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Previously, data had to be collected by hand and assembled and interpreted by humans, a tedious task. Here in the digital era, that same data is easily tracked and compiled, giving marketers more data than is even necessary sometimes. Likes, shares, comments, followers, open rates, page views, traffic, time on site, are examples of data that is being tracked, but is it relevant? Distinguishing between vanity metrics and actionable metrics is key to being able to continually take action towards activities that can be traced to the bottom line. Here, we’ve explained vanity metrics, provided examples of actionable metrics, and given guidance toward finding actionable metrics for your business.
Metrics that are easily collectible but don’t relate to the bottom line have come to be known as “vanity metrics,” because they look good on paper and sound impressive. They aren’t useless—you can trace non-transactional marketing goals, like brand awareness and share of voice, and such numbers can help uncover issues and help to reshape campaigns. However, they don’t trace the path to dollars—the kind of information on which to base business decisions.
What you really need are measurements that tell where the revenue is coming from, and whether your key performance indicators are being met—we can call these “actionable metrics.” Here are three things that businesses use because they help monitor success and grow their business.
Let’s look at engaged contacts, email response rate, and bounce rate.
1. Engaged Contacts – Often, businesses will reference the number of customers, contacts or prospects they have, but that number may have very little meaning. As an example, if a business claims to have 125,000 contacts, but only 25,000 of them regularly engage with their email, website, social, or in any other way, how important are the other 100,000? Rather, focus on growing the “25,000 engaged” number, whether by building look-alike audiences for this group and engaging new prospects, or finding new ways to engage with the unengaged group.
2. Email Response Rate – For a long time, marketers looked at their open or click rate when reporting on email campaigns, but that number does not always show effects on the bottom line. If an email stated, “Click the link below for $100,” you may have an extremely high click rate, but are recipients clicking for the right reason? Rather, focus on a number related to those who respond positively to the email, or those who visit a landing page and share their information because they are interested in the offer. By improving your click rate you will likely be improving the amount of responses, but as a stand-alone metric opens and clicks are not as relevant.
3. Bounce Rate – There are many metrics a marketer can look at when analyzing website traffic. A very popular and obvious one is website visits, and often any possible action to increase visits is taken. However, as your website traffic is growing, are these visitors actually interested prospects and customers? A good metric to judge that is by looking at your sites bounce rate, which will measure the amount of people who visit your site and only look at one page and leave. This can be a sign that your content is not engaging, or your site is less relevant for the user than they expected. Assuming the goal of your site is to generate new contacts and customers, your bounce rate can be a critical metric to look at and improve.
AT THE END OF THE DAY…
Actionable metrics will be different for any business, based on objectives, size, available channels, business purpose, etc. There are differences in brands, websites, website purposes, and available actions.
But actionable metrics should lead to action—they should tell you both what you need to change, and what you need to keep because it’s working well. Use some or all of the methods detailed above to get a clearer picture of how your marketing efforts are doing.
What will work for your organization? Jacobs & Clevenger has a history of data driven marketing —contact us to learn how your organization can uncover greater actionable value in your data.