What are Vanity Metrics?

Vanity metrics are metrics that make you feel good but don't actually indicate performance or progress towards meaningful goals. They tend to be metrics that are easy to inflate or game, rather than measuring true outcomes. Some common examples of vanity metrics include:

• Social media followers/likes

• Website visits or pageviews

• App downloads

• Email subscribers

Vanity metrics provide the illusion of success because it's easy to increase them through promotional tactics or even paying for more followers/downloads. However, a high number of followers does not necessarily translate into engaged customers. Lots of pageviews doesn't mean people are actually finding your content valuable. There's often a disconnect between vanity metrics and business results.

The key characteristic of vanity metrics is that they focus on size and scale rather than effectiveness or quality. They measure activity rather than outcomes. Vanity metrics can make you feel good, but won't actually tell you if your strategies are working. They provide hollow or misleading statistics that don't help inform good decision making.

The Appeal of Vanity Metrics

Vanity metrics have an understandable appeal - they feel good and give you instant gratification. Getting more followers or likes gives you a rush, and seeing your download counts tick up makes you feel like you're reaching scale. Vanity metrics are also easy to understand and share - everyone gets what a "like" means.

The problem is that vanity metrics only show size and scale, not actual effectiveness or results. Having a million followers doesn't help if none of them are engaged or converting. Just because something is easy to understand doesn't mean it accurately indicates performance. Vanity metrics make you feel successful without actually helping you achieve success. Their appeal lies more in psychology than practicality - they play to our desire for quick wins and validation.

It's tempting to focus on vanity metrics because they're like candy - sweet but not very nutritious. To build a successful business though, you need metrics with real meaning and impact, not empty calories. The appeal is superficial - it's time to go beyond the vanity.

The Problem with Vanity Metrics

Vanity metrics may feel good, but they don't actually help move your business forward. There are a few core issues with vanity metrics:

• They don't correlate to business goals. Metrics like likes, followers, and pageviews tell you about the scale or popularity of your content. But they don't actually tell you if that content is achieving business objectives like sales, signups, or customer retention. Just because something is popular doesn't mean it's effective.

• They lack proper context. Pageviews alone don't tell you much without additional context like bounce rate, time on page, or pages per visit. High numbers with low engagement metrics indicate a problem. Metrics should provide insights, not just big impressive figures.

• They're easy to manipulate. Many vanity metrics like followers and social shares can be bought or falsified. They often measure activity, not quality or outcomes. This makes it very easy to "juice" vanity metrics without creating real business value.

The bottom line is vanity metrics look great on the surface but fail to provide actionable insights. They lack the context and correlation with key business goals to drive strategic decisions or meaningful optimization. Focusing too much on vanity metrics leads to misguided priorities.

Examples of Common Vanity Metrics

Some of the most common vanity metrics that businesses track include:

Social Media Vanity Metrics

• Number of followers

• Number of likes

• Number of shares

While it feels good to have lots of followers and likes on social media, these metrics don't actually indicate how engaged your audience is or if they take action based on your content. 100,000 followers doesn't help much if only a handful engage with your posts.

Web Traffic Vanity Metrics

• Number of hits or impressions

• Number of visitors

Hits, impressions, and visitors seem impressive, but they lack context. 100,000 visitors means little if they're all bouncing in the first few seconds. Pageviews without time on site, bounce rate, and goal completions don't provide meaningful insights.

Email Marketing Vanity Metrics

• Open rate percentage

• Clickthrough rate

High open and click rates feel great, but they don't show how many subscribers actually converted or made a purchase. You need conversion metrics to see true email marketing impact.

The key is to look beyond superficial vanity metrics and focus on metrics tied to business outcomes. Track metrics that provide context and indicate user engagement, retention, conversions, and lifetime value. Don't get distracted by big numbers that lack meaning.

When Vanity Metrics Can Be Useful

While vanity metrics generally don't provide deep business insights, there are a few cases where they can serve a purpose:

For Internal Morale or External PR

Vanity metrics like social media followers or shares can help boost internal morale and provide bragging rights externally. Getting to 100k followers on Instagram or 1 million views on YouTube is an exciting milestone that makes a company feel good and look impressive in press releases or media coverage. As long as the limitations are understood, sharing vanity metrics can energize employees and build positive public perception.

To Set a Benchmark for Improvement

Vanity metrics often provide easy baselines to measure against over time. Tracking followers, subscribers, or website visitors month-over-month can reveal growth trends even if the absolute numbers lack deeper meaning. As long as the definition and methodology for collection remains consistent, vanity metrics can show progress that provides clues for where to dig deeper with actionable metrics.

To Identify Content Opportunities

Highly-shared or viewed content can indicate topics that resonate with your audience. Analyzing vanity engagement metrics around different content can reveal themes and styles that people respond to. This provides ideas and creative direction to produce more of that content. Just be sure to validate those assumptions by tying content themes to business outcomes through actionable metrics.

Vanity metrics have their place, but should always be taken with a grain of salt. While celebrating exciting vanity milestones or analyzing vanity metrics over time can provide value, critical business decisions require data tied to real outcomes. Understanding the appropriate uses and limitations of vanity metrics allows you to gain insights from them while prioritizing meaningful metrics that truly impact results.

What are Good Metrics to Track?

When choosing metrics, it's critical to focus on metrics that are tied directly to your key business goals and provide proper context that leads to actionable insights.

Some examples of good, actionable metrics include:

• Revenue - Keep track of overall revenue, revenue by product line or service, monthly recurring revenue, churn rate, etc. Revenue metrics are a direct measure of business performance.

• Conversion Rates - Monitor conversion rates across your customer journey - trial signups, freemium to paid conversions, email click through rates, etc. High conversion equals more customers.

• Customer Lifetime Value - Measure CLTV to quantify customer loyalty and see the revenue impact of retention efforts. Maximizing CLTV should be a priority.

• Engagement Metrics - Track social engagement, time on site, email open rates, support tickets, and other signals of customer interaction. High engagement precedes conversion.

• Cohort Analysis - Analyze metrics over time across customer cohorts to spot trends. For example, monitoring monthly recurring revenue by monthly cohorts can uncover churn issues.

• Cost Per Acquisition - Calculate CPA for marketing channels to identify the most cost-effective sources of customers. Lower CPAs mean cheaper growth.

The key is choosing metrics that provide context around performance rather than standalone vanity metrics. Track metrics over time, segment by factors like channel or cohort, calculate ratios like conversion rates, and always tie back to overall business goals. This leads to metrics you can take meaningful action on.

Moving from Vanity to Value Metrics

The key to moving beyond vanity metrics is to clearly identify your business goals and desired outcomes, then work backwards to determine which metrics actually drive progress towards those goals. Here are some tips:

• Start with your goals. What does success look like for your business? Is it more sales, higher retention, increased conversions? Define the 1-3 most important outcomes.

• Identify leading metrics. For each goal, determine 1-2 metrics that directly influence or drive that outcome. These are your leading metrics or key performance indicators (KPIs).

• Test for correlation. Don't assume there is a connection between a metric and goal. Validate that improving the metric actually lifts the goal metric too.

• Track over time. Once you've identified correlated metrics, monitor them consistently over weeks and months.

• Set targets. Establish baseline metrics then set goals to improve them by X% over time.

• Optimize and test. Try different strategies for optimizing your leading metrics and see which lift your goal metrics.

• Reevaluate periodically. As business conditions change, ensure your metrics and goals are still aligned. Retest assumptions.

With clearly defined goals guiding your analysis, you can shift focus away from vanity metrics to the handful of measurable, valuable metrics that truly impact business growth. But you won't know which those are unless you do the work to test for and validate correlations between metrics and outcomes.

Optimizing for Actionable Metrics

Rather than taking metrics at face value, you need to dig into them and understand how to incrementally improve each metric through testing and optimization. Products like Flywheel help with most of the recommendations below by connecting product and marketing data. Here are some tips:

• Set up A/B tests for key pages or campaigns, testing different elements like headlines, calls-to-action, images, content, etc. Look for statistically significant changes in engagement or conversion rates between variants.

• Segment users and look for differences in behavior or metrics across marketing channels, user demographics, geography, referrers, etc. Look for opportunities to better target and optimize based on these insights.

• Analyze the conversion funnel and identify any major dropoffs in each step. Prioritize optimizing pages or touchpoints with the largest dropoffs first.

• Look at micro-conversions that make up a larger goal and optimize each step individually. For example, optimize separately for email open rates, click-through rates, landing page views, form fills, purchases, etc.

• Calculate the monetary value or return on investment of increasing certain metrics by specific amounts. Use this to focus optimization on the changes that would have the biggest financial impact.

• Set numerical targets for improving metrics over time, rather than just standard week-over-week or month-over-month comparisons. Strive for compounded growth.

• Be relentless about testing and learning. No metric can be reliably improved without constant experimentation and analysis. Measure results, tweak, repeat.

Optimizing for real metrics takes work, but it pays off exponentially compared to vanity metrics. By doing the research, segmentation, testing and financial calculations outlined above, you can make data-driven decisions to maximize the metrics with the greatest business impact.

Common Actionable Metrics by Industry

Each industry has a unique set of outcomes they aim to achieve and metrics that are meaningful in driving those outcomes. Here are some examples of actionable metrics to track for common business models:

Ecommerce

• Conversion rate - The percentage of visitors that convert into customers. Aim to increase this over time.

• Average order value - The revenue generated per order. Growing this indicates customers are buying more per transaction.

• Lifetime value (LTV) - The total revenue generated from a customer over their lifetime. Maximize the LTV compared to acquisition cost.

Publishing

• Engagement - Metrics like time on page, scroll depth, and repeat visits show content resonating with readers.

• Loyalty - Subscribers and email list growth builds reader loyalty. Increase open and click-through rates over time.

• Social sharing - Content being frequently shared helps expand reach and readership.

SaaS

• Churn rate - The percentage of customers canceling per period. Minimize churn by improving product-market fit.

• Retention rate - The inverse metric, the percentage of customers retained each period.

• Net promoter score (NPS) - Measure of customer satisfaction and loyalty on a scale of -100 to 100. Increase NPS with product improvements.

Focusing on the right metrics for your business model leads to data-driven decisions that truly impact growth and success. Vanity metrics may feel good, but actionable metrics steer progress.

Key Takeaways

• Focus on outcomes, not outputs. Vanity metrics measure outputs like followers and pageviews while actionable metrics measure outcomes like sales and retention. Keep your metrics aligned to real business goals.

• Validate the correlation. Just because a metric is easy to track doesn't mean it impacts outcomes. Test which metrics actually drive results for your business.

• Optimize over time. Set a baseline for your metrics and track changes over time as you test and optimize. Improving actionable metrics will improve real outcomes.

• Educate your team. Share examples of vanity vs actionable metrics. Teach the proper context and use cases for metrics to avoid misinterpretation.

• Review your current metrics. Audit the metrics you currently track. Identify potential vanity metrics. Replace them with actionable metrics tied to your goals.

• Focus on insights. Use metrics to gain meaningful insights into your business. Metrics should inform strategic decisions and improve outcomes when optimized over time.

The bottom line is to identify and track metrics that truly impact your business goals. Avoid getting distracted by vanity metrics that just make you feel good. Take time to validate and optimize metrics that drive real growth and improve outcomes.