Marketing tools are built to impress you with data. Impressions in the millions. Follower counts trending up. "Engagement" scores with colorful charts. None of this tells you whether your marketing is producing revenue. At $2M–$20M, you don't need more data — you need less, focused on the right things. Here are the three numbers that do 90% of the work.
The three that matter
1. Cost per Acquired Customer (CAC), by channel
Not cost per lead. Not cost per click. Cost per actually-acquired customer, measured honestly.
Formula:
CAC by channel = Total channel spend ÷ Customers acquired through that channel
"Total channel spend" means everything: media spend + tool cost + the labor cost of the person managing it. If Google Ads is $8,000/month in media + $200 in software + $2,000 of your marketer's time (20% allocation at $120K salary) = $10,200. If that produced 30 closed customers that month, CAC is $340.
This is the number to watch. If CAC is rising month over month on a channel, something's wrong. If it's steady or declining, the channel is healthy.
Track by channel, weighted rolling 3-month average. Monthly numbers are too noisy.
2. Customer Lifetime Value (LTV), by segment
A customer isn't worth what they paid on their first job. They're worth the total they'll pay you over years. LTV is the estimate of that total.
Simple formula:
LTV = (Average first job value) + (Average repeat revenue) + (Average referral revenue attributed)
For most home services businesses, LTV is 1.5–3x the first-job revenue. Customers come back for seasonal service, future repairs, or additional work. They refer neighbors. A $2,500 first job often becomes $5,000–$7,000 over 5 years.
Segment LTV by customer type or source. A referral customer has higher LTV than a HomeAdvisor customer, not just because of lower CAC but because they close at higher rates on repeat and refer more.
LTV is harder to calculate precisely; most businesses approximate using historical data. Start rough and refine over time. A rough number you can move based on is better than a perfect number you can't calculate.
3. LTV:CAC ratio by channel
The combined number that tells you if a channel is profitable, and how profitable.
LTV:CAC ratio = LTV ÷ CAC
Rule of thumb:
- Under 1:1 — You're losing money on this channel. Cut it.
- 1:1 to 2:1 — Breakeven. Channel is a wash. Shrink or fix.
- 3:1 — Solid. Healthy channel. Keep running, maybe grow.
- 4:1 or higher — Excellent. Invest more here.
- Over 10:1 — You're under-investing. Something's working you're not leveraging fully.
A healthy home services business usually has: referrals at 20:1 or more, Google Ads at 3:1 to 5:1, purchased leads at 1:1 to 2:1 (sometimes worse). This ratio tells the whole story in one number.
When a channel's LTV:CAC ratio degrades over time, something's shifting: competition, ad auction prices, lead quality, close rate. Investigate immediately.
The vanity metrics to ignore (or deprioritize)
Impressions and reach
Tells you how many people saw your ad or content. Feels big. Doesn't predict revenue. Two million impressions that produced 30 leads is worse than 100,000 impressions that produced 300 leads, despite looking like a 20x bigger number.
Use for context (did this campaign get exposure?) but never optimize to it.
Clicks, CTR, engagement rate
Clicks are the output of your ad. They're not leads. A campaign with high CTR and zero conversions means your ad creative is strong but the offer, landing page, or audience is wrong.
Engagement rate on social (likes, comments, shares) is almost purely a vanity metric at your scale. High engagement feels nice. It almost never predicts lead volume for home services.
Follower growth
Mostly irrelevant. 5,000 followers on Instagram doesn't predict anything about your business. 500 local, engaged followers who interact with your content is worth more than 10,000 random followers.
If you're tracking it, track follower quality (local, relevant), not follower count.
Keyword rankings
Useful for understanding trends. Ranking in position 1 for "plumber Denver" is great. Ranking in position 47 for "affordable emergency plumber Denver 24/7 licensed" is not the same thing as not ranking.
Rank tracking gives false precision. A better proxy: organic traffic to commercial pages (the pages designed to produce leads), which incorporates ranking + click-through + relevance.
Total website visits
You want visits that convert. 10,000 random visitors who don't convert is worse than 1,000 high-intent visitors who do. Track conversion rate and lead volume from organic, not raw traffic.
"Estimated ad value" from media mentions or brand lift studies
Agency reports that say "this campaign generated $250,000 in earned media value" are PR storytelling. They're not revenue. Don't use them to justify budget.
The dashboard that runs the business
Boil it down to one sheet. Update monthly. Review for 15 minutes.
Section 1: The three numbers (this month, last month, trailing 3-month average)
- Overall CAC
- Overall LTV (if updated)
- Overall LTV:CAC ratio
Section 2: Channel breakdown (CAC and LTV:CAC by channel)
- Google Ads
- Local SEO / organic
- Referrals
- Customer reactivation
- Each paid lead source
- Other (trade shows, direct mail, etc.)
Section 3: Volume
- Total leads
- Total closed customers
- Close rate
- Average job value
Section 4: Operational health
- Reviews collected this month
- Average rating
- GBP calls/clicks/directions
- New content produced (blog, social, email)
That's the whole dashboard. One sheet. Forty data points max. Updated monthly. Anyone on the team can read it and know what's happening.
The red flags to watch for
Even with the right metrics in place, owners miss warning signs because they look at trends in isolation. Watch for these patterns:
CAC rising while LTV stays flat
Your channels are getting more expensive without producing better customers. Could be competition, algorithm changes, or creative fatigue. Time to investigate specific channels.
Close rate dropping while lead volume grows
More leads but fewer of them becoming customers. Either lead quality is declining (check source mix) or sales process is overwhelmed (check capacity).
Referral % declining
Sign that customer experience is slipping or that the referral system stopped being run. Investigate immediately — referrals are your cheapest customers.
One channel growing while others shrink
Concentration risk. If Google Ads becomes 70% of your leads, one algorithm change could crater the business. Diversify even if current channel is doing well.
Marketing spend up without lead volume up
Spending more for the same or fewer leads. Either a channel is saturated, competitors are outbidding you, or budget is going to channels that don't produce.
How often to review
Weekly: Quick check on CAC and volume by channel. Five minutes. If anything's wildly off, dig in.
Monthly: Full dashboard review. 30 minutes. Make one budget decision based on the data.
Quarterly: Strategic review. 2 hours. Look at LTV trends, channel mix evolution, team performance. Rebalance budget if needed.
Annually: Full reset. Recompute LTV based on latest data, revisit CAC by channel with more sophisticated attribution, set next year's goals.
What to do this week
- Calculate your overall CAC and LTV using last 12 months of data. Rough numbers are fine.
- Break CAC down by your top 5 channels. Include labor cost, not just media cost.
- Compute LTV:CAC ratio for each channel. Identify the strongest and weakest.
- Build the one-sheet dashboard. Use whatever tool you have (Google Sheets is fine).
- Schedule the monthly review meeting. First business day, 30 minutes, calendar it as recurring.
Next week: how to hire your next marketing person — the specific interview process that finds operational marketers, not brand designers.