Author: Jesse Walker
Stop me if you’ve heard this before, “Data-driven decision making”. Or how about this one? “Insights-focused”. Ooooh, buzzwords!
Don’t get me wrong, I love data and it’s definitely a best practice to make decisions based on data and insight. However, I believe there is a fine line between the right data and data that is just noise.
So, the question becomes what is the right data? There are two high-level types of data: vanity metrics and actionable metrics and I’ll explore both below.
Before we dive into vanity metrics, can we take a minute to remember my one of my favorite rom-com moments of Matthew McConaughey and Kate Hudson belting out Carly Simon’s “You’re so vain”? Love that movie.
Vanity metrics are metrics that make you feel good but don’t tell you anything about your business1. Examples of vanity metrics are impressions, “likes,” shares, comments, followers, open rates, views, traffic, etc.2
These metrics look great at first, but they don’t tell the full story. Let’s look at this Nike Facebook post for an example.
Let’s be clear, vanity metrics are not all bad! They can be good indicators that something is working but we need to take it one step further and tie these vanity metrics to something more tangible – aka actionable metrics.
Which of these is better?
- Our Facebook post got 1.4 million views!
- Our Facebook post got 1.4 million views which drove a 20% increase in traffic to our website and $100K in online sales!
If you didn’t pick answer B we may need to talk…
Actionable metrics help us answer business related questions like “Did we gain/lose revenue?” or “Did we gain/lose customers?” A few examples include conversion rates, customer acquisition costs, ROI, engagement rates, etc.1
Connecting the vanity metrics to actionable metrics helps us tell a better story about what action we took and what the impact was of that action. You can start a story with big shiny moment, but then you need to follow it up with substance.
The Happy Medium
Overall, vanity metrics tell us a lot, but they don’t paint the full picture. We need the actionable metrics to fill in the gaps and complete the picture.
If you know what you are trying to accomplish, then you can tell the right story leveraging both vanity metrics and actionable metrics. And if you are telling the right story with the right metrics then you can feel confident telling people you are a “data-driven decision making” pro!
Want to learn more? Here are few additional resources: