Start Tracking These Factors Instead of Vanity Metrics
Everywhere you go, people are talking about numbers. One million downloads. Ten thousand page visits a day. All these numbers sound impressive, especially when you’re launching a new business. Seeing these numbers tick up is exciting, we won’t lie. But numbers like page visits and signups are also fake.
What do we mean by fake? Metrics like signups and downloads can be easily faked, hence why these metrics are often referred to as vanity metrics. Think of how many people buy Twitter followers just to make their followed-by metric look better.
This isn’t to say vanity metrics are useless. Quite the opposite–metrics like page views and visitors can tell you a lot, especially when you’re just starting out. Numbers like these can show whether your idea is gaining traction, or whether you’re getting any attention at all. But as your business grows, different metrics begin to matter more.
What kind of vanity metrics are we talking about, anyway?
- Page views and visits. This one may be the hardest one to work your way away from. But the truth is that page views and visits alone mean little without context. Did your site get featured on TechCrunch or Lifehacker, creating a spike in traffic that never was sustained? How did those visits translate into revenue?
- Growth numbers with no context. You know the ones. A business may say their revenue is up 300% or downloads have increased by 20%. Saying your revenue is up 300% from the same time last year is great and exactly why this metric exists. Saying your downloads are up 500% is meaningless. 500% up from what? Twelve hours ago? Last week? Last year? Growth percentages like these aren’t inherently bad, but these numbers must come with context.
- Registered users. While registered users is a good metric to measure when you’re starting out, it’s not the best metric to base your business success on, especially as you grow. Think of your own experiences: how often have you signed up for an account somewhere only to abandon it after a few days or weeks? Us too. Free trial users fall under the same umbrella. Measure active users instead.
- Downloads. It’s easy to get excited when you reach a download milestone, whether that’s a thousand, a million, or more. But overusing this metric runs into the same problems as using registered users as a metric. The numbers don’t capture what’s really happening, what’s really growing your business.
While all of these metrics have their uses, these vanity metrics aren’t the best ones to use if you’re concentrating on growing your business’s revenue and sales. So what should you report instead?
- Revenue per customer. How much revenue is each customer bringing in? Are customers paying for your service or products?
- Conversion rate. How many of your visitors entering your site from a campaign are signing up and continuing to use your site?
- Number of paying customers. How many of your customers are paying for your service? What percentage of overall customers or visitors do your paying customers make up?
- Churn rate. What percentage of your visitors are leaving? A high churn rate means there’s a problem somewhere, but even lower churn rates can show a lot about your business.
What do all these metrics have in common? These metrics show how your business is performing in terms of revenue, sales, and active users. In other words, these are the numbers that matter. And FoxMetrics is here to help you track the numbers that matter every step of the way.
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