No benchmarks here, on purpose. A “good” CAC or conversion rate depends on your margins, price point, sales cycle and channel mix, and published averages rarely say how they were measured. The useful comparison is your own number against your own baseline. To see how these terms fit together into a scorecard, read How we measure; to run your own figures, use the CAC and LTV calculator.
Market size
TAM (total addressable market)
The total annual revenue available if every possible buyer of your type of product bought from you.
TAM = number of potential buyers × average annual revenue per buyer
It misleads when it is built top-down from a broad industry figure, which produces a large number that no sales plan can reach.
SAM (serviceable available market)
The part of TAM your current product, price, channels and geography can actually serve.
SAM = TAM × share of buyers within your reachable segments, regions and channels
It misleads when the filters are optimistic, for example counting countries where you have no distribution or certification yet.
SOM (serviceable obtainable market)
The share of SAM you can realistically win in a defined period, given competition and your capacity to sell and deliver.
SOM = SAM × realistic market share for the period
It misleads when the share is picked to make a plan work rather than derived from sales capacity, conversion rates and competitor strength.
Acquisition and efficiency
CAC (customer acquisition cost)
The average cost of winning one new customer in a period.
CAC = total sales and marketing cost in the period ÷ new customers acquired in the period
It misleads when salaries, agency fees, tools or sales commissions are left out, which makes acquisition look cheaper than it is.
Blended CAC
CAC calculated across all new customers, whether they arrived through paid media, organic search, referral or direct.
Blended CAC = total sales and marketing cost ÷ all new customers
It misleads when a large organic or repeat base hides a paid channel that is becoming expensive at the margin.
Paid CAC
The cost of a new customer acquired through paid media alone.
Paid CAC = paid media spend (plus directly attributable costs) ÷ new customers attributed to paid media
It misleads because attribution often credits paid channels with customers who would have bought anyway, so it can look better than the true incremental cost.
CAC payback period
The number of months it takes for the gross profit from a new customer to repay what it cost to acquire them.
CAC payback (months) = CAC ÷ (average monthly revenue per customer × gross margin %)
It misleads when calculated on revenue instead of gross margin, or when early churn means many customers leave before payback is reached.
Conversion rate
The share of people or accounts at one stage of a funnel who move to the next.
Conversion rate = conversions ÷ visitors (or sessions, clicks or leads) at that stage × 100
It misleads when the denominator changes quietly, for example switching from users to sessions, or when cheaper, lower-intent traffic pulls the rate down while sales actually rise.
Customer value
LTV (customer lifetime value, CLV)
The gross profit a customer is expected to generate over the whole relationship with your business.
LTV = average revenue per customer per period × gross margin % × expected number of periods retained
For subscriptions: LTV = average monthly revenue per customer × gross margin % ÷ monthly churn rate
It misleads when based on revenue rather than margin, or when a young business projects lifetimes far longer than its own history can support.
LTV:CAC ratio
How much value a customer creates for every unit spent acquiring them.
LTV:CAC = LTV ÷ CAC
It misleads when the LTV is optimistic and the CAC is incomplete; a very high ratio can also mean you are underinvesting and leaving growth to competitors.
Gross margin
The share of revenue left after the direct cost of producing and delivering what you sold.
Gross margin % = (revenue minus cost of goods sold) ÷ revenue × 100
It misleads in marketing maths when returns, discounts, shipping and marketplace fees are excluded from the cost side.
AOV (average order value)
The average revenue per order.
AOV = total revenue ÷ number of orders
It misleads when a few very large orders lift the average, or when bundles raise AOV while lowering margin per order.
Repeat purchase rate
The share of customers who buy more than once within a set period.
Repeat purchase rate = customers with two or more orders ÷ total customers in the period × 100
It misleads when the period is shorter than the natural repurchase cycle; a sunscreen bought once a season will always look weak over thirty days.
Churn rate
The share of customers who stop buying or cancel in a period.
Churn rate = customers lost in the period ÷ customers at the start of the period × 100
It misleads when customer churn is reported without revenue churn, because losing a few large accounts can hurt more than losing many small ones.
Retention rate
The share of customers at the start of a period who are still customers at the end of it.
Retention rate = (customers at end of period minus new customers acquired in the period) ÷ customers at start of period × 100
It misleads when new customers are left in the count, which lets strong acquisition mask weak loyalty.
Media
ROAS (return on ad spend)
Revenue attributed to advertising for every unit of currency spent on it.
ROAS = revenue attributed to ads ÷ ad spend
It misleads because it uses revenue, not profit, and relies on attribution that credits ads for sales that may have happened anyway; branded search and retargeting are the usual offenders.
MER (marketing efficiency ratio)
Total revenue for every unit spent on marketing across all channels, without any attribution.
MER = total revenue ÷ total marketing spend
It misleads when revenue moves for reasons outside marketing, such as a price change, a stock-out or a competitor leaving the market.
CPM (cost per thousand impressions)
The cost of showing an ad one thousand times.
CPM = ad spend ÷ impressions × 1,000
It misleads when cheap impressions come from placements nobody sees, so a lower CPM can mean less real attention.
CPC (cost per click)
The average cost of one click on an ad.
CPC = ad spend ÷ clicks
It misleads when cheap clicks come from low-intent audiences that never convert.
CPA (cost per acquisition or action)
The average cost of one defined action, such as a sale, sign-up or lead.
CPA = ad spend ÷ number of actions
It misleads when the “action” is defined loosely, for example counting every form fill as a lead or every trial as a sale.
Incrementality
The outcome that marketing actually caused, measured by comparing a group that saw it with a comparable group that did not.
Incremental lift % = (test group result minus control group result) ÷ control group result × 100
It misleads when test and control groups are not truly comparable, or when the test runs too briefly to capture delayed purchases.
Marketing mix modelling (MMM)
A statistical model, usually regression on several years of weekly data, that estimates how much each channel, and factors such as price, seasonality and distribution, contributed to sales.
It misleads when data is too short or spend too steady to separate effects, and when its outputs are treated as precise rather than as estimates with ranges.
Brand health
Share of search
Your brand’s share of all branded search volume in your category, widely used as an early indicator of market share.
Share of search = searches for your brand ÷ searches for all brands in the category × 100
It misleads when brand names are also common words, or when the competitor set is chosen to flatter you.
Share of voice (SOV)
Your share of total advertising presence in a category, measured by spend or impressions.
SOV = your media spend (or impressions) ÷ total category media spend (or impressions) × 100
It misleads when it counts only the channels you can monitor, or when spend is weighted equally across media with very different attention.
Excess share of voice (ESOV)
The difference between your share of voice and your share of market.
ESOV = share of voice minus share of market (percentage points)
It misleads when used as a guarantee; the link between ESOV and growth is an observed tendency across many brands, and weak creative can waste the advantage.
Mental availability
How likely your brand is to come to mind in the buying situations that matter for your category, often measured against category entry points such as “a snack for the drive” or “a sensor for high-temperature use”.
Mental penetration = category buyers who link your brand to at least one entry point ÷ all category buyers surveyed × 100
It misleads when the entry points are invented by the brand team rather than taken from how buyers describe their needs.
Aided and unaided awareness
Unaided awareness is the share of people who name your brand without a prompt; aided awareness is the share who recognise it when shown a name or logo.
Awareness % = respondents who name (unaided) or recognise (aided) the brand ÷ total respondents × 100
It misleads when the sample is not your actual buyers, or when awareness is high but nobody associates the brand with a reason to choose it.
Brand lift
The change in a brand measure, such as awareness, consideration or ad recall, caused by a campaign.
Brand lift = metric in exposed group minus metric in unexposed control group (percentage points)
It misleads when measured straight after exposure, which captures short-term recall rather than lasting memory.
NPS (Net Promoter Score)
A measure of how likely customers are to recommend you, from a single 0 to 10 question.
NPS = % promoters (scores 9 or 10) minus % detractors (scores 0 to 6)
It misleads when surveyed only after good moments, when sample sizes are small, or when compared across industries and countries with different response habits.
B2B pipeline
MQL (marketing qualified lead)
A lead that meets agreed marketing criteria, such as fit with your target accounts and a meaningful level of engagement, and is judged ready for sales attention.
It misleads when the criteria reward activity over intent, so a researcher who downloads five papers outranks a buyer who asked for a price.
SQL (sales qualified lead)
A lead that sales has reviewed and accepted as a genuine potential opportunity, typically with need, authority, budget or timing confirmed.
It misleads when sales and marketing have not written the definition down together, so each team counts something different.
Cost per qualified lead
What it costs to generate one lead that meets your qualification criteria.
Cost per qualified lead = marketing spend ÷ qualified leads (MQL or SQL, as agreed)
It misleads when the definition of qualified slips over time, or when cheap qualified leads convert to opportunities far less often than expensive ones.
Win rate
The share of closed opportunities that you win.
Win rate = deals won ÷ (deals won plus deals lost) × 100
It misleads when stalled deals are never marked lost, which keeps them out of the denominator and inflates the rate.
Sales cycle length
The average time from an opportunity being created to the deal closing.
Sales cycle length = total days from creation to close for won deals ÷ number of won deals
It misleads when the start date is inconsistent; long technical evaluations that begin before an opportunity is logged make cycles look shorter than buyers experience them.
Pipeline velocity
The value of revenue moving through your pipeline per day.
Pipeline velocity = (number of qualified opportunities × win rate × average deal value) ÷ sales cycle length in days
It misleads when one large deal dominates the average, or when the inputs come from different periods.
Communications
Reach
The number or share of your intended audience who actually received a message, whether employees, investors, journalists or customers.
Reach % = audience members who received or opened the message ÷ intended audience × 100
It misleads when it counts sends rather than receipt, which overstates reach among frontline and deskless teams without company email.
Comprehension
The share of the audience who can correctly explain the key point of a message after receiving it, usually measured with a short survey or pulse question.
Comprehension % = respondents who correctly state the key message ÷ total respondents × 100
It misleads when the survey question hints at the answer, or when only the most engaged people respond.
Action rate
The share of the audience who did what the communication asked, such as completing training, adopting a process or registering for an event.
Action rate = audience members who completed the action ÷ intended audience × 100
It misleads when the action would have happened anyway, for example a mandatory task, so the message gets credit it did not earn.