Eric Ries is famous for coining the phrase “vanity metrics”. You know the ones. Those oh-so-tempting metrics that don’t show real value or progress. Whether you realize it or not, you’re likely monitoring vanity metrics yourself. They might be easier to track and more appealing to your ego, but they’re silently ruining your business.
Ries calls vanity metrics “success theatre, making people think that you are being successful rather than energy you could put into serving customers. The current metrics paradigm literally can’t tell the difference between absolute success and total disaster.”
Vanity metrics are everywhere – follower count, fan count, average daily traffic, etc. Those tempting, seductive numbers that scream, “Hey look at me! Look at how wonderful your business is and how much progress you’ve made.” However hard it may be to admit, those numbers are not tied to real objectives or value. You’re stuck acting in success theatre (which isn’t good for you or your clients).
As useless as they might be, vanity metrics are addictive. You’re definitely not alone in your obsessive monitoring. But it’s time for a vanity metrics intervention and a seven-step recovery. First, admit that you have a problem. Just think about the disturbing parallels:
- They’re addictive. They’re simple, fast and give you a boost. But like any addictive substance, they’re relied upon in the absence of something more significant.
- They’re false achievement. Vanity metrics feel good, but that sense of achievement is false. They don’t tell you anything meaningful.
- They’re distracting. Every moment spent worrying about vanity metrics is a moment wasted. You’re not focusing on what’s really important to your business and your clients.
- They’re resource consuming. Monitoring vanity metrics might be easy, but it still requires time and resources. Imagine what you could accomplish with those resources elsewhere.
Here’s our official seven-step process to help you kick your vanity metric habit. Grab a notebook and a pen because you’re going to want to write this down.
Step 1: Take inventory
Make a list of all the metrics you’re monitoring for your business and for your clients. Take a break from obsessively checking those numbers. Not all of them are vanity metrics, but take a step back from them all while you complete this process.
It might be tough, but this is for your own good (we promise).
Step 2: Stop looking at what the competition is doing
You shouldn’t care about what your competitors are doing. Every minute you spend looking at what they’re doing is a minute that could be spent figuring out what you should be doing. Don’t waste time wondering (and trying to measure) if their processes are better than yours.
Why assume they know more than you do? They could be just as addicted to vanity metrics.
Step 3: Determine what exactly your customers pay you for
What is your business all about? Are you in consulting? Programming? Media? What do you do for clients? Decide exactly what it is that your clients are paying you for. For example, are they paying you to monitor social media accounts?
Determine the individual tasks that your clients pay you for.
Step 4: Determine how you make your customers money
Now that you’ve clarified the actual work you’re being paid to do, it’s time to determine the value of that work. How do the tasks from the previous step translate into cold, hard cash for your clients? For example, is your goal to use social media to increase your clients’ ecommerce sales?
Step 5: Determine how you convert leads into new customers for your business
Remember that you should be monitoring metrics for your business’ success as well. What are you doing to provide value for your business? For example, are you using Google AdWords to acquire new clients? Decide what resources you’re reinvesting in your company to help it grow.
What is it that you do to convert leads into paying customers?
Step 6: Write down all of your workflows
A workflow is a diagram that shows the lifecycle of a lead. It begins with a lead first encountering your business and continues right through to the purchase. Note that most businesses will have more than one workflow. Create workflows for your clients and your own business.
What’s the lifecycle of your goals with various clients? What’s the lifecycle of your goals for your business? Record it step-by-step.
Step 7: Decide on 5 metrics that best show your value and progress
Now take a long, hard look at those workflows. Each step has metrics associated with it. Write all of them down for each workflow. You’ll probably have a pretty big list now, especially when you add the metrics from step one. Measuring all of them would be a huge undertaking, so it’s important to decide on five that truly matter for each workflow.
Which five metrics best define the goals you’re working towards? Which five metrics help you accurately record success and progress? These are the metrics you want to measure. For example, how many leads from Twitter convert into ecommerce customers for your clients?
It’s not an easy process because it’s not an easy habit to kick. Getting rid of the crutch that is vanity metrics is tough, but your business and your clients will thank you.
Follow this simple process and you’ll be more focused on what really matters. More importantly, you won’t be headlining in success theatre. Plus, you’ll know the difference between absolute success and total disaster – before it’s too late.