Digital marketing can help you improve business and reach long-term business goals when applied effectively.
Within the wide web of analytics and tools that can help make sense of all the statistics and data, vanity metrics have become a constant with some business owners.
When we look at vanity metrics, for instance, this is one of the many features you’ll hear about when discussing marketing in the digital industry. In this blog post, we’d like to give you more insight as to what vanity metrics are, how to use it in marketing and even some pros and cons.
What Are Vanity Metrics?
A vanity metric can best be described as the “all but nothing”. Strange as that may sound, it’s exactly true. Due to its design, vanity metrics are downloads of multiple data findings that may or may not have anything to do with whether your business is doing well or not and is often the “other” aspects of the business that doesn’t truly count.
In short, it can boost your business ego and generate traffic, but may not have any contribution to conversion rates and ensuring that your business is actually making money from your traffic.
For example, vanity metrics are able to show you things that may seem good but are not going to help such as a massive increase in page views on your website for one month. This looks as if you’re getting more visitors which means you’ll feel inclined to make it happen again the next month and the next and the next. Exciting as that may sound, those are merely statistics, but it does not necessarily mean your website is doing well.
Another example of how vanity metrics may be deceiving is the fact that they can accrue several number statistics based on factors such as shares, likes and even the click-through rate used on social media platforms.
While this could seem great on paper, it doesn’t help in providing hard proof that these potential leads are actually converting to sales.
While leads may be actively visiting your website and commenting, liking and sharing, they may not even be interested in purchasing your service or products.
The Difference between Actionable and Vanity Metrics
When it comes to these two versions of metrics, you want to take your chances on actionable metrics over vanity metrics as actionable, just as its name suggests, means that those leads are becoming warm and even converting into sales. Here are some distinctive differences between the two.
Actionable Metrics
Actionable metrics focus on conversion rates, email opt-in conversions, and lifetime customer value, amongst other.
Vanity Metric
Vanity metrics are the statistics of how many visitors you’re receiving to your website, traffic, subscribers and shares to name a few.
Note: For every vanity metric there is an actionable metric difference.
Vanity VS Actionable
- Page views to website Conversion rates
- Members on trial bases (potential leads) Converted users (active members)
- Marketing expenses Return on marketing investment
- Monthly customer revenue Lifetime customer value/retention
- Email subscribers Members gained in the last month
What You Should Really Pay Attention To: Revenue
Revenue statistics are a vital part of actionable metrics and can give you clarity on how your digital marketing strategy is doing and how your sales people are performing.
- Net profit – the profit you make after deducting your operating expenses
- Total revenue – the total income calculated from services and sales
- Recurring revenue – the revenue that the business will continue to make throughout its time based on predictable aspects.
- Customer acquisition costs (CAC) – the expense and cost to the company that was used to persuade a customer to purchase a product and or service.
- Customer lifetime value (CLV) – this is the prediction of lifetime profit attributed to the customer.
The Upside of Vanity Metrics
While there is quite some talk of how vanity metrics can deceive you with shiny figures and statistics that may not mean anything good or substantial to your business, it can also help meet other marketing goals.
When zoning in on vanity metrics, you can use some of its features to your advantage. The tools for vanity metrics are widely available from most social media platforms and they can help you see how well visitors are interacting without deep diving into the hardcore evidence of how these interactions are affecting your business.
Other statistics that also play a valuable role in the business and part of actionable metrics include acquisition and conversion. Acquiring the customers is as important as knowing where they’re coming from because this will later help you with finding your target market.
You want to build a solid name for your business and services that you offer, but ruling out vanity metrics entirely may not make this possible. Vanity metrics can also contribute to a variety of positive aspects of marketing such as brand awareness which can build trust with your prospective leads.
By gaining email subscribers, it could lead to a higher open rate as well as click-through rate which can drive potential customers to your website and can lead to sales conversions in the long-run.
Getting more shares and followers can be good for online business and can earn some revenue but probably not as much as it would accrue with customers who are going to add lifetime value.
Disadvantages on Relying on Vanity Metrics
They deliver a false sense of success that is based on website interaction and not on conversions and customer retention for instance. Vanity metrics also produce large numbers without proof whether these are paying customers or trial users.
How you can be sure that you’re spending too much energy on vanity metric stats:
- If you’re not sure how your customers are coming through, you could be focusing on vanity over actionable metrics, because actionable metrics showcase how customers are acquired.
- You might be spending too much on acquiring your customers by not having figured out the actual acquisition expenses in your marketing process.
- You’re able to see an increase in interaction but you’re not sure how to track it back to the actual source.
- You’re sticking to what you do without changing methods. This is easily the mistake if you solely rely on vanity metrics, you could end up sticking to things that doesn’t benefit your business in the long-run.
- If you don’t have any clear goals, this could be because your vision for your business is obscured by the “false hopes” of vanity metrics.
When you’re solely focused on vanity metric statistics, you won’t be able to set clear goals and targets nor will these statistics be able to help you reduce possible losses. However, they can also be a small contribution to marketing statistics, but you must remember that you need engagement metrics to help distinguish which goals will work.
Engagement metrics find statistics based on facts that you can rely on to help set clear goals for your business as well as be more certain about future goals and revenue.
The Takeaway
While new in the digital marketing business, you may not know strategy or how to use metrics to your advantage, and it’s easy then to become fixated on vanity metrics because they look so good.
However, as you grow and become more knowledgeable in all aspect of marketing, you’ll soon learn that actionable strategy is better and it will also give your business better direction regarding marketing losses and profits.
As tempting as it can be to bask in the number of likes, followers and shares you are getting on social media, these vanity metrics don’t always paint a clear picture of exactly how successful your business is. Enjoy growing your online community, but remember, you are not running a fan club – you are running a business.
Vanity metrics are flattering, but ultimately you need to focus on the real numbers generated by your sales. This will ensure that in addition to adding value to your followers and customers, you are running a successful and profitable business.
