What are vanity metrics
Vanity metrics are measurements which are used to impress rather than be used or acted upon. These numbers are usually easily manipulated numbers that provide no real value to the business as if they are acted upon they would not help the business grow.
Example include: pageviews, social followers, unique sessions, social shares, etc. The reality is even these historically poor measurments could be actionable it really just depends on the actions taken.
How To tell if metrics are actionable?
Actionable metrics usually invoke specific questions and goals that can be achieved through short and long term tasks and projects. The quality of the question should indicate the quality of the metric?
How do I increase our social shares this month?
Why is this a bad metric (social share) it’s actionable? Utimately you haven’t qualified the why? Why is social traffic important to you this month? If you increase social traffic what will you get in return from your limited resources. What will you do with this traffic? And how much revenue will this generate?
The answers to these subsequent answers are (if being honest) bad answers that lead to cyclical path.
More social shares >> more awareness >> more interaction on social media
If X = Y and Y = Z then X will always will always equal Z check this https://www.varsitytutors.com/hotmath/hotmath_help/topics/properties-of-equality
How valuable is 1000 social shares?
Again the metric is the same (social shares) so why is this “actionable?” Experience will dictate that 1 social share isn’t enough to quantify anything so n must be larger to get any actionable data.
Therefore you can do some detective work and notice that:
1000 social shares from Facebook leads to X number of Facebook traffic and X number of traffic leads to Y number of email subscriptions and Y equates to Z number of monthly customers. Now I can start asking actionable questions:
How much did it cost me in time and resources to get 1000 shares? How revenue do these customers generate?
Now I can verify my findings (repeating this experiment and comparing the outcomes) take the mean or median and compare this data with say other cool questions:
How much did it cost me in time and resources to get (insert anything here) compared to getting 1000 shares? How revenue do these customers generate vs the customers derived from 1000 social shares?
Should you measure the efficacy of social shares? Probably not but you should ask better questions and bring intelligence to your data and not let raw data dictate your intelligence.
Vanity Metrics vs. Actionable Metrics
The point is don’t worry about the technical taxonomies of a vanity metric vs actionable metric instead just objectively use common sense to get to really good questions.
Net Positive gain
All actionable metrics lead to a net positive: revenue could be a good metric but net profit is usually a better one. Conversion rates could be a good metric but cost per conversion is usually a better one.
Don’t forget to factor in the time to gather these lovely metrics analysis paralysis could set in and the pursuit for the perfect metric could leave you broke and hangry. But as a rule of thumb the best actionable metrics are the ones that are lead to cost/benefit assumptions.
Exmpales include: cost / revenue, time / revenue, time & cost / revenue
The end game is to find out what works the best and do it over and over again until you reach diminished returns. Then reevanluate and repeart.
What are actionable metrics
A simpler way of looking at actionable metrics are metrics that challenge your business or business norms. As humans we have a hard time separating emotion from good decisions from solopreneurs to multi national enterprise level corporate entities.
Focus on good questions and good output should start spewing out of the naturally good metrics you are reviewing.
What are good metrics
Again it is completely up to your business. And these metrics are likely to change over time But here are some classic examples
Revenue / customer
Cost / customer acquisition
Net Profit / customer
Retention of customer by source
Again retention of customer is good but doesn’t lead to much action to be taken but when you compare it with the “source in which it was acquired” now you find out where your most valuable customers are coming from and focus more resources on that 😀
Is there any value yes for selling
If you are a social media company Facebook page likes and shares per post may be very important. Total number of twitter followers is very important. Look at any major news reporters twitter profile they usually have at least 1 million fake follower to inflate their metrics.
This is because it is a perception, it is a selling point of authority. TO an untrained eye 1 million followers, downloads, subscribers seems every impressive and may even inspire awe. But outside of an authoritative façade which do help your sales. They not only don’t help your business but they can hurt it.
Get rid of your habit
See if you can eliminate +80% of the vanity metrics you are reviewing now
Change your habit
Find at least one vanity metric and see if you can turn it into an actionable one with some more hard work
Develop good habit
Spend some time to decide what is the ONE most impotant vanity metric you can begin to track?