Actionable Metrics vs. Vanity Metrics: Which Wins?
To focus on actionable metrics is to focus on the things that really matter. You get the data you need to make your decisions, but you don’t get distracted by all the other stuff.
Vanity metrics are just numbers that make you feel good but don’t help you make decisions. For example, if your goal were to increase revenue and you looked at total number of website visitors (a vanity metric), it wouldn’t tell you anything useful about how to improve revenue. Sometimes these kinds of numbers can be motivating for a team, but there are better ways to motivate than measuring the wrong thing.
Actionable vs Vanity Metrics: The Difference
Actionable metrics are specific, measurable values used to track progress toward business goals. Because actionable metrics focus on progress toward actual results, they can be used to determine which strategies you need to change and improve. They also let you know if your business is moving in the right direction, or if you need to adjust your course.
Vanity metrics are indicators of activity rather than actual performance. In other words, they might make you feel good about how much your business has grown or improved over a period of time, but they don't tell you what's actually working for your business—they just let you know that something happened during a certain time frame (or didn't happen).
Questions to Consider when Setting Actionable Metrics for Your Business
Set your goal: What is your desired outcome or objective?
Why does this outcome matter?
How are you going to measure progress? Which KPIs are most important to you?
How can you influence the outcome?
Who is responsible for the business outcome?
How will you know you’ve achieved your outcome?
How often will you review progress towards the outcome?
How to Determine and Measure Your Actionable Metrics and KPIs
Examine the following business objectives: Remember, KPIs aren't fixed! Your KPIs should evolve in tandem with your business objectives.
Examine your present performance: Are you setting goals that are attainable? Analyzing your performance is critical for understanding your strengths and weaknesses. Examine your previous performance data as well to establish a baseline for what you've accomplished in the past using a platform like PowerMetrics.
Set short-term and long-term KPI goals: Set your long-term goals (quarterly or yearly) and then work backwards to identify the milestones (or short-term targets) that must be met along the way. As you work toward your larger goals, you can constantly reassess and change course.
Review your team's goals: Teamwork is what makes the dream come true! It's an old adage, but it's still true. It's critical that everyone is aware of what's going on so that you can all work toward the same end goal.
Examine and revise progress: Make it a point to check in on your progress on a regular basis. KPIs aren't something you set and forget. Check in on your performance and the relevance of your KPIs on a regular basis. And once you've made it a habit, it will become easier with each repetition.
What Are the Top 6 Actionable Metrics to Track in Digital Marketing?
Understanding how these metrics fit into your marketing strategy and which ones to focus on can help you make better decisions for your business.
Okay, so what are the metrics that you want to pay attention to? You can get a lot of great insights from many different platforms, but we'll give you a rundown of what we think are some of the most important actionable metrics.
ROI. Return on investment (ROI) is one of the most important metrics in marketing. ROI is essentially a campaign's profit and revenue growth across all marketing channels. A positive ROI lets you know your campaign is converting and adding to your bottom line. Negative ROI means you have to make some adjustments to your offer or funnel.
Website bounce rate. Bounce rate is the percentage of people who visit your website and then leave without visiting a second page. If you have a high bounce rate (more than 50 percent), that suggests many people aren't finding what they want on your site, which can reflect poorly on your brand and also hurt your search engine rankings.
Email subscriber list size. Your email subscriber list is one of the best assets in your digital marketing toolbox, because it represents a group of people who have chosen to hear from you on a regular basis. You want this number to be as large as possible, so you should be constantly working to grow your list: offer new subscribers an incentive to join, make it easy for them to sign up and get into the habit of regularly sharing your email newsletter with existing subscribers on social media.
Conversion rate. The conversion rate is one metric you really want to keep an eye on. This will show you how often visitors who come onto your site actually buy something. If this number is low, it's time to rethink your marketing strategy and website design because something isn't working right!
Click Through Rate. This is the ratio of users who click on a specific link that you have posted to the number of users who viewed that particular page. CTR is used to measure the success of a marketing campaign.
CTR= Clicks/Impressions.
Let’s say you have 100 impressions for an ad and 7 people click on it, it means that your CTR is 7%. The higher the CTR, the better it is for your campaigns. If you keep noticing an uptick on your CTR, then your campaigns are getting optimized and it will soon translate into revenues. CTR is pivotal to your digital marketing campaigns because it tells you what works when you are trying to reach your correct audience. If you have a high CTR rate, then it means that your targeting is perfect while a low CTR rate will mean that either your copy is bad and not persuasive or you are knocking on the wrong doors.
Average order value. This metric tells you how much money people spend during their visit with you. If they're buying more than they usually do then things are going well - if not, there might be a problem somewhere in their experience with either shipping costs or other issues that could lead them away from spending as much as possible when visiting your site/store.
Customer Lifetime Value. It is the amount of money that a customer is expected to spend on your business over his/her lifetime. Based on the CLV, you can make a lot of critical decisions on how much to invest in your campaign and your retention strategies.
CLV= Average value of a purchase*Number of times the customer will purchase in a year* Average length of customer relationship.
Your CLV will also tell you who are your most profitable customers, the kind of products that your customers with the highest CLV want, and the products that are most wanted.
How to Use Your Actionable Metrics to Improve Your Digital Marketing Campaigns
So you've read this article and you know what actionable metrics are. Great work! Now let's talk about how to incorporate them into your digital marketing strategy.
Step 1: Define Your Actionable Metrics
Actionable metrics can be determined by asking yourself key questions, such as "What is my business' main goal?" and "How do I define success?" For example, if your goal is to improve brand awareness, then a metric like impressions or click-through rate might be important to you. But if your goal is revenue growth, then a metric like cost per lead or revenue per lead might be more beneficial. In order to accurately define what is actionable, you'll need to know the answers to these questions.
Step 2: Determine How Your Actionable Metrics Will Be Used
The second step in incorporating actionable metrics into your digital marketing strategy is determining how they will be used in the future. This includes both short-term and long-term usage. In terms of short-term usage, some companies set up weekly meetings so that current metrics can be discussed and any necessary adjustments made based off of their findings from these discussions. As for long-term usage, it is common for companies to find trends within their data over time in order to make larger changes that will have a more lasting impact on the goals of their organization as opposed to just short-term gains from week-to-week adjustments after looking at current statistics
There are many tools and ways your organization can use actionable metrics to improve the ROI of your digital marketing campaigns.
Actionable metrics tell you how you can improve your user experience to drive more business results.
Vanity metrics are the "big numbers" that often lead to big misunderstandings of how well a company is performing.
Vanity metrics are the "big numbers" that often lead to big misunderstandings of how well a company is performing. It's hard for executives and managers not to get excited about hitting new records, but if those records don't directly translate into increased revenue or stronger relationships with customers, they shouldn't be at the top of your list.
Naturally, measuring actionable metrics requires some extra effort up front. But once you have them set up and in place, it's an ongoing process that enables you to evaluate your digital marketing efforts by focusing on outcomes and actions; not just clicks and page views.