Last week we talked of the electrochemical reactions activated by our brain as we interact with social media, and of how we can take advantage of these mechanisms through very brand engagement-oriented communication campaigns.
In that article we also mentioned the term “vanity metrics”, defining it as a negative element that can lead us to exchange quantity for quality, thus dangerously mixing all up.
Today we better clarify what this is.
«Vanity metrics make you feel good, but don’t give you clear guidance on what to do. The only parameters on whose collection entrepreneurs should invest energy are those that help make decisions». (Eric Ries)
Visits, visitors, reach, fans, followers, likes, shares, retweets count for nothing
The first approach to online communication must necessarily measure the amount of the people you reach out at the beginning.
Whether it’s a corporate website, a blog, a Facebook page, a LinkedIn broadcast or our first tweets, such a measure is natural and also fair.
However, the more our business gets mature, the more we should focus on quality parameters, namely on what works and what doesn’t, thus even threatening to damage us in terms of either economic performance (if we are aiming to sell our services or products) or of brand awareness.
In this second phase, keeping on considering the traffic of our site, the number of followers or Facebook likes, the shares, the retweets or even the Serp placement of certain image-only keywords (the so-called “vanity keywords”), definitely helps our egos – as well explained by startup guru Eric Ries, author of “The Lean Startup” – but it could make us lose sight of the real end goal of our online presence: that is basically to make money.
Mind you, seeing fans growing week after week is not a problem in itself. The problem is if we stop to that “vanity metric” without asking what benefit we are getting from the constant increase of our fanbase. The problem is not to see whether we are really turning those fans into customers. The problem is to focus on the growth of the fans even by investing figures higher than the economic advantage that this growth will actually take us.
And realizing it too late is very dangerous (also because it is an easily alterable number: a good campaign with Facebook Ads is enough to incredibly explode our fanbase, but not to give us a real return on investment in terms of lead generation or sales).
In short, vanity metrics make us feel popular, more popular than our competitors, but they don’t give us a true advantage in terms of business. Ultimately, what does interest us most: having more likes on our Facebook page than our direct competitor has, or reaching a larger market share and a higher profit margin than anyone else?
The five KPIs that (maybe) you’re not considering, at your peril
The first thing to understand is that there are two types of metrics: vanity metrics and the really important metrics. The latter ones (also called “actionable metrics”) link specific measurable results to specific actions.
For instance, let’s pretend that your site last month received thousands of visits.
Great! Let the champagne pour!
But what is your bounce rate? How many pages were viewed by each user? How much time was spent on each page? How many visitors then returned? How many times did your lead magnet reach the target? How many users signed up to your newsletter? And how many came all the way to the buying process of your products if you are an e-commerce? Or again: how many returned to buy more than once?
In the vast ocean of metrics, it is important to understand which key performance indicators (KPIs) will guide our decisions.
Every business, of course, must be based on specific actionable metrics, which vary according to the industry. However, five of them are common (as listed by Nichole Kelly, now more than five years ago, in the book “How to Measure Social Media”) and can help us identify the most correct KPIs:
- exposure metrics
- influence metrics
- engagement metrics
- action/conversion metrics
- customer retention metrics
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Exposure metrics
These metrics show the audience exposed to our brand (visitors, fans, followers, subscribers) as well as the times they got exposed to our message (views, visits).
If we stop at their quantitative analysis, they get to be just vanity metrics. But if we consider them in relation to a number of other data, they help us better analyze the performance of our business and, consequently, take relevant decisions.
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Influence metrics
They measure the online influence of our brand, that is the impact our network has in terms of “share of voice”, “sentiment”, “top influencers mentions”. They are essential to take the pulse of our brand awareness.
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Engagement metrics
They analyze the degree of involvement of the audience, by measuring how many reactions and interactions have been generated in terms of accesses, session length, page depth, comments, chat, sharing, feedback from readers and so on.
The more we involve the user in our brand communications, the more we’ll get able to turn him/her into a real customer.
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Action/conversion metrics
They are definitely the most important of all, because they measure the results in terms of actual conversions: how many downloads were made from one of our content, how many subscriptions we got for our newsletter, how many qualified leads we track and, most importantly, how many actual sales we have concluded.
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Customer retention metrics
And here we finally come to loyalty, that is to metrics allowing us to track how many times “the murder is back on the scene”, turning from occasional customer to precious repeater.
And this, in the end, is the only thing we should really care.
(Photo courtesy of Nichole Kelly via Flickr)