $600K = $1.2M net profit in 12 months

2. Cash Flow Forecasting for Marketing

Why it matters: Marketing spend can take a while to get paid back by customer purchases. To prepare, use Net Cash Flow — it tracks how much cash you have after (1) marketing spend and (2) revenue generation.

Formula: Net Cash Flow = Cumulative Revenue - Cumulative CAC (Marketing Spend)

Example: You spend $10,000 upfront to acquire customers.

With a breakeven point, you can calculate how much cash you’ll need to front to continue operations until payback. 

• If Payback is Too Long:

  • Aim to lower CAC

  • Increase early revenue through upsells, bundles, or shorter retention periods.

• If Cash Flow Lags:

  • Adjust acquisition pacing (spend slower) to avoid cash gaps.

Other basics

• ROI Forecasting
  Measure the expected return on investment for marketing campaigns.

  • Formula: ROI = (Revenue - Marketing Spend) ÷ Marketing Spend × 100

  • Example: ($20,000 Revenue - $5,000 Spend) ÷ $5,000 × 100 = 300% ROI

• Marketing Funnel Forecasting
  Forecast performance across funnel stages to link metrics to revenue.

  • Formula: Stage Performance = Previous Stage Volume × Conversion Rate

  • Example: 5,000 leads × 20% Conversion Rate → 1,000 MQLs

Start using the ones relevant to your strategy to shed light on what happens next.

Ok so you have a bunch of metrics now. Time to build your report.

Good marketing reports look like:

In the image above, you’ll see a target & current Cost Per Opportunity (CPO) for each successive stage of the marketing funnel. No impressions, no CTRs. 

Here’s how to report for growth:

1. Focus on financial outcomes. Replace the impressions and CTRs with financial talk. 

   1. Bad Reporting: “We had a 12% CTR and 4,000 leads.”

   2. Great Reporting: “This campaign generated $1M in pipeline revenue, with an estimated $250,000 in closed deals.”

2. Align metrics with funnel stage. 

   1. Awareness: Impressions, reach, click-through rates.

   2. Engagement: Leads, Marketing Qualified Leads (MQLs), cost per lead.

   3. Conversion: Pipeline contribution, CAC, ROI.

3. Add context. Explain:

   1. Benchmarks: give points of reference to make it easier to assess your results. 

   2. Spikes and dips: Were they due to seasonality, platform changes, something else?

   3. Adjustments: Explain how you adapted to results along the way. 

4. Format matters. Use tools like Semrush’s Professional Reporting App to automatically pull data and generate polished reports for free.

What worked early in your business lifecycle—when you were capitalizing on untapped demand—won’t work forever. Growth requires new strategies, especially as you scale.

Tonkin’s Advice:

• Early Stages: Focus on bottom funnel, direct conversion campaigns.

• Scaling: Shift toward demand creation—brand-building, new customer acquisition, and long-term strategies.

• Mature Business: Balance retention and acquisition, while optimizing for profitability and repeat revenue.

🧠 Pro tip: see how Preston Rutherford, CMO at Chubbies, breaks down the risk of sticking with early stage strategies as you grow. 

Marketing for growth is different. It requires bridging it with finance, which many can’t or won’t do because sometimes, you don’t want to see the truth.

To drive real growth, align marketing with company OKRs, connect every dollar to financial results, and evolve your strategy as you scale.