Your Content, Social, & SEO Strategies are Useless If You're Tracking the Wrong Metrics
Thanks to the various research, analytics, and insight tools that we have at our fingertips, tracking and measuring data is easier than ever. Want to see how many people visited your site last week? Click. Need to know the percentage of people that abandoned their shopping carts? No problem—all those numbers can easily be crunched by a standard analytics program.
Another convenient feature of these metric programs is their ability to generate reports at a drop of a hat. Tables, graphs, and charts can be pulled up in seconds, allowing people to easily make sense out of the data.
Yes, everything is great and swell in the realm of data and analytics… right? Not exactly. Unfortunately, while a lot of site owners may be tracking their data, a good number of them are tracking the wrong things. These things are what the tech world refers to as “vanity metrics.”
Coined by Eric Ries in his book The Lean Startup, vanity metrics are defined as “measurements that give ‘the rosiest picture possible’ but do not accurately reflect the key drivers of a business.”
Vanity metrics are (usually) big yet empty numbers. While they may look good on paper, and while they can certainly feed a company’s ego, they are essentially meaningless. As former TechCrunch editor Erick Schonfeld put it, “Vanity metrics are things like registered users, downloads, and raw pageviews. They are easily manipulated, and do not necessarily correlate to the numbers that really matter: active users, engagement, the cost of getting new customers, and ultimately revenues and profits.”
Why such the big fuss about vanity metrics?
Now that we’ve establish how useless vanity metrics really are, why in the world do we bother with them? Why do vanity metrics continue to make waves and why are they dominating the media and business realms?
Well, for one thing, the press loves vanity metrics. These numbers are sexy and they paint a picture of promise and innovation. Why report about a 0.01% increase in profits when they can report about how a company gained 10,000 followers in one week?
Headlines that are filled with vanity metrics get more clicks because they seem more newsworthy and exciting. Meanwhile, the important numbers—the ones that are buried inside accounting spreadsheets or boring data files—don’t get the spotlight that they deserve.
Another big reason why vanity metrics get most of the attention is that they distract us from the ugly truth. These numbers make people feel good about their companies. After all it’s easier to talk about the millions of hits that your site got this month, than discuss the fact that company growth has stalled.
It’s easier to brag about the number of Likes on your Facebook page than to bring up the amount of profits that your business got this quarter.
How to zero in on the metrics that count
Vanity metrics give entrepreneurs, webmasters, and members of the press an easy way out, which is why it’s so tempting to just focus on the big, juicy numbers. However, continuing to do so can spell trouble for your business. These metrics can give you a false sense of success and security and prevent you from seeing the bigger picture. For instance, what’s the use of skyrocketing page views if you’re profits aren’t moving?
Instead of focusing on vanity metrics, it’s best to shift your attention to actionable metrics, or numbers that “can lead to informed business decisions and subsequent action.” Actionable metrics can tell you what to do, what you’re doing wrong, or what steps to take next.
Actionable metrics are directly correlated to the actual growth and profit goals of your website or business. For instance, if you’re in ecommerce, the actionable metrics that you should be tracking would include churn rate or conversions.
Think about the numbers that have a direct link to the bottom line of your business. For example, conversion rates and referrals can tell you a story that’s far more meaningful that what mere impressions or “Likes” can.
Determine your goals. If you want to find actionable metrics, then goal determination should be your first step. Think about what you want to achieve in your company. Why do you have a website? Is it to make a profit? Are you there to sell? To serve? To change lives? Whatever your goals are, be very clear on them because they will dictate the next steps for your business. Also, if you have other team members or employees, ensure that they are all aware of these goals. Everyone should be on the same page, so that each member of the organization knows what needs to be measured.
Once you’ve set your goals, find the numbers or statistics that directly correlate to what you want to achieve. Identify the actions that you need to track, and measure them accordingly. For instance, if your goal is to sell a particular product, then measure things like CTRs and conversion rates.
It’s also a good idea to track how happy your customers are. If you run an ecommerce site, examine reviews for your products or take a look at how customers recommend your items. If you own a membership site, then you should probably measure the number of active users, their time on the site, or how often they come back.
Not sure if the data you have is a vanity or actionable metric? A good way to know if something is worth measuring is by asking questions. Always bring up questions like, “So what?” or “What now?”
Example: “We got 100,000 Facebook Likes last month!” So what? Did all those Likes turn into actual profits?
What to do after you discover the right metrics
Once you’ve discovered the right metrics to keep an eye on, your next step is to test, track, and tweak accordingly. Validate the numbers and see if they translate to actual growth. A/B test particular aspects of your website to see what works and what doesn’t.
For instance, if you’ve established that clicks on the “Add to cart” button is an actionable metric, then you should probably experiment on ways to increase that number. Just be sure to run A/B tests on just one specific component at a time so you can single out what works and what doesn’t.
When you discover the methods or actions that have a positive effect on your actionable metrics, be sure to take note and double down on those actions if you can.
Not all metrics are created equal. Ignore vanity metrics and only look at the numbers that count. To find those numbers, be sure to determine your goals and establish why your product, service, or website exists in the first place.