The other day, a trending post on social media was “A company with less than 1500 followers wants to convince me that it knows how to generate & capture leads. Is that a joke or what?” and that post raised a discussion about vanity metrics.
The situation made us think that many companies do not know which metrics really measure success and real development, and how often metrics that are not always the best end up being the most valued and monitored.
What are Vanity Metrics?
Metrics : This is one of the words you hear the most in a results meeting, when defining a strategic plan and in the day-to-day of any company. If you've made it to this blog post, it's because you know that measuring and tracking progress through numbers is critical.
The problem, for some brands, is figuring out which metrics to focus on. Especially with the rise of digital, today almost everything is measurable. This ends up causing many companies to track many numbers at the same time, without being able to extract relevant information from them, or even track metrics that do not represent anything: the so-called vanity metrics.
These metrics are those that appear to quantify relevant numbers, but are actually unrelated to business goals. Vanity metrics create a false parallel between two pieces of data by illustrating relationships between them that don't have any real meaning.
Vanity Metrics in Digital Marketing
The definition and monitoring of metrics is a tool that we must explore, including in the departments and actions of the marketing and sales sectors. But it is important to be aware that, especially in the area of digital marketing, there are some numbers that shine in the eyes, but that deliver little in relation to the results that the company expects.
This becomes a problem, since metrics are used as a basis for decision making. If you keep track of the wrong metrics, you most likely won't see what really needs to be tweaked, improved, or invested.
3 Vanity Metrics Your Business Possibly Uses — And They're Leading Nowhere
Here we separate some of the numbers that arouse interest and that are frequently monitored, but that fall into this situation of vanity metrics.
CTR (Click rate)
One of the rates that doesn't show anything by itself, but that is quite popular when we talk about metrics that are tracked by marketing departments is the clickthrough rate. It shows you if you're being able to spark interest with your Call to Actions and get users to your pages.
This is one of the most commonly used metrics in the paid media arena. But a high click-through rate and a low conversion rate doesn't do much good, other than to show that something in your strategy and materials needs to be fixed.
The number of pageviews or visitors to a page can often just be a metric of vanity. Overall, these numbers reveal whether your communication efforts are driving more people to your website or blog.
But is your content being relevant to this audience?
Do these visitors have a purchase intention?
Other information that can be analyzed together to provide better context are: duration and number of pages per session, conversion and bounce rates, scroll depth (how far the visitor scrolls content before leaving the page), etc.
Understanding how many of these visitors take the next step and provide the contact for your brand or make a purchase is essential to determining the strategy's success.
The number of followers on a social network is one of the most common vanity metrics — it's even the metric that prompted us to write this blog post.
This number is sometimes understood as a metric that would reveal the relevance, influence and presence of a brand in the market when, in fact, the number reveals… just the number of followers on the page.
See, it could be that the page gets a lot of followers for the content it presents. But how many of those followers are actually there interested in buying? How many are engaged with the content?
Or, a company that focuses on generating leads and works more discreetly on Instagram, since its customers do not come from this channel, will also have a smaller number of followers. Does this mean that the company's results are bad? No way.
Unless you're a digital influencer, follower numbers are unlikely to be among your business outcome metrics. And even if this is the case, you should also consider your base engagement, rather than the isolated number of followers.
What are the most relevant digital marketing metrics?
The conversion rate is the percentage between the number of visitors to your conversion pages and the number of people who actually convert. And a conversion can be filling out a form, activating your online chat, registering to get a discount coupon, completing a purchase, performing a free trial, ore upgrading their plan.
It all depends on what you expect your visitor to do.
The conversion rate happens at various points in the marketing and sales funnel, from converting a visitor to a lead, from a lead to a qualified lead, and from a qualified lead to a customer.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost is a metric that makes it possible to understand the financial health of your company and the results of investments in Marketing and Sales.
In general, CAC is calculated as the sum of investments in these two areas divided by the number of customers acquired in the same period of time. Thus, it is possible to reach the average amount invested to win each of these customers for your brand.
By monitoring this metric, decisions can be made for the Marketing and Sales areas, as well as defining, based on data, the distribution of investment in actions that bring more effective results.
Lifetime Value (LTV)
Briefly, we can say that LTV (or Lifetime Value) is the metric that tracks how much your customer invests while consuming your company.
Since CAC is related to how much your company invests until a sale is made, LTV is related to how much your customer invests during the purchase/contract period.
This metric is essential especially when we talk about companies that work with recurrent sales or service provision.
How to define relevant marketing metrics?
Want to stop looking at vanity metrics and track metrics that really matter to your business? We've put together some tips for you to follow and not make this mistake again:
Understand what your company's goals are
As we said at the beginning of this content, the most important point before defining metrics is to ensure that they are linked to the business objectives.
So if you don't know clearly and objectively what those goals are, you also won't know what metrics will help you track whether you're getting closer to them or not.
With clearer objectives, in addition to metrics, you will also know how to distribute investments and efforts.
Take into account your audience profile
The metrics and channels that will be monitored are also related to the consumption habits of your audience. This is not only for the consumption habits of products or services, but also for information and entertainment consumption habits.
Understanding how your audience consumes and behaves will also give you a clue about metrics that might be relevant to your brand.
Define metrics that are easy to measure and understand
A good metric needs to have a few characteristics: it needs to be important, it needs to be simple to understand, it needs to be easily measurable, and it needs to be able to lead to positive action.
A metric that needs to be deciphered or that has no relevance when making decisions is of no use to us. Just stop wasting time monitoring vanity metrics that don't support growth and success.
Use tools that make tracking easier
Now comes the tools part. Use the right tools to extract all the data according to the channels and investments made.
Another very important point here is that this process needs to be registered. Thus, this monitoring and data extraction is not in the hands of just one employee and it is possible to easily consult the history.
Review whether metrics are helping decision making
The metrics need to bring knowledge about the actions and investments and, mainly, guide the decision-making regarding the maintenance of these actions.
From time to time, review whether the defined metrics are helping this process. If not, redefine which metrics might be most useful. There is no problem with making route adjustments.
Analyze metrics together to gain relevant insights
Some of the metrics we mentioned in this post can be considered vanity metrics when analyzed in isolation. But when they are observed in conjunction with others, it is possible to extract relevant insights to drive your marketing strategy.
Get inspired by other companies – but don't stop there
It's very worthwhile to benchmark to understand what metrics and average conversion rates other companies are tracking.
But it is important to understand that, even with companies from the same segment, the metrics used can vary a lot, since each company has different business configurations and their specific goals to follow.
We hope this content has been helpful for you to reflect on what your success metrics are and what your vanity metrics are.