Let’s say you’re preparing a meal; you’ve got fancy china, a lovely place setting, and each dish is beautifully presented on the plate.
Then your guests arrive, hungry and ready to dig in, only to discover the turkey is undercooked, the risotto tastes awful, and the blueberry cream pie is nothing to write home about. Some of your guests even get food poisoning.
Think of vanity metrics as the fancy china and food presentation—they make everything look good, but at the end of the day, they didn’t contribute much towards helping you achieve your goal, which was to cook a meal people can enjoy.
The greater focus should have been on finding a recipe and following its instructions. The moment you messed up the food preparation process, you set the ball rolling for everything else to fall apart.
Many business owners and marketers become obsessed with vanity metrics, which like fancy china and table settings, don’t provide any real value to their business. If you want to hack success and discover growth opportunities, you need to track and measure actionable data.
In this article, I’ll break down the difference between vanity and actionable metrics and examine how they can be used effectively to drive marketing strategies. I’ll also look at a few examples of both metrics by industry, specifically the e-commerce, SaaS, and hospitality industries.
What is a Vanity Metric?
Vanity metrics are a smokes and mirrors game. You can like what you see because you see impressive numbers, but you’re not really getting a realistic look at what’s happening.
All you have is flashy data that doesn’t improve your understanding of how you’ve performed or offer any insights for future marketing decisions. This can work wonders for PR purposes as long as no one looks at them too closely and starts asking questions.
For example, having 100,000 app downloads might seem impressive, but that number means nothing if there are only 1,000 monthly active users. Likewise, growing your Instagram followers by millions is meaningless if those follows don’t translate into sales.
Relying heavily on vanity metrics can be dangerous for your business. It might lead you to believe you’re getting results, even though those results aren’t positively impacting your bottom line.
Some vanity metrics examples that you shouldn’t spend time tracking and reporting are:
- Number of articles published
- Number of social media followers/likes
- Total marketing spend
- Number of unfiltered leads
- Number of page views
- Total number of product users/subscribers
Before you get caught up in the glitz and glam of a metric and start touting it as an achievement, ask yourself if it’ll bring you closer to your business goals.
Will it help you understand customer behavior or desires or make an informed marketing decision?
Can you intentionally and consistently reproduce the same result? If the answer to these questions is “no,” that’s a vanity metric, and you need to put it down and go searching for metrics that provide value.
What is an Actionable Metric?
Rather than getting distracted by numbers, actionable metrics help you pinpoint the actions that are yielding results and focus on the strategies you can implement to scale your business.
Actionable metrics are insights your team can use to make informed decisions, or act upon to improve results and bring you closer to your business goals. They tell you exactly what led to the performance that you’re seeing, so you can assign credit or blame.
These metrics don’t happen by chance but because of factors that are within your control, which means that you can easily replicate the results.
When trying to determine how actionable a metric is the questions to ask are:
- Can you act on this particular insight?
- How does it help you gain or lose revenue and customers?
Knowing that you generated 100 new leads is nice, but it doesn’t help you do anything. However, knowing that 35 of those leads were qualified and came from channel A, will tell you that it’s a good idea to double down on your investment in that channel so you can keep attracting more quality leads.
That’s the difference between vanity metrics vs actionable metrics.
Actionable metrics that can move the needle for your business and are worth tracking include social media shares, engagement rate, traffic sources, bounce rate, sentiment analysis, click-through rate, and ROI on marketing spend.
The Metrics to Track in Marketing
It’s easy to get lost in pretty numbers and irrelevant information.
To avoid this, you need to measure only the data you need to prove or disprove the success of a strategy and no more.
One actionable metric can offer valuable insight that is more useful than dozens of feel-good vanity metrics. You must leverage the right technology and tools to monitor and analyze your marketing efforts and their corresponding results.
This information will ultimately enable you to better promote your products/services, and craft messages that’ll resonate with your audience.
Here are some of the most important metrics you and your team can use to dig deeper into your marketing metric and find insights they can take action upon to increase company growth and revenue.
You’ll want to track the rate at which people who visit your site become leads and then customers. When someone comes to your site through one of your traffic sources or marketing campaigns, they’re a prospect.
When they add a product to their cart, sign up for a free trial, book an appointment, fill out a contact form, or hand over their email, they become a lead. And when they give you their credit card information to charge their account they become a customer.
Keeping an eye on the conversion rates at each step will help you understand how your strategies are performing and the areas where improvements need to be made.
Your conversion rate is simply the percentage of people who visit your site or app that take a specific action. So, if 10,000 people troop to your website in a month and only 100 of them make a purchase, your conversion rate for that month is 1%.
What counts as conversions vary from business to business. Ecommerce companies may include purchase rates, newsletter sign-ups, and add to cart rates when calculating conversions.
Hospitality organizations might focus on newsletter sign-ups, social shares, and bookings, while SaaS companies might include webinar registrations, leads generated, email signups, product demos, and free trial registrations when working out their conversion rate.
The average conversion rate differs from industry to industry. For eCommerce businesses, it’s between 2% and 3%; for SaaS companies, it’s between 4% to 25% depending on the product offering; and for businesses in the hospitality industry, it’s pegged around 2%.
Rather than obsessing over competitor numbers or the industry average when tracking your conversion rates, your goal should be to establish an internal benchmark, then try to beat it. As long as your numbers keep improving, you’re on the right track.
Marketing has to be intentional if you want to produce consistent, positive results. You can’t just throw strategies at the wall and hope that something sticks. This is where A/B tests come in.
Split testing your ideas will tell you which of them have merit and what elements in your messages resonate the most with your audience. You can use split tests to determine which copy, CTA text, CTA button color, images, product design, etc, does a better job of promoting your offering and enticing customers.
For example, eCommerce businesses can run A/B tests to see which CTA gets more people to make a purchase. A SaaS company can test to see if offering a free trial without a credit card or one with a credit card required secures more conversions.
While a resort can test to see if people would rather scroll through images of their accommodation options or watch a short video.
Don’t just assume something is going to fail or work your target audience. Test out your hypothesis first, then modify your marketing campaign accordingly.
Ideally, there should be a series of defined steps that your prospects have to follow before they convert. For an e-commerce business, your funnel is how people go from browsing your products, adding things to their cart, and then checking out.
For SaaS and hospitality companies, your funnel could include webinars, lead magnets, email sign up processes, lead generation forms, and more.
Tracking your funnel or path to conversion will tell you where your strategy or processes break down.
- Which content drew in visitors that converted into qualified leads or customers?
- What actions did prospects take on your site before converting?
- Do many visitors never go past the products page?
- Or do customers abandon their cart just before making payment?
Tracking this information will let you know where the issues are and how to fix the leakages in your funnel. You can easily monitor this metric and see how people move through your conversion path by adding tracking links to your CTA and website.
Whenever you create a new marketing campaign, you need to track certain metrics so you can know how the campaign performs and make necessary changes.
These metrics will allow you to gauge the effectiveness of your efforts and figure out what tactic needs to be dropped or optimized to boost performance.
The metrics you choose to track for a campaign will depend on your objectives and what you’re trying to measure. Campaign-specific metrics include:
- Phone number clicks
- Email clicks/email open rate
- Engagement rate
- Time on page/Time in software
- Social media shares
- Bounce rate
- Renewal rates/Trial conversion rate/Upgrade rate
- Referral program growth
- Cost per lead vs Marketing qualified lead vs Sales qualified lead
- Percentage of new/returning customers
- Organic branded search growth
Tips to Boost Actionability
Whether your marketing team is crushing it or struggling to hit their targets, it’s vital to accurately report their work. It’s the only way to honestly determine how far you’ve come and what needs to be done to improve.
Now that you know what not to focus on and which metrics matter for your business let’s look at how you can increase actionability and track the most appropriate metrics.
Understand your goals
If you don’t know what you’re trying to achieve, how will you determine what success looks like to you? You need to define your marketing goals and then select actionable metrics for measuring performance.
For instance, if your goal is to increase sales, you’ll know that tracking your funnels and conversion rate will tell you whether you’re succeeding or not.
If you want more social media visibility, you can use your social media engagement rate as a metric for determining success.
To improve your SEO, you can make increasing the ranking for specific keywords the corresponding metric. If you want to raise the quality of your content, measuring scroll depth and time on page can tell you how you’re doing on that front.
Conduct an audit
If you’ve been running your business for a while, you probably have analytics tools that help you monitor and analyze the results of your marketing efforts. And there’s a good chance many of the metrics you’re currently tracking are vanity metrics.
So what can be done about this? The solution is simple. Make a list of all the metrics you’re reporting and test them against these questions:
- What does this metric help me measure and why is it important?
- What does it tell me about my marketing strategies?
- How does it align with my marketing objectives?
- Are there any changes I can make to optimize results based on this metric?
If the metric in question scales this test and offers valuable insight into your current and future marketing activities, it’s an actionable metric. If it doesn’t, then it’s a vanity metric and an ineffective way to measure your efforts.
Make your vanity metrics actionable
Vanity metrics are not entirely useless. Digging into the data behind them can offer actionable information you can use to boost performance.
For every vanity metric out there, there’s an actionable metric that you can replace it with to generate richer marketing insights, fine-tune your strategy, and accurately measure your business goals.
You just need to select metrics that help you take action instead of focusing on metrics that only make you feel good. Or look deeper at your vanity metrics to see what actionable data you can derive from them.
Track metrics that matter
There’s nothing wrong with being proud of the number of articles you’ve published or your thousands of Twitter followers. But at the end of the day, the purpose of your metrics isn’t to make you feel good about yourself, your app, or your website.
Metrics are there to help you improve, come up with creative strategies, better understand your customers, and find ways to scale your business.
There are hundreds of data points you can use to analyze everything from user experience to customer behavior, social media, and your inbound marketing efforts. Just make sure to monitor the right KPIs and steer your marketing efforts with actionable metrics.
Book a call with one of our experts to make sure you’re relying on the right KPIs.
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About the author
Zoe is a content marketing strategist for SaaS brands like FollowUpBoss, Mention.com, and more. On the personal front, Zoe is a pho enthusiast and loves traveling around the world as a digital nomad. Connect with Zoe on Twitter.