Digital Marketing in today’s world means that there are oceans of data analytics to process and numerous metrics to measure and quantify performance. A goal that all marketers strive for is to eliminate assumptions and objectively evaluate campaigns with the most accurate readings.
A flipside to this data mining however is that not all metrics give an equal and accurate portrayal of product integration in the market.
Vanity metrics are exactly what their name implies: indicators that flatter marketers rather than honestly judge their performance, for example, likes or reactions (love, share, comments) on content.
One might assume these metrics are rare and an indication for growth and integration, yet marketing experts predict that 60% of CMOs will halve their analytics departments by 2023 because data isn’t delivering the intended value.
The problem, most likely, is that marketers use data to produce vanity metrics instead of the insights they really need.
To understand this further, let’s look at email reply rates as an example.
No one denies that email replies are an important step in the sales funnel, but a 100% reply rate can translate to 0% sales. That’s not to say that revenue is the only metric that matters.
In reality, vanity metrics are benchmarks that marketers or their teams could hit while failing at the overall goal.
The problem with vanity metrics
Vanity metrics are like fool’s gold: They trick you into a false sense of success. They give marketers an inflated sense of accomplishment.
Even worse, they distort performance, leaving marketers surprised when campaigns that seemed successful according to vanity metrics ultimately fail.
To understand the full consequences, consider a common metric like the number of likes on a photo of a new product. Lots of people might hit the like button, tag a friend or even comment on how the product is great, but if they’re not buying the product as well, that number of likes doesn’t really matter.
By contrast, actionable metrics tell you exactly what you need to know. For example, marketers need to know what kinds of messaging, content, and experiences turn individuals into customers.
Embedding tracking links into calls to action let marketers track a customer’s exact path to purchase and then mimic that journey with future customers.
Marketers need to learn how to recognize vanity metrics because marketing technology solutions don’t make it immediately obvious.
Tools designed to collect and analyze data have an obvious incentive to suggest that every metric is important.
Some are better than others at separating the wheat from the chaff, but it should ultimately be up to marketers, not their tech tools, to identify what’s important.
Actionable Metrics that really matter
In general, vanity metrics measure things that people consume passively, whereas quality metrics measure actions that people take.
When someone agrees to engage with a piece of content or a call to action, they are consciously agreeing to move down the sales funnel.
Often, the most important metric to track is the lowest-level opt-in that all customers share — the point where casual observers turn into active buyers.
From there, these metrics make for good-quality benchmarks marketers can rely on to gauge their success.
Engagement rate:
To say that all likes, comments and shares are meaningless would be an inaccurate statement. When people are engaging with your social media profiles with views, comments, and shares, they’re also increasing how often your profile pops up in consumers’ feeds, giving you exposure to new potential buyers who may be less active with impressions, but more reliable customers.
Competitors’ follower count:
People who are following your competitors but not following you are target customers you’ve failed to attract. Look at what kind of content they’re following, then adjust your own to draw in these leads.
Prospect/Lead conversion rate:
This metric shows how efficiently any given campaign is converting viewers into “buyers” — people who have agreed to a sales action of some sort, such as scheduling a demo or signing up for a trial. This conversion rate is the North Star for many marketers at high-growth companies.
Click-through rate (CTR):
A campaign with a high click-through rate is one that excels at generating leads. Study what worked in that email or landing page and use the same strategy to spur action in future campaigns. Marketers have limited time and resources to make a big impact, which is the best argument against vanity metrics.
They only waste what matters most, and they hide bad news until it shows up on the bottom line. Instead of wasting time and energy on boosting vanity metrics, focus on the numbers that will help you reach your goals.
At Finyki, we ensure that there’s honest and transparent reporting that tells our clients that how the prospects are engaging with the brand, what’s working, and how to we can improve further to increase the ROI.