Which Metrics Really Matter to Your Business?

Generally speaking, marketers’ main goals are to move one of two needles: revenue or brand awareness. When evaluating success, however, many marketers may waste time on vanity metrics. These vanity metrics, which often come in the form of seemingly important metrics such as page views and social media followers, can make marketers look good or feel accomplished, but do not help their organization understand the most efficient ways to move those needles.

Marketers need to be crystal clear about why they measure the metrics they do, including knowing what happens to the business when they go up or down, and why they are moving in the direction they’re moving. In most cases, if someone can’t easily define a metric or explain why it matters, it’s likely a vanity metric. 

Vanity metrics are tempting because they seem important and are highly visible, but their inability to measure the right areas can ultimately spell failure or success for a business. So, how does one avoid the lure of vanity metrics?

Understand the Business Model

The first step to avoiding vanity metrics is to understand the company’s business model and how it takes its products to market — whether selling directly to buyers, alongside partners, through resellers or any other route. Once defined, marketers can identify metrics that impact the buyer’s decision-making process.

For example, if a brand does most of its business through affiliates or channel partners as a white-label service, then social media followers don’t matter much. The quality of a few relationships is far more important than the number of people who recognize the brand.

Focusing on outcomes (i.e., revenue or brand awareness) and working backwards to see what’s moving (or not moving) the needle is a good way to find the metrics that truly impact the business.

Related Article: What It Takes to Create an Authentic Brand Identity 

Optimize the Right Metrics

The right analytics portfolio can provide deeper insights into the business once the metrics are in place — such as allowing marketers to identify the viability of new customer or market segments.

To get those insights, marketers should analyze metrics frequently to understand how their data correlates to business outcomes. Gaining an understanding of the reasons behind sporadic ups or downs isn’t quite enough here. It’s also important to look for metrics where improving poor performance or fine-tuning high performance correlates positively with higher-level business goals.

In a way, some metrics are already vanity-proof thanks to legislation such as GDPR in Europe, the California Consumer Privacy Act (CCPA) and the CAN-SPAM Act in Canada. To be certain, these laws are designed for a larger scope than business metrics, but they also inadvertently have this vanity-proofing effect.

For instance, some of these regulations prevent companies from enrolling subscribers to newsletters without them opting in first. So instead of being able to buy a list of subscribers and use that as a metric, email marketers must look to more impactful metrics such as open rates or click-through rates.

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