In an Age of Vanity Metrics, When it Comes to ROI - Measure What Matters
by Holly Ripley, on 20 August, 2020
Big numbers and steep inclining graphs are enough to get any business’ mouths watering, but as much as we all love a good pat on the back – let's not jump the gun.
Vanity metrics are some of the most common metrics in digital marketing; things like registered users and raw pageviews being just a few examples. While these metrics can provide useful insight into the success of your content, these numbers should not be tied into ROI.
Using growth metrics such as these to indicate ROI can make you feel pleased as punch when displayed proudly on a chart, the truth is they are easily manipulated and often don’t indicate the true success of the business.
They may well be making you smile, but are they making you money?
It’s so important not to get blindsided by pleasing trends on a chart and be able to distinguish between actionable metrics and what Startup master, Eric Ries calls vanity metrics – which can open the door to performance distortion when presented in the wrong context, leaving marketers surprised when campaigns that seemed successful ultimately fail.
Your website may be receiving thousands of visits a day – but how many are converting?
Gartner predicts that 60% of CMOs will halve their analytics departments by 2023 because data isn’t delivering the intended value.
It’s crucial that you identify and measure the correct metrics in order to improve them and understand when and where you’re adding value to the customer experience. As your actionable metrics head to the top right corner, your customer satisfaction should too.
Generally, the difference between vanity and actionable metrics is whether the measurement is tracking what people consume passively, in comparison to the actions people take. When your audience actively engages with a piece of content or a call to action, they are purposefully moving down the funnel.
Before you start scrolling through all your data trying to work out which are vanity metrics and which are actionable – minimise the tab, turn off your screen and ask yourself a new question:
“What are my business goals?” and “Does this metric give me any insight to improve or reach these goals?”
If the answer is no – do you need to be tracking it? And just like it says on the tin – is this metric actionable? When you look at the data, is there a way to improve the results? If the answer is no, you’re probably looking at a vanity metric, right in its pretty little face.
Actionable metrics should reveal insights and help you make business decisions in line with your goals. In essence, your actionable metrics should provide you the answers to the following questions:
- How you’re increasing or decreasing revenue
- Why your customers are coming to you and what they’re looking for
- How you’re gaining or losing customers
With only 24 hours in a day and competitors on your tail, time is your company's largest asset. Don’t waste it tracking metrics that don’t matter.