Vanity Metrics: Meaning, How To Identify Them And Examples
By Indeed Editorial Team
Published 29 September 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
A vanity metric is a statistic that often seems good and shows growth but may not always reflect actual results. As a product manager or a marketing professional, it is essential to know about this metric because of its extensive use in various sectors. Understanding more about these metrics can help you identify the key and relevant statistics that can help you strategise. In this article, we define vanity metrics, share ways to identify them, explore their disadvantages, compare them to an actionable metric and provide some examples for your reference.
What Are Vanity Metrics?
Vanity metrics are measurable statistics that imply significant growth but may not always qualify as meaningful business results. These statistics may not indicate the product's actual performance to inform actionable insights. For instance, they may show growth or consistency in analytics software, but they are also non-operational and rarely signify real return on investment. An example of a popular vanity metric influencing the current market is the number of likes and followers on social media. Though these statistics are measurable, they may not always contribute to the direct growth and profit of a product or a company.
Questions To Ask To Identify Vanity Metrics
Focusing on surface metrics may cause a company to lose valuable opportunities and interactions with its customers. Here are some questions that can help determine if the metric you are monitoring is a vanity metric:
Can you use the metric to make business decisions?
You can ask yourself this question to verify if the metric is a vanity metric. If you are unsure of the answer, it is likely a vanity metric. Standard metrics may include monthly active users (MAU), daily active users (DAU), customer conversion rate, churn and customer retention rate, revenue churn, revenue growth rate and customer acquisition costs. These are often actionable and can aid directly in making business decisions. They may also provide feedback on whether a business is progressing per expectations or plans.
For example, if you are measuring page views for a product landing page on your website, it may not help you make a business decision. This makes page views a vanity metric. Alternatively, an actionable metric, like product sales, can help you measure the effectiveness of the landing page, identify your problem areas and take the necessary steps to resolve issues if required.
Is it reflecting the truth?
Business managers expect every metric to provide a realistic insight into business performance. Ideally, any external factors, such as paid audiences, cannot influence this metric. That is usually why followers, likes and comments are relatively unreliable metrics, as they may be susceptible to tampering. You can assess if the metric you are measuring offers accurate insights that correspond with real-world results of your product or company. If the data is inconsistent or unreliable, then the metric is most likely a vanity metric.
For example, the posts you see on social media are often because of a complex feed algorithm. This may create false assumptions about the popularity or mass appeal of a particular product or service. Users may perceive a product to be good because of its following on social media, but that does not consider the possibility of paid followers or bots that augment the results. Here, the social following metric does not represent the truth about the public perception about the company and is a vanity metric that cannot help you make a business decision.
Can you replicate its results?
A vanity metric may often result from circumstantial luck. If out of a variety of strategies you implement online, only a random one performs significantly better than the others, it can be a vanity metric. If your strategy yields consistent results, the numbers you see may not be a vanity metric. For instance, if a particular page, post or piece of content has gone viral, then the social following of its content producer can be a vanity metric.
Consider a product's sudden rise to fame because a celebrity mentioned it as a personal recommendation. The product may experience increased popularity, but it is due to an external factor. Product marketers may find it nearly impossible to replicate or reproduce the effect organically without an external influence.
Disadvantages Of A Vanity Metric
Product managers and marketers in popular consumer-focused industries like technology, automobile, software, pharmaceuticals and consumer goods can benefit from knowing these metrics. It can help these professionals make informed decisions to continue the development of the organisations they work for and their products. These can guide professionals to build a better business model for their organisation with the accumulated data.
There are some limitations to consider before implementing this metric, which are:
A vanity metric can mislead a company if it is the only factor on which they base business and product decisions.
Focusing on a vanity metric may distract the manager from measuring essential statistics like engagement and actionable metrics and neglecting the critical factors that matter to the company's growth.
As a product manager, it may be more advisable to have specific data for metrics like revenue growth rates, average revenue per customer segment and revenue churn.
Vanity Metric Vs Actionable Metric
A vanity metric is relatively superficial and can be inconsistent. It may not provide concrete guidance on improving a product. Its superfluous data can be misleading, misleading the company's efforts for growth. Actionable metrics clearly define parameters that align with business goals. They deliver valuable insights to the team to make informed decisions about a product or the company.
Before monitoring any metrics, it is essential to have a clear idea of the company's business goals and objectives. Focusing on smart, actionable metrics rather than surface metrics can enable you to achieve excellence in the organisation and also help you pursue your career as a product manager or a marketing professional.
Examples Of These Metrics
Here are a few examples you can use to understand better these metrics:
You may monitor the company's website traffic to analyse how many visitors come to the website. It is essential to consider that online traffic may not be the only contributor to the company's success. Your website may see a substantial increase in online traffic but converting visitors into paying customers is more important to company success. After they become active customers, they can transact with the company and contribute to its growth and development.
If your product is an application, measuring the product's success based on the number of user downloads can be a vanity metric. Applications may go viral as there is often a fluctuation in their popularity. This makes user retention a more insightful metric than the frequency of downloads. New product download statistics may also be a vanity metric.
Page views can be a useful metric when there is a parallel influx of relevant visitors to your website. Monitoring this metric can be helpful if the intent aligns with your business goal but may be of no consequence if used as a tool to measure website popularity. As page views are a vanity metric, it is essential that you focus on measuring bounce rate, session time on page and the unique number of visitors to get an accurate idea of your target audience.
Social media likes and followers
Using social media to promote the company's new products can be a good strategy, but it may not be ideal to base the goal of this strategy only on the number of likes and followers. This is because these may not indicate the success of a business effectively. Social media users may like a post about your product, but this may not guarantee they immediately purchase that product.
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