What KPIs a Startup Should Measure
When you’re running a startup, every decision counts. You don’t have time or budget to waste on guesswork. That’s why tracking the right Key Performance Indicators (KPIs) is critical — they help you understand what’s working, what’s not, and where to focus next.
At DigeeSell, we work with early-stage and growth-stage startups to set up scalable marketing systems driven by real-time data. Here’s a guide to the most important KPIs your startup should measure across key business areas:
1. Customer Acquisition Cost (CAC)
This tells you how much you’re spending to acquire one new customer.
Formula:
CAC = Total Marketing & Sales Cost / Number of New Customers Acquired
High CAC means you’re spending too much to acquire users, which is unsustainable. Your goal should be to reduce CAC as you scale through better targeting, automation, and retention.
2. Customer Lifetime Value (CLV or LTV)
This measures the total revenue a customer brings in over their entire relationship with your business.
Why It Matters:
If your LTV is much higher than your CAC, you’re in good shape. Ideally, aim for an LTV:CAC ratio of 3:1 or more.
3. Monthly Recurring Revenue (MRR) / Annual Recurring Revenue (ARR)
If you run a subscription-based or SaaS business, tracking MRR or ARR is essential to understand financial stability.
MRR = Number of Active Customers × Average Revenue Per Customer
Tracking MRR helps you predict revenue growth and make hiring or marketing decisions accordingly.
4. Churn Rate
Churn measures the percentage of customers who stop using your product or service in a given period.
Formula:
Churn Rate = (Customers Lost During Period / Total Customers at Start) × 100
High churn signals customer dissatisfaction or poor product-market fit and should be addressed immediately.
5. Conversion Rate
This measures how many visitors take a desired action — like signing up, making a purchase, or downloading an app.
Formula:
Conversion Rate = (Conversions / Total Visitors) × 100
Track conversion rates at different funnel stages: website visits, sign-ups, demos booked, or purchases made.
6. Burn Rate & Runway
Burn rate is the rate at which you’re spending money. Runway tells you how many months you can keep operating before you run out of funds.
Formula:
Runway = Current Cash / Monthly Burn Rate
These KPIs are crucial for startups that are pre-revenue or still dependent on investor capital.
7. Traffic Sources & Engagement
Know where your traffic is coming from — organic search, social media, paid ads, referrals, etc. Tools like Google Analytics can help track:
- Bounce rate
- Average session duration
- Pages per session
These metrics help you identify the most valuable traffic channels and how users behave on your site.
8. Net Promoter Score (NPS)
This measures customer satisfaction and loyalty based on a simple question: “How likely are you to recommend us to a friend?”
Score Range:
- 9–10: Promoters
- 7–8: Passives
- 0–6: Detractors
A high NPS means your product is creating value — and referrals will naturally grow.
9. Lead Velocity Rate (LVR)
For B2B startups, LVR tracks how fast qualified leads are growing month-over-month.
Why It Matters:
It’s a strong forward-looking KPI. Even if sales haven’t closed yet, growing your lead pipeline signals future revenue.
10. Return on Ad Spend (ROAS)
Especially important for startups investing in digital advertising. It measures how much revenue you’re earning for every dollar spent.
Formula:
ROAS = Revenue from Ads / Cost of Ads
We at DigeeSell help startups optimize ROAS through better ad creatives, targeting, and landing pages.
Final Thoughts from DigeeSell
Startups thrive not by doing everything — but by doing the right things. Tracking KPIs gives you the clarity and confidence to scale smarter, avoid financial pitfalls, and impress investors with real data. At DigeeSell, we not only drive traffic and leads but also help startups define, measure, and act on the KPIs that matter most.