When and Why to Use Vanity Metrics

Vanity metrics are numbers that aren’t tied to business outcomes (closed deals, retained clients). They come in the form of likes, shares, followers, page views, and registered users. They're easy to track, easy to share, and easy to spin into a positive narrative. They make us feel like we're making progress, when the real metrics are slower, cumbersome, and less clear.

Worse, those clever with data analysis (data scientists, business analysts, management consultants, and desperate CEOs) will attempt to correlate these numbers to your real business outcomes, thus creating an exciting, though improbable narrative traffic equates to revenue. (If we had a dollar for everytime we improved page visits to the “money page,” we’d be billionaires). The only time to do this is when your buyer and user are the same. (There are some places for this, that's another post).

Vanity metrics do have a place in the digital product management landscape. The key is understanding when and how to use them effectively.

When to Use Vanity Metrics:

• Marketing Campaigns: Assess the reach and engagement of your marketing campaigns. Tracking likes, shares, and website visits can give you a sense of how your campaigns are performing. However, don't confuse engagement with conversion. Ultimately, the success of your marketing campaigns should be measured by their impact on sales and customer acquisition.

• Awareness: Awareness: Vanity metrics offer a limited view of brand awareness, not the stickiness of brand loyalty. While a large following might suggest growing visibility, it's crucial to look beyond the numbers. Focus on engagement metrics (comments, likes, clicks) and, more importantly, how brand awareness translates into tangible business results (leads, sales, revenue).

• Early Validation: In the very early stages of a product's life, when you're still testing core assumptions, vanity metrics can provide a preliminary signal of interest. A spike in sign-ups or social media mentions might suggest that your product concept is resonating with your target audience.

When Not to Use Vanity Metrics:

• Product Performance: Focus on the metrics that truly reflect user engagement, retention, and satisfaction. These might include daily/monthly active users, churn rate, customer lifetime value, and Net Promoter Score (NPS).

• Business Decisions: Use metrics that are directly tied to revenue, profitability, and growth. These might include customer acquisition cost (CAC), average revenue per user (ARPU), and return on investment (ROI).

• Communicating with Stakeholders: Don't let impressive-looking numbers distract from the real story. Your stakeholders care about business outcomes, not just superficial engagement.

Don't get caught up in the vanity game. Focus on the metrics that truly matter – the ones that drive real business value and reflect genuine product success.