How to Choose the Right KPIs for Your Marketing Function

Start with the decision, not the metric

The most common mistake in picking KPIs is starting from what's easy to measure instead of what actually needs deciding. A metric earns its spot on a dashboard when it changes what someone does next — reallocate budget, pause a campaign, escalate to a client. If a number can move in either direction and nothing changes, it's a vanity metric. Doesn't matter how good it looks in a slide.

Here's a quick test. For every KPI on your dashboard, ask: if this moved 20% either direction next week, who would actually do something differently? Can't answer that? The metric's probably there out of habit, not necessity.

Leading vs. lagging indicators

Lagging indicators — revenue, net revenue retention, total conversions — tell you what already happened. Essential for reporting. Useless for steering, because by the time they move, the underlying cause is weeks in the past. Leading indicators — cost per lead, click-through rate, activation rate — move earlier. They give you room to react before the lagging number is already locked in.

A healthy KPI set pairs both: a small number of lagging indicators that define success, and a larger set of leading indicators that explain what's actually driving them week to week.

A simple framework for picking KPIs

1. List the two or three business outcomes this function is actually accountable for. Not everything it touches.
2. For each outcome, pick one lagging indicator that directly measures it.
3. Work backward to two or three leading indicators that predict movement in that lagging indicator.
4. Cut everything else. That's context, not a KPI — it belongs in a footnote, not the dashboard header.

Benchmarking against your industry, carefully

Once you've settled on a KPI set, the obvious next question is whether your numbers are actually good. Published industry benchmarks are a fine starting point, but they're aggregates across business models, price points, and funnel structures that might not look anything like yours. Treat them as a sanity check, not a target. The better comparison — where you can get it — is against companies with a similar model and stage. That's exactly why a well-scoped, real benchmark beats a broad industry average.

Whatever you benchmark against, keep that comparison sitting right next to the metric's actual definition. A KPI without a clear, documented definition drifts in meaning over time even while the number keeps getting reported — and that quietly breaks any benchmark comparison built on top of it.