Definition
Vanity metrics are indicators that are tracked by organisations as a measure of a performance or the output of a specific team (e.g. Conversion Optimisation) but don’t necessarily have any significant impact upon revenues or sales. Such metrics can include clicks, likes, shares, registrations, pageviews, session time, or for the CRO team, the number of A/B tests you have live each month.
Source: Conversion-Uplift.co.uk
The danger of monitoring vanity metrics is that they may make you feel good about your marketing or your team, but if they are not influencing your core objectives (e.g. subscriptions, sales or leads) then they are just distracting you from the important indicators that do impact on your bottom line.
Facebook Metrics:
Avoid spending too much time looking at vanity metrics and instead focus on monitoring the data that is aligned to your business goals. One common mistake for social media marketing is to focus on Facebook metrics such as clicks, likes and shares. Facebook’s own Head of Marketing Science concluded in an article for the Journal of Advertising Research that these metrics have no value as marketing data. There is no correlation between these metrics and real-world effectiveness.
Business Objectives:
Digital optimisation is about ensuring each email or screen on your site or app is aligned to the business’s goals. So begin by clearly defining your business goals (e.g. meet customer needs and generate sufficient revenues for the business to flourish). Only once everyone is clear about these goals are you able to focus on what metrics you should be tracking and reporting. You should also consider how mature your business. A start-up for instance will initially have different objectives than a more mature business that has established sales channels and repeat business.
Meaningful Metrics:
Depending upon your business model and the maturity of your organisation you might need to measure:
- Number of active customers
- Average revenue per active customer
- New customers acquired (past 30 days)
- Average revenue per new customer (past 30 days)
- Customers who have become dormant (past 30 days)
- Monthly churn
- Retention rate
The key thing here is not to focus on a single metric, but to try to understand what factors are influencing each indicator and always look across a number of metrics so that you can see the bigger picture.
Resources:
Conversion marketing – Glossary of Conversion Marketing.
Over 300 tools reviewed – Digital Marketing Toolbox.
A/B testing software – Which A/B testing tools should you choose?
Types of A/B tests – How to optimise your website’s performance using A/B testing.
