How Vanity Metrics Gamble with Your Business

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vanity metrics

Vanity metrics are the perfect Cloak of Invisibility.

“How is it going?” your boss asks. “Fantastic, our website had thousands of views last month!” you answer. “Did they like what they saw?” wants to know your boss. “They sure did, they spent around 3 minutes on this website each and 56% of them were returning!” you reply.

You have just used your Cloak of Invisibility to hide that you have no idea what you’re talking about. You just made your boss feel good about the numbers, but you hid that you probably have no strategy for further actions.

Let’s learn how to take action against that – and say no to useless metrics. But before that, let’s learn what vanity metrics are.

The definition of vanity metrics

In short, these are the metrics that may look great, but won’t necessarily help us make correct business decisions. Here are some examples: number of visits on your website, average visit duration, bounce rate, number of subscribers or number of downloads.

A good way of indicating whether a given metric is a vanity one, is the investor test.

Take a look at your metric and ask yourself: if I tell an investor about this metric, will they be able to estimate whether it’s worth putting money into your project?

For example, if you tell your investor that an online game you’ve made was downloaded ten thousand times, they won’t be able to tell if it would pay off investing in it. However, if you tell them how many active users you have, whether they engage often and what are your profits, they will be able to take an action.

vanity metrics

Vanity metrics vs actionable metrics

The main difference between vanity metrics and actionable metrics is that while the first ones look good on paper and can make a layman feel good, the second ones will convince you to take action and make meaningful decisions.

But what does it mean?

For example, if your goal is to increase revenue, you need to focus on one of the strategies below:

  • Increasing the number of customers,
  • Increasing the average transaction size,
  • Increasing the frequency of transactions per customer,
  • Raising your prices.

Now, let’s imagine that you’re tracking one of the vanity metrics, page views for example. You see that they increased by 30k since the beginning of the year and your customer base has slightly increased, too.

Does this information give you any idea about what you should do? Of course not.

You should focus on these meaningful, actionable metrics instead:

  • The number of leads (month/quarter/year),
  • Total revenue (month/quarter/year),
  • Conversion rate,
  • Net profit,
  • Order value,
  • Customer’s lifetime value,
  • Number of transactions.

The difference between any of the metrics above and a vanity metrics is that every time you see specific number going down, you know you have to act to avoid going bankrupt.

vanity metrics

Google Analytics – guilty as charged

While Google Analytics is a fantastic tool for gaining data, it is very often used in an appropriate way.

Let’s say this straight, most of GA users opening data from their reports are looking at tons of data GA provides, then choose the metrics that look best and report on them only. It creates a completely unrealistic view of your business and makes it impossible to find out a way to improve it.

If you don’t want to get stuck with meaningless metrics, here are a couple of Google Analytics filters you must implement on your website:

  • Exclude the internal IP (you won’t believe how much traffic comes from your own IP),
  • Ecommerce tracking (so you know where your most valuable customers come from),
  • Goals (e.g conversions),
  • Site search (thanks to this you’ll find what are your customers looking for on your website),
  • Campaigns (it lets you to measure the ROI of your marketing campaigns).

But the truth is that for every goal, you should monitor different metrics.

As an example, let me show you three goals that are the most important for our company:

  1. Satisfy our customers and help them accomplish their goals thanks to using our tool,
  2. Share our knowledge and experience so our customers can profit and become experts as well,
  3. Earn enough income to be able to do what we love.

It means that we will focus on all customer-related metrics like everything around:

  • customer satisfaction (e.g. chat satisfaction, ticket resolution satisfaction, customer service ratings),
  • content marketing (e.g. engagement, traffic, lead attribution, CTR),
  • Most important revenue statistics.

Don’t let the vanity metrics fool you

While having business metrics is essential for growth, some of them can do you in. You might fall into believing that your business is doing great while you should be focusing on developing your strategy.

So, every time you come across a metric, a good way of checking if it’s really useful for you is to ask:

  • Does it help me gain more revenue?
  • Does it help me gain customers?
  • Does it explain why website visitors are visiting my website?

Thanks to this, you’ll always know which metrics are good for your business – and you won’t let the numbers fool you.


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