Most small businesses have no idea which of their marketing activities are generating customers. They run Google Ads, pay for SEO, post on social media, and send email campaigns — and when asked which one actually drives revenue, the honest answer is "we're not sure."
This is expensive. Not measuring ROI means you continue spending on things that don't work and underinvesting in things that do. Here's how to fix it.
The Core Framework: Track the Chain
Marketing ROI follows a chain:
Impressions → Clicks → Leads → Customers → Revenue
You need to measure each step. Knowing you got 10,000 impressions from Google Ads is useless without knowing how many became leads. Knowing you got 50 leads is useless without knowing how many became paying customers.
Step 1: Set Up Proper Tracking
The foundation is analytics and conversion tracking:
- Google Analytics 4 (GA4) — Tracks website traffic, sources, and behavior
- Google Tag Manager (GTM) — Fires conversion events when people fill out forms, click your phone number, etc.
- Google Search Console — Tracks which search queries bring people to your site
- GBP Insights — Tracks calls, direction requests, and website clicks from your Google Business Profile
- Call tracking — Assigns unique phone numbers to different channels so you know which generates calls
Without these set up properly, you're guessing. With them, you know.
Step 2: Define What Counts as a "Conversion"
For most small businesses, conversions are:
- Contact form submission
- Phone call (click-to-call from website or GBP)
- Appointment booking
- Live chat engagement
- Direction request (for brick-and-mortar businesses)
Set up tracking for each of these in GA4/GTM. Now you can see: last month, your website generated 47 conversions. 31 came from organic Google search. 10 from Google Ads. 4 from Facebook. 2 from direct.
Step 3: Calculate Cost Per Lead by Channel
Once you know how many leads each channel generates, divide your spend:
- Google Ads: spent $800, generated 12 leads → $67/lead
- SEO agency: spent $1,000, generated 28 leads → $36/lead
- Facebook ads: spent $300, generated 2 leads → $150/lead
Now you know where to put your next dollar.
Step 4: Track Through to Customer and Revenue
Cost per lead is only half the picture. You also need close rate and average customer value:
- If Google Ads leads close at 20% and SEO leads close at 40%, the SEO leads are even more valuable than the cost per lead suggests
- If Google Ads leads have a higher average job value, that changes the math too
The formula: Customer Acquisition Cost = Marketing Spend ÷ New Customers
Then compare to: Customer Lifetime Value (average revenue per customer × how long they stay)
If CAC < CLV, you're profitable. The wider the gap, the better.
Step 5: Build a Simple Monthly Dashboard
You don't need sophisticated software. A simple spreadsheet tracking these monthly metrics is enough:
- Total leads by channel
- Spend by channel
- Cost per lead by channel
- New customers this month (and source, if trackable)
- Revenue from new customers
- Overall marketing ROI
Review it monthly. Let the data drive budget decisions rather than gut feel.
The Most Common Tracking Gaps We Find
- Phone calls not tracked — For most local service businesses, calls are the primary conversion. If you're not tracking them, you're missing most of your data.
- GBP calls not connected to the website — Many leads come directly from the GBP listing, not your website. These need separate tracking.
- No attribution model — A customer who found you on Google six months ago, visited twice, and finally called after seeing a Facebook post — which channel gets credit? Last-touch attribution (the default) often misleads.
Want Proper Tracking Set Up?
Our analytics and conversion tracking service handles the full setup — GA4, GTM, call tracking, GBP integration, and monthly reporting that shows you exactly what's working. Talk to us →
Buzz Cue — Poulsbo, WA. We build the measurement systems that make marketing accountable. Free audit →