You’ve probably heard that data in the new oil. The whole world seems to be going nuts over it. Marketers want to understand their consumers. Customer service wants to get a handle on user experience. Finance needs to track efficiency. Logistics managers want to cut back on delivery time and cost. Every department is at least trying to use data to get better. More than ever, it is possible to collect and process massive amounts of data.
However, not all data is born equal. With all the graphs and analytical tools available, one might be forgiven for getting carried away. Vanity metrics are statistics that look good on paper but are in reality meaningless. More scientifically put, they are measures that show improvement but are unrelated to your business goals and mission.
A great example of a vanity metric would be web traffic. Let us say you are running a display ads campaign driving people to your website. Your website will definitely receive higher traffic. The campaign is a success, right?
Well, not really.
If your website is selling something, the traffic is not very relevant if your sales don’t change. If you are showing content, the number of repeat visits might be more relevant unless you plan to run search campaigns perpetually. Maybe you need more subscribers to grow the website audience?
How to tell if your metrics are vain
The most important thing to keep in mind here is context. Whether a metric is a vanity metric or not entirely depends on what success is for the business. In this situation, does measuring website traffic help you measure the effectiveness of your campaign? If your goal was simply awareness, then perhaps. If you are comparing different types of ads the metric could be useful. But for goals like sales, conversions, subscribers or actual web audience, you need to dig deeper.
There are multiple other examples of metrics that might be considered vain. The number of visits to a shop, likes on your Facebook page, visitors to your stand even number of customers. There is a simple rule to avoiding vanity metrics in your data. Ask yourself, will this information help me make better decisions in meeting my business goal? If the answer is no, then your just being vain. If the answer is yes, then you are on the right track with actionable metrics.
Article by Glenn Ogolah.