Vanity Metrics are out to get you

As a CEO, do you receive vanity metrics from your agency or marketing team?

It's easy to get caught up in numbers that make you look good but don't actually inform your business decisions. Let me share a story. It could be, that you are also a victim of "vanity metrics".

I once spoke with the CEO of a real estate company who had invested $30 million in an apartment complex. The project seemed to be going well: the office was in a strategic location, the construction work was in progress, and the marketing collateral was done by a leading advertising agency. However, the sales were not matching the hype.

The company had a Facebook page with 130,000 likes, which seemed impressive for a new venture. They also had a database of attendees from big events organized by banks, which they could use for email campaigns. But upon closer examination, it became obvious that these metrics were vanity metrics - they didn't actually contribute to the company's bottom line.

The 130,000 likes on the Facebook page were gained by hiring an ad agency that promoted the page purely for likes, not to reach the target market of the apartment complex. The marketing team was proud of their job, but the likes were useless for the company's goals. Vanity metrics like this can make you look good to others, but they don't help you understand your performance or inform future strategies.

What Are Vanity Metrics?

Vanity metrics are metrics that make you look good to others but do not help you understand your own performance in a way that informs future strategies.

Vanity Metrics

One company's Vanity Metrics could be another company's Actionable Metrics.

• E.g. Likes on a facebook page where your target customer should be 35+ with high income or cash in the bank, but the audience is 18-25 aged youngsters which is irrelevant to you, maybe relevant to someone else who is selling some fancy sports shoes.
• An Email database of high net-worth families living and working in one city while the apartment complex you are selling is in the middle of the country far far away. You get the gist.

Why are they called "Vanity Metrics"?

Vanity metrics can vary from company to company. For example, having a lot of likes on a Facebook page might be a good metric for a shoe company targeting young people, but it's irrelevant for an apartment complex targeting high-income families. An email database of high net-worth families living and working in one city might be impressive, but it's useless if the apartment complex is located in a different area.

If you are assigning an ad agency to market your Facebook page (as an example), be clear that your expectation is to get a specific target market in the community. And remember, having 100 customers or a 1,000 potential customers is better than 100,000 followers of no value.

e.g. Above 30, rich, lives in city A geographically.

In traditional marketing, the next step after the investigative stage is to Segment, Target, and Position. Digital marketing is not much different. But too often, vanity metrics are used instead of actionable metrics. Don't take this lightly - make sure you're measuring metrics that actually contribute to your business goals. Remember, having a small number of engaged customers is better than a large number of followers with no value.

Don't fall into the trap of vanity metrics. Make sure you're measuring metrics that actually inform your business decisions and contribute to your goals.

Conclusion:

In conclusion, vanity metrics may make you look good on paper, but they are ultimately useless in informing future strategies and improving performance. Companies must be careful not to fall into the trap of measuring meaningless metrics that do not align with their business goals. Instead, they should set SMART goals and clearly communicate their expectations to their marketing agencies. Remember, quality always trumps quantity, and having a smaller number of potential customers who are truly interested in your product or service is far more valuable than having a large number of followers who add no value to your business. So, stay focused on your target market and ensure that your metrics align with your business objectives.