Vanity vs. Action Metrics

Are you drowning in data?

If so, you’re not alone. 67% of CMOs say they’re overwhelmed with data with 33% citing “the increasing number of platforms/channels” as the biggest external factor impacting marketing today (easily the most commonly-cited factor).

Every day, it seems like we’re learning about a new social media platform or a new marketing tool with a snazzy-sounding proprietary metric that promises to solve all of our marketing woes. The result is total data overload!

Over just a two-year period from 2021-2023, the average number of data sources marketers used jumped 80%!

Integrating all of those data sources makes for some really complicated fun spreadsheets.

While a lot of the metrics marketers use are standardized across platforms and industries, it’s still challenging to aggregate and compare data coming from disparate sources. How Facebook calculates engagement rate is different from how Twitter calculates engagement rate, which makes sense because each platform offers its own ways of engaging with content.

We can compare engagement rates on each platform to platform-specific averages, but those averages vary from industry to industry.

Which brings me to the topic of today’s edition of Data-Driven Marketing…

Vanity Metrics vs. Actionable Metrics

There’s a lot of stuff out there to measure—too much stuff—which means it’s more important than ever to ensure you’re measuring the right stuff.

What makes stuff the right stuff?

Whether it has a tangible impact on your business.

Usually, “tangible impact” means revenue, but maximizing revenue isn’t always a company’s primary objective. Growing companies might care most about building their email list or increasing their monthly active users or volume of 5-star Yelp! reviews. Each business objective has associated metrics that indicate whether your marketing efforts are helping you achieve that objective.

Imagine you’re in a meeting with your boss’s boss—for me as a solopreneur, that means my wife—and they say, “Our goal this year is to grow Product A sales by 25%. How’s that going?” Which of these is a better response:

• Response A: “We’ve increased our Facebook page’s likes by 30%.“

• Response B: “We’ve increased traffic to Product A’s sales page by 30%.“

Clearly, Response B is the better answer (but you probably knew that already, because anytime someone does these A vs B things, the right answer almost always is B.)

Even if your company’s Facebook page is the largest driver of sales for Product A, the number of likes that page has is too far removed from the actual sale to be considered a key metric. Traffic to Product A’s landing page is a much better indicator metric, because at that point there are just two metrics that affect sales volume: traffic and conversion rate.

(By the way, conversion rates often are great, actionable metrics, too.)

One of the simplest ways to pinpoint actionable metrics from the sea of vanity metrics is to use your marketing funnel.

The image above shows a simplified funnel for “Product A” with 5 funnel steps. Between each of those steps is an action your buyer needs to take.

That simple funnel has a lot of associated metrics. Each of the blue bars representing one of the funnel stages is its own volume metric, and each of the yellow arrows is its own conversion metric. That’s 9 separate metrics for one Facebook content campaign. While it’s important to measure all of them, because they’re all related, the metrics lower in the funnel are more directly tied to your company’s stated target of “increasing Product A sales by 30%.”

Importance of Scope

Just because you’re trying to increase product sales doesn’t mean Sales Page Traffic is the best key performance indicator (KPI) every time. For social media content or ad campaigns, yes, clickthroughs and sales page volume probably are going to be paramount more often than not.

• But what if you’re a copywriter and your job is to convert that sales page traffic into new shopping carts created?

• Or what if you’re a developer and your job is to simplify the checkout process to improve your shopping cart abandonment rate?

Scope is critical when choosing the best metrics to report, because they should be metrics within your control.

Importance of Benchmarking

Unless you have limited resources (you probably don’t), then you’ll need to decide where to allocate your time and money in order to get the greatest benefit. That’s where benchmarking comes into play.

By measuring and analyzing each of those 9 metrics in our Facebook example above, you can see where your performance leads and lags compared to your industry or competitors.

• If your social media clickthrough rate is lower than your industry average, how much benefit will you observe from addressing that and how much will it cost?

• If your sales page conversion rate is lower than your industry average, how much benefit will you observe from addressing that and how much will it cost?

• If all of your conversion metrics (the yellow arrows) are outperforming industry averages, are your resources are better used trying to make those rates even better or should you invest in content, ads, or other means of increasing visibility to get more traffic into your funnel?

The best metrics to use as your KPI or indicator metrics will vary depending on your specific situation.

Everyone say, “Hi!” to Dan P 👋

Question: If you could have any superpower, but it had to be completely useless, what would it be?

Dan P’s Answer: “The ability to heat up coffee by touching it, except you need to actually put your finger in the liquid, meaning you can't get it hot enough without burning yourself.”

ChatGPT-Generated Joke of the Day 🤣

How does a penguin build its house?

Igloos it together.

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