The Only 5 Marketing Metrics Service Businesses Should Track
I've sat through dozens of "marketing reports" with business owners.
The agency sends a 15-page PDF with 47 metrics. Impressions, reach, engagement rate, click-through rate, bounce rate, time on site, pages per session, new vs. returning visitors...
The owner's eyes glaze over by page 3. They nod politely. They have no idea if their marketing is working.
Here's the truth: most of those metrics don't matter. They're noise that hides whether you're actually making money.
Service businesses need to track exactly 5 metrics. That's it. Everything else is either vanity or can be derived from these five.
Metric 1: Lead Volume
What it is: Total number of leads per month from all sources.
A lead = someone who contacts you about potentially buying your service.
This includes: - Phone calls (from call tracking) - Contact form submissions - Chat conversations - Text messages - Direct messages on social (if you count those)
Why it matters:
Lead volume is the top of your sales funnel. If you're not getting enough leads, nothing else matters.
What's "good":
Depends entirely on your close rate and average job value. A plumber closing 60% of leads at $400/job needs more leads than an HVAC company closing 30% at $8,000/job.
Rough target: enough leads to hit your revenue goal given your close rate.
Red flags: - Lead volume suddenly drops - Leads increase but revenue doesn't - Leads are seasonal but you haven't planned for it
Metric 2: Cost Per Lead (CPL)
What it is: Total marketing spend ÷ total leads = cost per lead.
If you spend $3,000/month on marketing and get 40 leads, your CPL is $75.
Why it matters:
CPL tells you how efficiently your marketing generates opportunities. It's the bridge between spending and results.
What's "good":
Varies by industry, service, and market. Phoenix benchmarks I've seen:
- Plumbing: $40-80/lead
- HVAC: $60-120/lead
- Roofing: $80-150/lead
- Electrical: $50-100/lead
Higher-value services can afford higher CPL. Emergency services typically have lower CPL than planned services.
Red flags: - CPL steadily increasing over time - CPL varies wildly month to month (usually means tracking issues) - CPL is great but revenue is flat (lead quality problem)
How to calculate by channel:
Don't just look at overall CPL. Track it per channel: - Google Ads CPL - SEO CPL (organic leads ÷ SEO investment) - Facebook CPL - Referral CPL (often zero or very low)
This shows you where to invest more and where to cut back.
Metric 3: Close Rate
What it is: Booked jobs ÷ total leads = close rate.
If you get 40 leads and book 16 jobs, your close rate is 40%.
Why it matters:
Close rate measures lead quality AND sales effectiveness.
Low close rate could mean: - Your marketing attracts the wrong people - Your team doesn't sell well on the phone - Your pricing is off for your market - You're getting lots of spam/wrong numbers
What's "good":
Service business phone leads should close at 30-50%. Below 30%, something is wrong with lead quality or sales process. Above 50%, you're doing great (or possibly underpriced).
Web form leads typically close lower (20-35%) because there's less urgency than a phone call.
Red flags: - Close rate below 25% (lead quality problem or sales problem) - Close rate dropping over time - Close rate varies wildly by lead source (helps you identify quality issues)
How to track:
This requires connecting your lead data to your job data. Options: - CRM system (ServiceTitan, Housecall Pro, etc.) - Simple spreadsheet (lead date, source, outcome) - Ask your team to mark outcomes in call tracking software
Most service businesses don't track this. They should.
Metric 4: Customer Acquisition Cost (CAC)
What it is: Total marketing spend ÷ new customers = customer acquisition cost.
If you spend $3,000/month on marketing and acquire 16 new customers, your CAC is $187.50.
Why it matters:
CAC is the true cost to acquire a customer. It incorporates both lead cost and close rate.
CPL might be $75, but if you only close 40%, your actual CAC is $187.50.
This is the number you compare to customer value to determine profitability.
What's "good":
Your CAC should be significantly lower than your customer's lifetime value (next metric).
Rule of thumb: CAC should be 1/3 or less of LTV. If it costs $200 to acquire a customer who will spend $600 with you, that's healthy. If that customer will spend $2,000, you're doing great. If they only spend $250, you have a problem.
Red flags: - CAC approaching or exceeding first-job revenue - CAC increasing faster than customer value - Dramatically different CAC by channel (helps prioritize)
Metric 5: Lifetime Value (LTV)
What it is: Total revenue from an average customer over their relationship with you.
Why it matters:
LTV puts all the other metrics in context.
A $200 CAC is terrible if customers only spend $300. A $200 CAC is fantastic if customers spend $5,000 over time.
How to calculate (simplified):
For service businesses, there are two components:
- . First job value: Average revenue from initial service call
- . Repeat and referral value: Revenue from follow-up work and referrals
LTV = First job value + (Annual repeat revenue × Average customer lifespan)
Example for HVAC: - First job average: $500 (repair or tune-up) - 30% become maintenance plan customers: $200/year × 5 years = $1,000 - 20% buy major equipment within 3 years: $8,000 × 0.2 = $1,600 - Average referrals per customer: 0.3 at $500 value = $150
LTV = $500 + ($1,000 × 0.3) + $1,600 + $150 = ~$2,550
With an LTV of $2,550, a CAC of $200 looks great. You're paying $200 to acquire a customer worth $2,550.
Red flags: - LTV is close to or lower than CAC (you're losing money) - LTV declining (retention problem or service quality issue) - Not tracking LTV at all (flying blind on profitability)
How These 5 Metrics Work Together
Let's see this in action:
Scenario: Phoenix plumbing company - Monthly marketing spend: $4,000 - Leads per month: 60 - Close rate: 40% - New customers: 24 - Average first job: $350 - LTV: $800 (including repeat and referrals)
The metrics: 1. Lead volume: 60/month ✓ 2. CPL: $4,000 ÷ 60 = $67 ✓ 3. Close rate: 40% ✓ 4. CAC: $4,000 ÷ 24 = $167 5. LTV: $800
The analysis:
CAC/LTV ratio: $167/$800 = 21%
This is excellent. They're paying $167 to acquire a customer worth $800. Every dollar of marketing generates roughly $5 in customer value.
If things were different:
Same leads and spend, but only 25% close rate: - New customers: 15 - CAC: $267 - CAC/LTV ratio: 33%
Still okay, but the close rate is costing them. Fix sales process before spending more on marketing.
Why Other Metrics Don't Make This List
"But what about impressions/click-through rate/bounce rate?"
These are diagnostic metrics. They help you understand WHY your 5 core metrics are what they are. But they're not the metrics you should track regularly.
Example: If your CPL suddenly spikes, you investigate. Maybe CTR dropped. Maybe CPCs increased. Maybe bounce rate went up. These help you diagnose the problem.
But you don't need a 15-page report every month showing all these numbers. You need the 5 that matter, and you investigate the others when something's off.
How to Track These 5 Metrics
Minimum viable tracking:
A simple spreadsheet updated monthly: - Total marketing spend (pull from your bank statements/invoices) - Total leads (from call tracking + form submissions) - Jobs booked (from your scheduling system or job count) - Revenue from new customers (from your accounting)
Better tracking:
- Call tracking software (CallRail) for lead volume by channel
- CRM that tracks lead-to-customer conversion (ServiceTitan, Housecall Pro)
- Monthly review meeting to calculate and analyze
Best tracking:
- Integrated systems where lead source flows through to job completion and revenue
- Automated dashboard showing metrics in real-time
- Per-channel breakdown of all 5 metrics
The Monthly Review
Once you're tracking these, schedule 30 minutes monthly to review:
- . Are we getting enough leads? If not, need more marketing investment or better targeting.
- . Is CPL in line? If it's creeping up, investigate why.
- . Are we closing well? If close rate dropped, is it lead quality or sales?
- . Is CAC sustainable? Compare to LTV. Are we profitable on new customers?
- . Is LTV holding or growing? If dropping, look at retention and service quality.
This simple review tells you more than any 47-metric report ever could.
Drowning in metrics but starving for insights? [Let's build a simple tracking system](/contact) that shows you what's actually working.