Vanity vs. Actionable Metrics: Why Your Traffic Stats Are Worthless

Companies want more insights, more data, big data, and an information dump. The belief is that the more data we have the better off we are. More data means we have insight into ways we can build our business faster.

That’s the idea, and it’s not accurate.

The reality is there is a lot of junk data that’s not helpful. Some of that data is worse than worthless because it distracts us from data that matters.

In the sphere of everything we call data, I’m talking about vanity metrics.

Understanding How and When Data Matters

When you’re digging into your analytics there are a lot of numbers being pitched at you in various graphs. So how do you know when the data really matters?

It’s simple.

• Does the metric help you take action?
• Does it help you make decisions?

Does it give insight into what you need to do next?

If not, then the data you’re looking at is more than likely a vanity metric.

Vanity metrics are data points that exist to make you feel good if they go up or change, but they don’t really help us make decisions. Sometimes vanity metrics even lead to bad decisions.

If you look at the graph above it’s a nice overview of site traffic with some spikes in traffic toward the end.

Spikes are good, right?

But those traffic spikes don’t give us any information other than “traffic was up”. We have no idea what it means. It could be the result of a great guest post, social engagement, a paid promotional campaign, a video clip that went a little viral.

We’ve got no idea.

Not only do you need to understand why there were traffic spikes, you also want to know what kind of business you gained from that increase in traffic.

Now compare that to a more actionable metric, like the graph below.

This graph tracks the conversion rate of a preset membership goal. Over the course of a 30 day period we can see a few peaks but also a near complete drop off signaling a loss of conversions.

That’s an immediate indication that you need to take action.

With that established goal tracking we know at what point we’re losing those conversions so we can try to figure out where the funnel cracked and leads are slipping out instead of converting.

There’s little confusion in a situation like this – it’s an actionable metric that provides direction and tells you exactly where the issue is so you can fix the issue and ensure it doesn’t happen again.

Google Promotes Vanity Metrics

Google analytics isn’t necessarily trying to push vanity metrics or steer you wrong intentionally. They’re just trying to provide as much value as possible.

So they sling a pile of vanity metrics up on your overview dashboards.

That’s why you should ignore overviews like the Visitors Overview reporting and focus on clicking into deeper reports.

Ignore a majority of the data that your analytics is feeding you, especially the way it feeds it to you. You want to customize your analytics so it’s tracking information and providing data based on your business goals and outcomes.

Nothing else.

The businesses that are able to successfully grow from diving into their analytics are the ones who enable ecommerce tracking, clearly define goals, and calculate goal values.

Customizing your analytics gives you the most actionable metrics to work with.

Source: Google

Using default analytics only gives you vanity metrics.

It’s nice to feel good when you see followers, fans, visitors and pageviews on the rise, but focusing on those means you’re neglecting your responsibility of growing your business in favor of vanity metrics that don’t matter.

The Metrics That Matter

Anytime you’re looking at metrics, ask yourself “is this going to help me take action and make a decision”.  Actionable metrics should answer these questions for you:

• How am I gaining revenue (or losing it?)
• How am I gaining customers (or losing them?)
• What are people coming to me for?

Revenue - Revenue is the big metric to track and it can only be tracked if you customize your analytics with goals and the customer value. You need to track where your revenue comes from, each and every time someone pays you.

Revenue tracking typically includes:

• Lifetime customer value
• Total revenue for a given period
• Net profits
• Average order value
• Quantity of transactions
• Average subscription length

Leads and Customers - Just as important as revenue are the people who bring it to you. It’s vital to know where they’re coming from.

And there are plenty of sources: social, organic search, paid traffic, referrals, etc.

This is not the same as sourcing where your visitors come from. That’s just another vanity metric.

If you focus on visitor data your leads and customers will only get overlooked because they’re a small percentage of your total visitors.

Source: HubSpot

Keep in mind that while analytics platforms like Google Analytics can track assisted conversions, most providers attribute conversions to the most recent traffic source. That means a customer who finds you with an ad or via social, but decides to search around about your company before they convert, will have credit applied to their branded keyword search as opposed to your ad.

Conversion Rates - Tracking site-wide conversion rates (like a cart checkout) are a good starting point for tracking conversions but you can go a lot deeper with your metrics. There are also the conversion rates as they apply to traffic sources and specific marketing campaigns or referral sources.

And don’t get caught up in the vanity side of it by stacking your conversions against competitors or industry standards.

Actionable metrics are best monitored with your own benchmarks.

With your own internal benchmarks you know when your efforts are working.

Monitor the conversion at various stages of your funnel so you have the ability to take action where it matters most. From a prospect landing on your site and completing an optin, to more information absorbing down the chain when they return from an email responder, to the final conversion where they make a purchase.

Track conversion at every step.

Source: Search Engine Journal

Funnels - You can track each step when you break your website and content down into a funnel so that the process is completely defined.

Your audience has to follow specific steps before they convert and when you have a sales funnel that people follow you can track every step.

That’s the only way to know where breakdowns occur and where people abandon the process.

This is an actionable metric because knowing where people are bailing from your funnel tells you exactly what you need to work on.

Source: Kissmetrics

Cohorts - It would be nice if every business just had one audience that we could herd through a sales funnel and convert them easily.

Unfortunately, just like a herd, audiences behave differently.

Even with a herd of cattle you get groups that want to split off for some reason.

Different groups of customers behave differently so you want to understand what separates your most profitable repeat customers from the people who purchase once and never return.

The cohort report is another actionable metric that lets you understand how groups behave so you can find trends in the data and make decisions to adjust your approach.

Source: Kissmetrics

When you’re split testing the impact of minor changes remember not to get distracted by intermediate metrics like the click-through rate of a button. Button clicks can distract you just as much as a vanity metric.

Metrics are people, too, so you want to measure the macro and focus on customer behaviors that lead to something useful.

Marketing Campaign Performances - This is a big one for a lot of businesses. Marketers and business owners of various size organizations frequently struggle with knowing whether or not they’re profiting from marketing campaigns and what kind of return they’re seeing.

Focusing only on the revenue as a means to decide whether or not to shut off a campaign isn’t always the best decision. The same goes for focusing only on vanity metrics for how much traffic a campaign brings.

That’s why it’s important to have actionable metrics as your focus that align with your campaign goals.

Whatever the goal (video views, opt-ins, downloads, or social likes) don’t try to base success or failure on vanity metrics.

Picking The Right Metrics

When you’re faced with a leadership team who wants results, or when you need to lift your own spirits, it can be tempting to focus on vanity metrics.

It always feels good when site traffic is on the rise.

But don’t get caught up in trying to use things like pages per visit, total visits and time on site as key performance indicators of success.

Something as broken as poor site navigation could drive up pages per visit and time on site and it’s certainly not an indicator of success!

You need to do the opposite and stay out of the analytics.

Start by focusing on the business and your goals.

Identify the best conversion metrics that you know will help you evaluate the health of your business. These are your metrics like revenue, leads, opt-ins and customer lifetime value.

Once you’ve got your core metrics singled out, then get into your analytics and figure out how to customize the data so you’re seeing exactly what you need to see.

Conclusion

You can waste a lot of time in analytics and get nothing done. Staring at site traffic and time on site is like admiring yourself in the mirror. Instead, focus on what has the greatest impact on your business and rely on actionable metrics that can help you improve your business where change is needed most.

What are the actionable metrics that are most essential to your business?