Metrics and data are the driving forces of business decisions. However, some metrics should have a greater influence on decisions than others. When making important business decisions, it’s crucial to know the difference between vanity and actionable metrics.
Oftentimes, businesses get wrapped up in engagement metrics, also known as vanity metrics. Using data collected from these metrics can lead to poor decision-making decisions for your business if analyzed incorrectly.
Here, we’ll discuss all you need to know about vanity metrics, including what they are, how they can be deceptive, and how to make the best use of them.
What Are Vanity Metrics?
Vanity metrics are measurable data, but these metrics do not add up to profit or sales. As a result, vanity metrics are not actionable key performance indicators (KPIs). Unlike actionable metrics, which provide specific reaction data from information like conversion rates, vanity metrics should never drive important business decisions.
Vanity metric examples:
- Followers
- Shares
- Views
- Likes
- Comments
- Subscriptions
- Total Customers
- Total Downloads
Vanity metrics can also be related to a specific event. For example, a business notices a profit increase after a celebrity tweets about them. Is the data a reflection of the truth? Often, vanity metrics can be misleading because they do not represent conversion rates, clickthrough rates, or data that is essential to understanding progress.
Vanity metrics become a focal point because they’re available quicker than actionable metrics. However, they might be creating a false sense of security.
How Vanity Metrics Are Deceptive
They’re easy to manipulate
Anyone can buy Instagram or Facebook followers. In one night, an Instagram account can go from 100 followers to 50,000 followers. Unfortunately, buying followers does not increase profits.
They don’t tell you ROI
Buying a Facebook ad might attract 10,000 likes, but this number doesn’t tell how many users clicked on the ad or bought the product. Without looking at conversion rates or clickthrough data, you have no way to know your ROI.
They can create a false sense of achievement
While an increase in followers or newsletter sign-ups can be a good sign, they create a false sense of success. Without measuring additional data, it’s impossible to know if a business is doing well. More data, such as clickthrough, conversion, and return rates, is required.
For example, a make-up business cannot use metrics collected directly after Anna Kendrick tweets about them to make long-term decisions. The business will need to track return rates over time, and sales may drop after the buzz dies down.
Missing context
When looking at metrics that impact decisions, it’s important to include all the details. Often, vanity metrics are vague and require additional data to support them.
Examples:
“We had 900 customers last year; 400 were returning customers.”
“The Twitter ad had 500 retweets with a 50% conversion rate.”
“Our website had 750 pageviews last month with a 25% bounce rate.”
Ways Vanity Metrics Are Helpful
Brand Awareness
Metrics such as likes, follows, and sign-ups indicate consumer awareness of your brand.
A/B Testing
Metrics obtained from subscribers or followers can be used for A/B testing to assess your marketing efforts. You can try different calls to action on your social media posts, then analyze which ones perform better and lead to greater conversions.
Sales Funnel Analysis
Engagement metrics can help you analyze where consumers are getting stuck in the sales funnel. For instance, are your posts getting likes and retweets, but consumers aren’t clicking on the link? This tells you that you might need a better call to action.
Alternatively, they may be clicking on the link and signing up for your newsletter but not taking further action. You can then analyze your newsletter analytics and determine where you’re losing them. If people aren’t opening your newsletters, you can work on crafting better subject lines.
We Can Help
Vanity metrics can provide helpful data if analyzed correctly. By using these metrics to understand your brand’s awareness, your audience’s preferences, and where they are in the sales funnel, you can better plan your next steps.
Understanding how to use all data available to your business is essential to building a solid marketing plan. If you’d like to get started with a media buying and planning agency with proven experience in tracking KPIs, contact the team at Bloom Ads today.