What is a vanity metric?

Vanity metrics are feel-good data – they’ll make you all warm and fuzzy inside, but they don’t directly help you make decisions that will affect anything meaningful in your business.

They tend to be absolute numbers with little context or sense of causality. If you’re looking at a metric and you see it change over time, but you can’t easily figure out why it’s changed or what you can do to impact it directly, then you’ve probably got a vanity metric on your hands.

Some examples include:

• Total customers – This number will almost always increase over time. Without supporting metrics to show how much your customers are spending, how long they stay customers for and how much it cost to acquire them, focusing on this metric alone is unlikely to be valuable in and of itself.
• Downloads – A mobile app could get millions of downloads, but does anyone actually use it?
• Number of Twitter followers – You could have hundreds of thousands, but are they really engaged with your brand?
• Time on site – What does this actually mean? Looking at this alone, there’s little indication of how increasing time on site creates actual business value.

There are of course exceptions when it might make sense to look at these, and often it’s circumstances specific to your business that can determine whether a metric is a vanity metric or not. That’s why being able to identify a vanity metric is an important skill that’s worth refining over time.

What is an actionable metric?

If vanity metrics are unhelpful and fail to drive business value, actionable metrics are much more likely to enable you to spot trends, realize problems, and help you make decisions that help you achieve your goals.

For example, a savvy manager might take the vanity metrics above and break them down into metrics that the team can actually impact with their work day-to-day:

• Average order value instead of total customers – Understanding and monitoring the revenue generated by specific types of buyer will better inform you of where opportunities to optimize exist or where money is being left on the table.

• Monthly Active Users instead of Downloads – Understanding how many downloaders of your app actually continue to use it is much more useful for understanding engagement.

• CTR of social posts instead of number of Twitter followers – Is your activity actually generating useful traffic? Monitoring the conversion rate of social traffic to a revenue event would compliment this greatly.

• Conversion rate of key pages instead of time on site – Can you optimise your content, page design or traffic sources to get more customers rather than simply having visitors spend more time on your pages?

Actionable metrics tend to be very specific and work best when focused on in small quantities – too many and their impact will be diluted.

So how can vanity metrics ever be useful?

Let’s be clear, a solid set of actionable metrics is the foundation of any good dashboard. But at the end of the day, dashboards (especially TV dashboards) are there to serve people. And because people have different expectations, mixed levels of interest in data and varied perspectives, devoting a little space on your dashboard to vanity metrics can go a long way.

In what ways can vanity metrics help?

• Getting your team engaged with your dashboard: Because of their feel-good-factor and often fast-moving nature, vanity metrics can be great for generating interest in a dashboard throughout the day, and therefore give added visibility to your other (hopefully) actionable metrics.

• Motivating people: Some metrics, like number of customers, can have a motivational effect, even if they aren’t actionable.

• Providing useful background information: Even if they can’t directly impact decision making, some vanity metrics are useful to know regardless.

• Creating context for PR, stakeholders and customers: Although superficial by themselves, metrics such as revenue, number of customers and headcount can be useful for giving people outside of the company context around the company.

• Fostering transparency: Having a radically open culture is increasingly important to a number of companies, and making certain vanity metrics freely available on a dashboard can support a drive to be more transparent.

Summary: How to use vanity metrics sensibly

• Make sure you have a foundation of solid actionable metrics
• Recognize when you are handling a vanity metric
• Be very clear on what your purpose is for sharing it
• Never let a vanity metric direct actions

Vanity metrics on your dashboard: Are they always so bad?