Stop Tracking Vanity Metrics

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What is a vanity metric?

We define vanity metrics as any metric that is either fun or easy to track and on the surface appears an appropriate one for the business, but upon inspection does not directly relate to company performance.

Here’s an example of what I mean:

I was working with a clothing brand who had recently launched a new ecommerce storefront. They were rightfully obsessed with tracking activity on the website. On a marketing report that was widely circulated, one of their top level metrics was a user’s time on site.

Time on site is an incredibly easy metric to track, which is why people like it. And at first blush, those in charge of marketing thought that the more time someone spent on the site, the more likely they would be to purchase.

We might all make that assumption, right? So they worked hard to make the site work better for this metric, eventually increasing the avg. time on site by 40% in just 90 days.

The problem? This did not move the needle in terms of the number of checkouts or the dollars earned from website visitors. People were spending more time on the site, but leaving empty-handed just as often.

Time on site was a vanity metric – easy to track and improve, but with little to no impact on results.

Marketers, the message is clear:

Stop tracking vanity metrics. Find the metrics that matter and track those obsessively.

Most Underrated Web Metrics

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The problem with data used to be that we didn’t have enough of it. The problem with data today is that there is just way too much of it.

Of course if you know what you’re looking for, you can get it. And everything else will fall aside.

But if you don’t know what you’re looking for, you will likely fall into the familiar trap of spending too much time on things that don’t matter. Last week, we looked at the most overrated web metrics.

Today I’d like to reverse that. Let’s have a look at those metrics that are underappreciated and underused, but very useful for many businesses to measure and improve:

  1. Page Value – Google Analytics allows you to set up your ecommerce metrics, so that when someone checks out on your website, you know how much they spent. Even if they aren’t checking out, you can assign a value to any action they might take, like submitting a lead form, etc. Then you can measure how each page on your site impacts those actions and sales. Pages with the highest value contribute the most to results and pages at the lower end might not be helping you as much as you hope.
     
  2. Conversion Rate by Device – while you should be measuring everything by device, conversion rate gets right to the important stuff. Assuming you are tracking sales and other actions, you should always pay attention to the relative likelihood of conversion on different devices. As more of your traffic comes from mobile, are you putting your design and development resources in the right place?
     
  3. Attribution – I’ll grant you that this is not a metric but a category of metrics, but since Google Analytics gives you the tools you need to figure this out, I feel okay including it on this list. For marketers, this is perhaps one of the most important things to know. What traffic sources and activities add value and which do not? A full attribution analysis will tell you the path that most often leads to a successful conversion. It will rank the things you do by their relative impact on results.

Remember, now that we have access to boat loads of data doesn’t mean we’re any better off than we were before. Only those marketers or companies that pay attention to the right metrics will come out ahead.

How to Analyze Your Sales Funnel

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Last week we took our first look at your sales funnel. Here are the different levels we used, from top down:

  • Unqualified Prospects
  • Awareness
  • Interest
  • Consideration
  • Intent
  • Purchase
  • Loyalty

Your company or industry might use variations on those terms, but for the most part the meanings and buckets will be the same.

So once you have a clear picture of your funnel, the next thing you need to do is begin to analyze it. How do you do that?

You start by assigning numbers to each level. How many people are in the pool of unqualified prospects? How many are in the awareness stage? And so on.

It might be difficult to get to exact numbers for each one, but you should have a sense, based on your own internal metrics and tracking.

You should know how big your target market is. If you got every single person in the market to purchase from you, how many people would that be?

You should know how many people came to your website, filled out your forms, became a sales lead, and purchased. And you should also know how many customers came back and made a repeat purchase. Adding a little bit of art to this science, you will end up with good estimates for each level on the funnel.

When you write those numbers down, you can do some quick math to see what percentage of people from each level make it down to the next level. This is your conversion rate at each stage.

For example, let’s say you have a total market size of 1000 people. That’s what you write down next to Unqualified Prospects. And you’ve judged 500 people to be in the awareness stage or beyond, meaning they have had some exposure to your brand. So you have an awareness rate of 50%.

Calculate that percentage throughout the funnel and you will have a complete look at the effectiveness of each stage of the sales process.

Tomorrow, we’ll take that analysis one step further and talk about how to use those numbers to improve your sales funnel.

What to Measure

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Last week we posted a piece titled, What You Measure Matters. The primary message was just that, there are a lot of different metrics that marketers have the ability to measure with today’s technology, but not all of them are equally important. There is not one magic number that will inform your decision making, just like there is not one set of metrics that applies equally to every company or industry.

So now that you know that, you may still be asking yourself, “What should I measure?”

So here are some big metrics, or KPIs, that marketers should be aware of (take the ones that apply to your business and leave the rest):

  • Conversion Rate (lead to sale)
  • Conversion Rate (web forms)
  • Click-thru Rate (on an ad)
  • Cost per Conversion (online ads)
  • Advertising Cost per Sale (what does it cost you to get a new customer)
  • Average Revenue per Sale
  • Average Revenue per Customer (lifetime value)
  • Website Traffic – bounce rate, time on site
  • Net Promoter Score
  • Satisfaction Ratings (from customer surveys)
  • Total Sales
  • Customer Growth
  • Number of Purchases per Customer
  • Customer Turnover or Churn

This is a high level list that leaves a lot of key metrics out. Your business might rely on subscription revenue or in-store traffic, and so it may need a different set of metrics altogether. But this should get you thinking about what to measure and steer you in the right direction.

Cheers!

5 Most Important Analytics Metrics Explained

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For those of you not using Google Analytics to track your website activity, I suggest you start. Whether you’re already using it, or you’re about to get started now that I told you to, it’s important to know how to use the information Google Analytics provides.

When you’re first getting started, it can seem somewhat overwhelming. So I boiled down 5 of the most important things you should become familiar with. Here they are:

Unique Visitors

This is an easy one. Found under Audience > Overview, you will see two metrics called Sessions and Users. Sessions are the total number of visits to your site. Users are the unique visitors to your site. So the difference between the two is if someone visits your site twice in one time period, that second visit would be counted is Sessions but not Users.

When you know your unique visitors, you know your site’s traffic. You can begin to track whether that number goes up or down. For most companies, growing traffic is a high level goal. Now that you know what your traffic is, you can measure the impact your growth strategy is having.

Traffic Sources

Under Acquisition, the top three pages allow you to dig into where your traffic is coming from. The Overview page shows you at a high level where your visitors are coming from and what their behavior is once they get to your site. Here you can see the relative performance of Organic Search, Direct Traffic, and traffic from any ads you’re running.

The Channels page and the All Traffic page then provide a little more detail on that same information, breaking it into more specific categories. The key to these reports is how you use them. Not all traffic is created equal, and the information gleaned from these pages should tell you where you are getting the most valuable visitors. Focus on where you’re getting conversions and try to increase your traffic from those channels.

Bounce Rate

Bounce Rate is a metric that shows up throughout many different screens in Google Analytics. Bounce rate is the percentage of visitors who leave your site after viewing one page, whatever page it is that they land on. A bounce is a negative thing, as it means the person did not find what they were looking for and left without taking any action on your site.

You can find overall bounce rate under Audience > Overview. But the more valuable bounce rate metrics are under Behavior > Site Content. That will show you the individual bounce rates for each page on your site. I recommend using that to identify “problem” pages and seeing what actions you can take to improve the quality of those pages and get more people to stick around.

Time on Site

Time on Site is an important metric for sites that make money by selling advertising. The longer you can keep people on the site, the more ads you can sell, and the more you can charge for those ads, because you have a captivated audience. When people talk about sites as “sticky”, they’re talking about time on site.

Time on site measures the average time a visitor spends on your site. You can find it under Audience > Overview for the site overall, under Acquisition > Overview by traffic source, and under Behavior > Site Content by page. Your goal should be to grow the average time on site for every visitor by improving the quality of content on your website and making it easier for people to navigate and find what they want.

Conversion Rate

The ultimate metric is conversion rate. To measure it effectively you need to set up Goals. Goals in Google Analytics are actions that a user can take on your site that you want to measure. For example, an ecommerce site should measure sales. A blog should measure subscriptions.

Whatever your goals, you can use the conversion rate metric provided on almost all screens to track the relative success of each page on your site or each traffic source. The conversion rate will tell you of all the visitors to your site, an individual page, or from each channel, what percentage of them completed the goals you have set up.