Knowing Your Analytics: Vanity Metrics Vs. Actionable Metrics

by Kerry Butters last updated on

Metrics, metrics, metrics. Nearly every marketer is obsessed with the numbers: how many sales? How many email opens? How many social shares? Normally, you will have the software installed that keeps a close eye on all of these figures (plus a lot more besides) and turns them into a very handy visual (usually a graph) that displays all the peaks and troughs over the past few days, weeks, months and years.

Marketers are obsessed with KPIs and metrics because, simply, the rising numbers make them feel good. And of course, if the numbers are rising then you must be doing something right. If you had 5,000 hits on your website in October, 6,000 in November and then 8,000 before Christmas, then it is very natural to get excited, give yourself a pat on the back and perhaps even buy a round of champagne for your dedicated team at the end of year office party.

But what does 8,000 hits to your website really mean? What does that equate to? Indeed, what is this metric actually telling you?

Well, not a lot, to be frank. It will most likely be extremely hard to pin down exactly what you did differently over the past couple of months that actually caused this spike to happen. The chances are that the extra traffic probably didn’t even convert into any more clients or sales – it is a vanity metric, nothing more.

Things you should know about metrics:

Vanity Metrics Are What Keeps The Big Dogs Happy

There will no doubt be a powerhouse handful of stakeholders that you will be reporting your metrics to. And they will want to see progress. And you will want to impress them with all those tasty statistics that show ‘growth’. Vanity metrics are the godsend of the boardroom – when all else is failing, at least you’ve managed to accumulate an extra 10,000 followers on Twitter, which has directly resulted in 1,500 more hits on the company’s website – so you must be doing something right. Phew.

But, vanity metrics don’t tell the whole picture, and, most importantly of all, they don’t communicate any knowledge that is at all useful or even practical.Lauren Smith defines vanity metrics as “a number that indicates improvement but is disconnected from the progress of your organization’s mission.

So, what’s your organization’s mission? Well, it’s more conversions, plain and simple. But more visitors to your site does not necessarily mean more conversions. You can spend thousands of dollars on Google AdWords and Facebook ads, Twitter promotions and all the rest, and yes, you will almost certainly find yourself inundated with extra traffic as a result – but if you’re not making the conversions, then this is simply money down the drain. It’s just junk traffic, and not really worth very much at all.

The same goes for email opens. How much do they actually tell you? How about click-throughs? Unless you know all the key important email metrics like average return per email sent, you don’t know how much value your email campaigns actually generate.

Actionable Metrics

What you, as a marketer, should really be paying attention to are the metrics that actually translate into something useful that will help you to make a decision about your future strategy going forward. These are what we call actionable metrics, and they normally require a little more forethought and planning to acquire.

To take your website traffic as an example again. Say if you added a new feature to it, but you did it using A/B testing, where half of your visitors saw the new feature and the other half didn’t. If, after a couple of weeks you notice that group A who saw the new feature resulted in 30% more conversions than group B who didn’t, then you have an actionable metric right there that tells you exactly what to do – i.e. roll out the new feature to 100% of your audience. From there you should then be inspired to conduct further tests of a similar nature and really see what difference you can make, and, most importantly of all, exactly what it is that is making the difference.

A/B tests – or split-tests as they are sometimes known – produce the most actionable of all metrics, and you should focus on these very closely. Put simply, they either confirm or refute a hypothesis. They should help you learn more about your business as well – if a particular test doesn’t turn out the way you expected, you need to ask yourself, what does this say about my customers and my business?

There are some good third-party tools for producing A/B tests if you don’t already have a system in-house for conducting such a thing, but I have to recommend Google Website Optimizer to get you started.

Other Actionable Metrics

Per-customer Metrics

Don’t just look at something like pageviews over a given week or month, but instead focus on the pageviews at a closer level. Compare pageviews between new customers and returning customers (and your analytics package should be able to break this down for you). If you’re getting a lot of engagement from new customers, you should be able to pin down why – if you’ve got a new product launch, for example, or perhaps you wrote a blog that linked to something that was trending on social or in the online press.

The point is, don’t just focus on the aggregate data, look at the particulars, and consistently ask yourself why, why, why?

Funnel Metrics

These are a particularly useful kind of per-customer metrics that should be scrutinized closely to determine your on-going decision making processes and strategies. For example, you might have a product that has some key lifecycle events. These might be: registering for the product, accessing the free trial, becoming a paying customer.

This will produce for you some very clear actionable metrics over time. You will be able to clearly see, for example, exactly what percentage of customers who registered for the product went on to sign up for the free trial, and then what percentage of those became paying customers. Within each lifecycle action you will be able to determine if the numbers are shifting up or down, at which point you will need to jump in and investigate, and from then start experimenting with some A/B testing to convert as many people from the first group to the paying customer third group as possible.

Put simply, marketers should only ever measure what matters. And that means looking at the people who are visiting your site on a micro level, conducting some split-testing to see how they can be influenced, and then implementing the changes based on the results.

And, just as a final word to reiterate – just remember that it is conversions that you want to focus your efforts on, not your traffic.

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