Introduction
In today’s data-driven business world, metrics are everything. They help organizations quantify and track progress, set goals, and measure results. However, not all metrics are created equal. Some are meaningful, while others are superficial and can lead to false impressions of success. These are known as vanity metrics.
If your business is relying on vanity metrics, you may be making decisions based on false assumptions, and this can lead to major problems.
The purpose of this article is to raise awareness about which KPIs may be vanity metrics and why they can be detrimental to businesses. We’ll also provide practical suggestions for alternative metrics that can be used to track progress and achieve real business success.
5 KPIs You Think are Important but are Actually Vanity Metrics
Vanity metrics are superficial KPIs that might make a business look good on paper but don’t necessarily measure success in any meaningful way. Here are five popular KPIs that might fall into the category of vanity metrics:
1. Social Media Likes and Followers
While high numbers of “likes” and followers on social media might seem like a good indicator of business success, they rarely translate to real ROI. Social media platforms are constantly evolving, and the algorithms that determine what shows up on a newsfeed are unpredictable. Additionally, clicking the “like” button is a low-effort action that doesn’t necessarily signal enduring interest or loyalty.
2. Pageviews and Traffic
Website traffic is often cited as a reliable measure of audience size and engagement. However, while pageviews, “unique visits” and traffic spikes can make a website look popular, it doesn’t necessarily translate to conversions or revenue. Increased traffic is nothing to sneeze at, but it’s important to remember that quality is more compelling than quantity.
3. Email Open Rates
Tracking email open rates is a common practice, but the number of opens a message receives doesn’t necessarily equate to success. Open rates don’t reflect subscriber engagement, and they don’t account for how motivated an audience is to read the email in question. A marketing campaign that turns a high volume of leads into closed sales is significantly more valuable.
4. Time Spent on a Site
Measuring how much time someone spends on a website is another metric that’s often considered important but is actually a vanity metric. Just because someone is spending time on a site doesn’t necessarily mean it’s quality time or that they’re going to engage with the brand in a meaningful way. Focusing on how much time someone spends on a site can also lead to bad UX decisions.
5. App Downloads
App downloads can be a good indicator of customer interest, but they don’t guarantee any actual business value. Buried beneath the numbers is the question of how much someone actually uses the app after downloading it. A low download rate is a problem, but a high download rate doesn’t necessarily mean that an app is compelling or useful.
Why Tracking These 5 KPIs Can Do More Harm Than Good
Focusing too much attention on vanity metrics can lead to negative consequences that can be damaging to a business. In fact, relying on them can even hurt your efforts to create a business that is data-driven and focused on real success. Here are some reasons why that’s the case.
Negative Consequences of Focusing on Vanity Metrics
- Not focusing on meaningful metrics: Vanity metrics can lead to a false sense of security, making companies overlook the metrics that really matter. Businesses are better served by measuring actionable metrics that enable strategic decision-making and identify ROI opportunities.
- Stagnation: Focusing on metrics that don’t need to grow obscures metrics that do. If a business thinks it’s doing just fine because its likes are up on Facebook this week, it stops trying to evolve and improve. This leads to both a lack of innovation and/or an inability to adapt to changes in the market.
- Waste of resources: The time, money, and energy that go into generating vanity metrics can be a drain on resources that conflict with business objectives. Instead, corporate efforts should be devoted to hitting clear goals that produce results that matter.
How Vanity Metrics Can Give a False Sense of Success
- Flawed conclusions: Because vanity metrics are internal-facing, a favorable outcome can be exaggerated, while negative data is hidden. This leads to a selective bias in data and a distorted understanding of what’s really happening in the business.
- No connection to business objectives: Metrics alone are meaningless. Tracking business success needs metrics that are connected to objectives. Vanity metrics are self-serving: they have no direct impact on success and are used for self-aggrandizement. Effective metrics are those that provide insight and identify areas for optimization.
Case Studies or Examples of Businesses that Suffered as a Result of Focusing on Vanity Metrics
Take a look at Bounce Exchange, a business that once relied heavily on Google Analytics metrics. In 2014, the company grew 30% to $25 million in revenue, charting its success by tracking popular vanity metrics. However, during the same period, its clients started complaining that the tools offered by Bounce Exchange weren’t resulting in high-quality leads or conversions. Blind to these complaints, the company continued to focus on their internal metrics, and eventually lost many of their clients.
The Top 5 Vanity Metrics That Won’t Drive Your Business Goals Forward
Most business leaders realize that focusing only on vanity metrics can be detrimental to their success. Here are five of the most common vanity metrics you should avoid and why they’re problematic:
1. Social media likes
Social media likes give you an idea of what people are thinking about your brand, but they’re not a good indicator of real business success. These metrics don’t account for awareness, consideration, or conversion, so they don’t typically drive meaningful business results.
2. Pageviews
While pageviews can show that a site is popular, they don’t necessarily lead to conversions or sales. More essential metrics like time on site, touchpoints, and conversion rate are much better indicators of meaningful engagement.
3. Email open rates
Email open rates don’t give you any insight into things like conversion rates or engagement. To really influence ROI, you need to look beyond open rates and focus on click-through rates, conversion rates, and lifetime customer value.
4. Time spent on a site
Time spent on a website can be a valuable metric, but only under the proper circumstances. It’s much more important to focus on the engagement that your site generates and the behaviors of visitors that lead to conversion. Businesses inspired by this metric often forget about what truly matters- actual conversion and the lifetime value of your customers.
5. App downloads
While a high number of downloads might seem like a good indicator of success, it’s not the case. The only real measure of an app’s success is how many people use it consistently over time. Metrics like daily active users and user retention rates are far more valuable.
5 KPIs You Should Stop Measuring ASAP
Based on the information above, here are the top five KPIs that you should stop measuring as soon as possible:
- Social media likes and followers
- Pageviews and traffic
- Email open rates
- Time spent on a site
- App downloads
Additional Reasons Why They Should Be Abandoned
- They don’t tie into real business objectives and therefore do not give actionable insight into how processes can be improved to achieve that.
- The effort and energy required may be better spent elsewhere.
- They can act as a way to veil problematic issues that need addressing sooner rather than later.
How to Remove These KPIs from Your Tracking Dashboard
Removing these metrics from your dashboard can be difficult, particularly when an organization has grown accustomed to them over time. Here are some practical steps to help you move beyond vanity metrics:
- Define clear business objectives that are traceable to KPIs– KPIs should be directly linked to strategic outcomes, such as revenue targets and customer retention goals.
- Focus on actionable metrics – The metrics that businesses focus on should clearly identify actionable insights that lead to process improvement and better ROI, not superficial appeal.
- Test the KPI – When introducing a new KPI, assess whether it meets the requirements of being meaningful, actionable and linked to strategic outcomes.
Is Your Business Focused on Vanity Metrics Instead of Meaningful KPIs? These 5 May Be the Culprits
After reading this article, you may realize that your business might be tracking more vanity metrics than meaningful KPIs. It is essential to evaluate your business’s key metrics and determine which ones are relevant. The metrics you measure should directly connect to business objectives. Don’t get caught up in measuring what sounds good or looks good on paper, and instead focus on developing an effective metric strategy that leads to real business success.
To summarize, these five vanity metrics don’t drive meaningful business results:
- Social media likes and followers
- Pageviews and traffic
- Email open rates
- Time spent on a site
- App downloads
If your company is relying on these metrics, it is time to rethink your approach. Instead, focus on metrics that are connected to business objectives and provide real insights and opportunities for growth.