Every marketer knows the value of metrics and statistics. Whether you're trying to push for a certain marketing strategy or identify your target demographic, there's nothing more convincing, no more-powerful influencer, than a wealth of dazzling metrics – as long as there's some substance behind the dazzle.
Metrics don't always tell the whole story; but all too often, marketers rely upon vanity metrics rather than actionable metrics based on solid, valid testing methods. Here's an overview of how to avoid vanity metrics and make the move toward substantial, actionable metrics that tell the story you need to hear.
The Dangers of Vanity Metrics
If a metric doesn't involve taking an action, it's a vanity metric. Likewise, actionable metrics are the statistics that result from repeatable, proven actions you can take to improve and grow your business. In essence, actionable metrics generally involve a number of steps that break down the data until the core results are reached
As an example, a retailer might notice thousands of Facebook likes and lots of visitors to the brand website and think that the business is successful; but these are vanity metrics.
In comparison, if the same retailer instead starts investigating the customer average order value (AVOV), notices a decrease in revenue, identifies the cause and fixes the problem, the retailer's actions have resulted in an actionable metric.
Here are some examples of vanity vs actionable metrics:
• Numbers of website visitors
• Numbers of Facebook likes or Twitter followers
• Numbers of email subscribers
• Tracking conversion rates
• Results from A/B testing
• ROI Calculation
• Flow reports on visitor behavior
• Identifying high-quality leads vs low-quality leads
When it comes to vanity metrics, web traffic is one of the biggest offenders, because the number of visitors to your site isn't as important as the number of people who buy your product or service. Likewise, the people who give your Facebook page a "like" aren't going to help you pay your employees' salaries unless they ultimately buy something from you.
If you have 1,000 visitors to your site, it doesn't follow that your revenue is growing. Your 1,000 visitors are a vanity metric; but the good news is that you can convert this information into an actionable metric through strategies such as data analytics, split testing, retargeting, better lead generation and streamlining your ad campaigns.
1. Identifying and Analyzing the Most Effective Customer Numbers for Your Website
Data analytics involves breaking down the data in your metrics until the truth is revealed. With every customer that crosses your path, you'll want to know how the customer found you, if they had a good experience, whether or not they plan to buy from you again, and whether or not they'll tell others about you.
When you're looking at your website traffic numbers, you need to concentrate on where the traffic is coming from and what's driving it. This would include results from sources such as customer flow reports, traffic analytics and customer profile analytics. You also need to pay attention to customer behaviors – how long people stay on your site, how often they return and how much they spend while they're there.
In addition to tracking your customers, it's also a good idea to test your website logistics, because a slow-loading site or faulty checkout page can make or break a sale.
2. A/B Testing
This involves adding a single feature to your site or ad – such as a new creative, or a different font, color or graphic – and showing the altered site/ad to half of your viewers, while showing the original to the other half. A few days later, if you notice that the altered site is generating more interest, via clicks or revenue, then you'll know to make the alteration.
Split testing is a prime example of how you can take a vanity metric – such as the 1,000 viewers mentioned above – and leverage it into an actionable metric that will lead to conversions and sales.
3. Use a Funnel Approach
Marketers know about the classic marketing funnel, a sort of pyramid that tracks the customer through each stage of the journey, from making an initial search and visiting a site to making a purchase. Everything has a lifecycle – a series of steps from start to finish; and you can use this same funnel approach with per-customer metrics.
For example, consider a marketing campaign for a magazine, where customers are offered a free issue, then a trial 12-week subscription at a reduced price, then a full-year subscription at a standard price. You can track the individual customer metric by first looking at how many people downloaded the free copy. Next, identify how many of those people went on to take a 12-week subscription. Finally, pinpoint how many of those 12-week subscribers went on to purchase a full-year subscription. This funnel is an actionable metric, producing numbers that realistically chart the progress of a customer from first visit to conversion as a purchaser.
4. Improving the Quality of Your Lead Generation
Instead of looking at conversions, you'll learn a lot more by tracking conversion rates, as well as the average order value (AVOV) from visitors to your site. The quality of your conversions originates directly from the quality of your leads. That's why it's important to implement a lead-monitoring strategy that enables you to distinguish between low-quality and high-quality leads.
For example, Google Analytics can track low-quality leads and identify the ad components (such as keywords) that generated them. This information can be leveraged into an actionable metric to help you refine your marketing strategies.
Here are some examples of low-quality vs high-quality leads in vanity and actionable metrics.
You've just posted a funny video on your Facebook site, and you've noticed a spike in traffic. This might be because the video has gone viral; but a viral video doesn't translate into increased revenue. However, if your site is having a sale and your visitor numbers have increased, chances are you'll see a spike in sales as well. A video gone viral might not bring any paying customers to your site, so those increased numbers are a vanity metric. Likewise, having a well-publicized sale can result in a revenue boost, which would be an actionable metric.
If you have a home improvement store and offer a free DIY e-book on your site or social media platforms, you might have 500 downloads; but it doesn't necessarily follow that these viewers will proceed to your site and purchase anything. As a result, the 500 downloads would be a vanity metric, not resulting in any significant conversions. On the other hand, if you posted a DIY video and offered a discount coupon at the end, this might lead to a large number of conversions as people go to your site so that they can use your coupon to buy the materials they need. This higher conversion rate would be part of an actionable metric.
5. Focusing on Per-Customer Metrics
To reverse an old expression, with vanity metrics, you can't see the trees for the forest. In other words, you're looking at the big picture and omitting to look at the details, the analytics of the individual customers in your target demographic. Here are some examples of per-customer metrics:
Pageviews: Look at the pageviews per customer, not the pageviews for the entire site. Which pages are customers looking at? What are they most interested in seeing on your site?
Time spent on site: Look at how long a customer is spending on your site. Are they staying long enough to buy something?
Customer average order value (AVOV): How much is a customer spending, on average, on your site?
Thousands of web page views and social media likes may make you feel good; but they can be a mirage, a distraction that gives you a false sense of accomplishment. In the end, it's all about having data that matters and tells the whole story for each individual customer, from search to conversion. By focusing on customer metrics and higher-quality leads, you can convert inflated vanity numbers into viable actionable metrics that really mean something to your company.