WTF is ROAS? (And Other Marketing Metrics You Should Actually Understand)

A founder-friendly guide to measuring what matters in marketing.

→ This is a story about turning marketing confusion into confident decisions—one metric at a time.

Businessman holding a piggy bank with ROAS written on it. Photo courtesy of Andrii Dodonov via Canva.

Hi, I’m Amy Zwagerman—Founder of The Launch Box, marketing mentor, educator, and Fractional CMO with 25+ years of experience helping entrepreneurs find their marketing zwagger (and clarity). If you want custom strategy without the cookie cutter feel, you’re in the right place.

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TL:DR

Confused by marketing metrics like ROAS, CAC, and AOV? This guide breaks down the numbers that actually matter—when to use them, how to track them, and why they’re critical at different stages of growth. Skip ahead to:

• ROAS breakdown → “What Is ROAS (and Why It’s Not Just for Ads)”

• Metric cheat sheet → “The Other Metrics That Actually Matter”

• Stage-specific guidance → “Which Metrics Matter Most for You”

• Optimization tips → “How to Stop Getting Lost in the Numbers”

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If terms like ROAS, CAC, and LTV make your eyes glaze over—you’re not alone. But if you’re trying to grow a business, you do need to know what they mean (and when they matter). The good news? You don’t need a marketing degree to understand the numbers. You just need a little context, a clear goal, and a solid strategy.

Let’s break down the most important marketing metrics (and their acronyms) in plain English now...

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First, What Is ROAS (and Why It’s Not Just for Ads)

ROAS = Return on Ad Spend

Formula: Revenue generated ÷ Ad spend

Let’s say you spent $500 on Instagram ads and made $2,000 in sales. Your ROAS is 4:1. That means you earned $4 for every $1 you spent.

Not bad, right?

But here’s the part most founders miss: Are you paying a social media manager or an ad agency to help you? I’m sorry, but those costs count too. If you only include ad spend and ignore the people behind the work, your numbers are lying to you. Yes, it might sting—but awareness brings clarity, and clarity fuels better decisions.

Despite its celebrity status in marketing circles, ROAS is just one part of a much bigger picture. It tells you how your paid efforts are performing—but not what’s fueling long-term growth.

And ROAS is not a helpful metric if:

• You’re still building brand awareness – ROAS doesn’t measure visibility or audience growth. Those early impressions may not convert right away, but they’re still valuable.

• You’re testing new campaigns or channels – Expect lower ROAS while you experiment and learn what works. That’s normal—and necessary.

• You’re measuring organic performance – ROAS applies only to paid efforts. For organic, focus on metrics like engagement, growth rate, and conversion.

The Bottom Line: Consider ROAS as one way to measure your ad spend—not the only way. It’s most powerful when evaluated in context—alongside your broader ad strategy, goals, and stage of growth.

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The Other Metrics That Actually Matter

Let’s face it: marketing is full of jargon—and acronyms like ROAS and CAC can feel like insider baseball for the ultra-indoctrinated. But just because they sound wonky doesn’t mean they’re superfluous. These metrics matter in the real world—and they can absolutely help you make better decisions, faster. So here’s a clear, founder-friendly round-up of the ones worth paying attention to (listed in alphabetical order, because, yes, in addition to being a #marketingnerd, I am a wee bit OCD):

AOV – Average Order Value

Formula: Total revenue ÷ Number of orders
Shows how much your customers spend on average per purchase. Useful when testing pricing or bundling strategies.

CAC – Customer Acquisition Cost

Formula: Total marketing spend ÷ Number of new customers
Tells you how much it costs to acquire one paying customer. Include ad spend, salaries, software tools, and agency fees.

Churn Rate – Rate of customer loss

Formula: (Lost customers ÷ Total customers at start of period) × 100
A high churn rate means people are leaving. Keep an eye on this, especially if you're subscription-based.

CVR – Conversion Rate

Formula: (Conversions ÷ Total visitors) × 100
Tells you how effective your marketing is at getting people to take action—like buying, signing up, or booking a call.

CTR – Click-through Rate

Formula: (Clicks ÷ Impressions) × 100
Measures how many people clicked on a link after seeing your ad, email, or post. It’s a good early indicator of interest.

Growth Rate – Rate of increase (can be used for any key metric)

Formula: ((Current period value − Previous period value) ÷ Previous period value) × 100
Used to evaluate momentum in your business or marketing performance.

LTV – Lifetime Value

Formula: Average purchase value × Number of purchases per customer per period × Average customer lifespan
Reveals how much a customer is worth over time. The higher your LTV, the more you can afford to spend on acquisition.

Net Revenue Per Customer – Your actual profit per customer before overhead

Formula: AOV − CAC
This shows how much you're really making once you subtract what it costs to acquire a customer.

Retention Rate – Percentage of customers who stick around

Formula: ((Customers at end of period − New customers) ÷ Customers at start of period) × 100
High retention = strong brand loyalty.

The Bottom Line: You don’t need to master every acronym, but knowing these key formulas puts you back in control. Use them to guide smart decisions—not to stress yourself out.

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Which Metrics Matter Most for You?

Not every metric matters equally at every stage—but there are smart indicators that can help you track what matters most to you at any given time. Here is how I tend to look at things:

→ If you're just starting (awareness + learning phase):

• Reach – Track impressions, followers, or views to gauge visibility.

• CTR (Click-through Rate) – Understand how often people are engaging with your content.

• CVR (Conversion Rate) – Track early signals of action (signups, downloads, etc.).

• Qualitative feedback – DMs, replies, and survey results help refine your message.

→ If you're growing (testing + optimizing phase):

• CAC (Customer Acquisition Cost) – Measure how much you're spending per customer.

• AOV (Average Order Value) – See how much each customer is spending.

• ROAS (Return on Ad Spend) – Evaluate how your paid media is performing.

• Net Revenue Per Customer – Identify actual profit after acquisition costs.

This is your optimization stage—improving results, tightening your funnel, and preparing to scale.

→ If you're scaling (efficiency + expansion phase):

• LTV (Lifetime Value) – Understand customer longevity and worth.

• LTV:CAC Ratio – Assess acquisition sustainability (3:1 is ideal).

• Retention Rate + Churn Rate – Know how many customers stick (or leave).

• Growth Rate – Measure month-over-month or year-over-year momentum.

• Net Revenue Per Customer – Ensure you're profitable at scale.

• ROAS (cross-channel) – Review and optimize channel-specific spend.

You’re looking for cost-effective growth, strategic clarity, and investor-friendly metrics at this stage.

The Bottom Line: Metrics only matter when paired with context and intention. Know where you are, what you’re trying to achieve, and measure accordingly.

💁🏻‍♀️Pro tip: Seeking funding? Investors love metrics like LTV:CAC, Runway, and Payback Period. Get the full breakdown of these (plus other investor favorites) inside my free Marketing Metrics Cheat Sheet. More info. below ⬇️

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How to Stop Getting Lost in the Numbers

Your job as a business owner isn’t to memorize every marketing metric and acronym. It’s to stay focused on the right metrics for your business goals—and know how and when to use them.

Need leads? Track CPL. Trying to raise your prices? Improve AOV. Running ads? Check ROAS—but also watch CVR and CAC.

But here’s the real secret: while you should always be tracking everything, you can only optimize one thing at a time.

For example, here’s how I would recommend you analyze a new digital marketing campaign:

• If you're running ads on social media and you're seeing strong reach but low engagement (CTR), it’s a messaging problem. Test new headlines, hooks, or formats.

• If you have strong engagement, but people aren’t converting (CVR is low), check what they’re landing on. Is the offer clear? Is the next step obvious?

• If you’re seeing good CVR but a high CAC, then it’s time to look at your audience targeting, pricing, or spend efficiency.

Campaigns rarely succeed or fail at one step. The magic is in seeing where people are dropping off—and optimizing that single moment before moving on.

The Bottom Line: Building a brand takes intention—and iteration. Making marketing decisions based solely on sales velocity is like flying blind. The metrics we’ve covered aren’t just industry jargon—they’re strategic clues. They show you what’s working, what’s not, and where to focus next so you can lead with insight instead of guesswork.

💁🏻‍♀️Pro tip: Get in the habit of tracking your metrics weekly. Why? Because that’s the only way to know if the tactics—and tweaks—you’re making are actually working. Over time, these numbers become more than reports. They become your radar. You’ll start to spot patterns, catch shifts early, and course-correct before a campaign stalls, sales dip, or inventory runs dry. Metrics don’t just show you what happened—they help you anticipate what’s coming.

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Want to go deeper?

This article covers the must-know metrics for growing your business—but if you're ready to nerd out (just a little), I've got you covered with my Marketing Metrics Cheat Sheet. It’s your go-to dashboard for making data-driven decisions without drowning in analysis paralysis. Perfect for founders, marketers, and anyone who wants to track smarter (not harder).

→ Grab the Marketing Metrics Cheat Sheet — a Google Sheets file that includes

• All the key metrics (+ the Investor stats I mentioned earlier) in A–Z order

• A sortable list by use case (think: awareness, sales, efficiency, retention)

• A breakdown by business stage (Start, Grow, Scale, Fund)

Think of it (and me) as your CMO in spreadsheet form—minus the salary. 👩🏻‍💻

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Wrapping It All Up

Understanding marketing metrics doesn’t have to be overwhelming. With the right context, a solid strategy, and a commitment to focusing on one area of improvement at a time, you can turn data into direction. Whether you’re just getting started or preparing to scale, what matters most is using metrics as tools, not rules. Your numbers are here to guide you—not stress you out.

So take a breath, pick one place to start, and begin measuring what matters most for your brand.

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Your Turn: Which of these metrics are you tracking—or finally starting to understand—in a new way? Drop a comment, hit reply, or DM me and let me know what’s clicking (or what still feels confusing).