Back to Learning Center
Subscribe
Join 40,000+ sales and marketing pros who receive our weekly insights, tips, and best practices.
Thank you! You have been subscribed.
Learning Center
Learning Center
Close
The IMPACT Learning Center

Free resources to help you master inbound marketing and They Ask, You Answer

Access the Learning Center

Access the Learning Center

Access the Learning Center
learning_center_grey__What is They Ask, You Answer-v2-black

What is They Ask, You Answer

What is <span>They Ask, You Answer</span>
Articles, Podcasts, & Updates

Articles, Podcasts, & Updates

Articles, Podcasts, <span>& Updates</span>
Free Courses & Certifications

Free Courses & Certifications

Free Courses & <span>Certifications</span>
On-Demand Keynotes & Sessions

On-Demand Keynotes & Sessions

On-Demand <span>Keynotes & Sessions</span>
Events
Events
Close
IMPACT+ Membership
IMPACT+ Membership
Close
Services
Services
Close
Navigation_8_2021_taya

They Ask, You Answer Coaching & Training

They Ask, You Answer Coaching & Training
They Ask, You Answer Workshop

They Ask, You Answer Workshop

They Ask, You Answer Workshop
Navigation_8_2021_workshop

Inbound Marketing Services

Inbound Marketing Services
Navigation_8_2021_website design - monitor

Website Design & Development

Website Design & Development
Navigation_8_2021_hubspot implementation

HubSpot Training & Implementation

HubSpot Training & Implementation
Navigation_8_2021_virtual selling

Virtual Sales
Training

Virtual Sales <br>Training
Navigation_8_2021_swell - paid ads

Paid Search & Social Services

Paid Search & Social Services
Become a Certified Coach
Become a Certified Coach
Close
Marketing Strategy

Vanity metrics: Why your team is celebrating the wrong numbers

By Ramona Sukhraj

Vanity metrics: Why your team is celebrating the wrong numbers Blog Feature

Spotify has over 60 million users; Twitter, 330 million; Instagram, 800 million.

"New users" is to the SaaS world what the “Red Wedding” was to Game of Thrones fans -- a hot topic, a game changer; but depending on your business goals, industry, and even audience, it may not be a fair representation of your organization’s actual growth or success.

For many SaaS organizations it is, in fact, a vanity metric.

What Are Vanity Metrics Anyway?

Simply put, vanity metrics are numbers that look and sound impressive, but don’t really correlate back to your goals or bottomline.

For example, the number of “likes” on your Facebook update, or the number of views on your pricing page.

Sure, seeing numbers like these hit an all-time high is exciting, but if it doesn’t translate to conversions or revenue, why does it matter?

If you have 100,000 people visiting your consultation page every day, but none are filling out the form, are those views really worth celebrating?

This is the question that Brian Balfour poses in his article, “Avoiding The Wheel Of Meaningless Growth.”

Why Are Vanity Metrics So Dangerous?

Vanity metrics, like the name suggests, are superficial. While they’re flashy and look great on paper, they are rarely an indication of the deeper health of your company.

Balfour argues that in many of today’s organizations, especially those in the SaaS industry, teams are too heavily focused on vanity metrics and are, in turn, losing sight of what actually reflects their growth and profitability.

To better illustrate this point, take a look at this chart from his article:

Wheel-of-meaningless-growth.jpg

First, vanity metrics are celebrated outside of the organization (say by the press or industry influencers.)

Then this external recognition is celebrated within the organization, and subsequently,  the team is encouraged to repeat the success to prompt further external celebration.

It’s basic Psychology.

By rewarding the achievement of a vanity metric with both external and internal praise, organizations condition their team to repeat that action. It creates a cycle of team members striving to achieve numbers that don’t actually work toward their goals and neglecting those that do.

At Sidekick (a tool that notifies you when your email is opened, now a part of HubSpot Sales), the growth team used to monitor a number of different metrics both big and small, but ultimately, they all lead back to what Balfour calls their “north star:” Weekly Active Users (WAU).

But what makes this their most important and true growth metric?

How to Define Your True Growth Metrics


The Sidekick team pinpointed WAU as its most important metric based off of four key criteria:

  • Reflects retention
  • Represents meaningful engagement
  • Relevant
  • Honest.

Retention & Engagement

For a SaaS company like Sidekick/HubSpot, retention and engagement are extremely important.

Having new registrants or downloads on your app or free trial are meaningless if they aren’t using it, or worse, if they delete it. (You should see App Graveyard in my iCloud. Ugh.)

People who are not active aren’t actually users and people who don’t use your app aren’t going to pay for it or stick around in the long run, ultimately taking its toll on your revenue.

For Sidekick, WAU reflected both of these points, but depending on your offering, this metric may not be relevant.

Relevance

In terms of relevance, your metric has to make sense for how your offering is actually used and positioned.

For instance, let’s say your product is a pedometer app, intended to track your user’s daily movement. Since you ideally want your user to open the app everyday, tracking and working to get more monthly active users does not help you progress towards this actual goal.

Say you have 15,000 MAU, but only 1,000 daily. Yes, you can publicize, celebrate, and reward having 16,000 users, but at the end of the day 15,000 of those are not invested enough to use it everyday (or most likely, pay for it.)

Sidekick was designed to be integral part of a professional’s work day routine so looking at the work week through WAU is a relevant and helpful measurement to have tracked.

Honest

Last, but not least, an effective SaaS metric should be honest.

Not honest like it doesn’t lie to you when you ask if it ate the last slice of pizza and there’s clearly crumbs and sauce in the corner of its mouth, but honest in that it frames a realistic portrait of your current state.

Inflated numbers or bloated percentages will not only misrepresent your success to your audience, but they will also give your team a false sense of security regarding its current state and the work that has to be done.

As Balfour discusses, 452% growth can still be something a small number depending where you began, or 10,000 new pageviews could just be a drop in the bucket if you average 10 million in a normal week. Putting a positive spin on the numbers, may dull the impact initially, but in the long run, it will the progress you make towards your goals.

Key Takeaway

Overall, your company needs to frame its numbers in metrics that most effectively illustrate what your goals are, while also making it easy to determine when progress has been made or needs to be made.

While many SaaS experts find it best to track your Monthly Recurring Revenue, Churn, and Conversion Rates, your metrics may differ.

Once your true growth metrics are identified using the criteria above, your team will know where it focus its efforts and stay on track, and most importantly, they’ll know when it’s actually time to celebrate.

Topics:

Marketing Strategy
Published on January 3, 2018

Recent Articles

Why You Might Want to Hire a Marketing Coach Instead of an Agency for Your Business

By Kimberly Marshall on October 26, 2021
7 min read

9 Crucial Elements Every Homepage Should Have [+Video]

By Ramona Sukhraj on October 21, 2021
6 min read

How To Become a Better Coach (for Business Consultants, Sales Coaches, and Marketing Strategists)

By Kimberly Marshall on October 20, 2021
8 min read

Get Clients To Seek Your Approval, Not the Other Way Around (Podcast)

By Kimberly Marshall on October 13, 2021
1 min read

Why Your Business Always Needs to Invest in Marketing — in Bad Times and Good (+ Video)

By John Becker on October 7, 2021
8 min read

How to Grow a Digital Marketing Agency (with Coaching Services)

By Paul D. Grant on October 6, 2021
6 min read

Hire Freelance Writers with Caution (Read this First)

By Paul D. Grant on September 27, 2021
10 min read

5 Key Elements of a Winning Inbound Marketing Strategy

By Kimberly Marshall on September 14, 2021
14 min read

How to Get the Most Out of Your 2-week HubSpot Free Trial

By John Becker on September 13, 2021
5 min read

Free inbound marketing courses and training

By Paul D. Grant on September 10, 2021
4 min read

Drift report on pandemic fallout reveals seismic shift in marketing strategy

By Paul D. Grant on September 9, 2021
2 min read

How much HubSpot do I need?

By John Becker on August 17, 2021
4 min read

Inbound marketing strategy: 7 steps to success

By John Becker on August 11, 2021
8 min read

How can the StoryBrand framework be used for inbound marketing?

By Zach Basner on July 21, 2021
6 min read

8 business blog design examples that keep readers engaged

By Steve Polito on June 16, 2021
6 min read

Think you’re paying too much for HubSpot? Here’s how to get your money’s worth

By John Becker on May 5, 2021
5 min read

Do I need to hire a HubSpot specialist, or can someone on my team handle it?

By John Becker on April 30, 2021
4 min read

Every website agency talks about strategy; How is IMPACT different?

By John Becker on April 19, 2021
5 min read

Customers aren’t getting what they need from my website; What can I do immediately to change that?

By John Becker on March 8, 2021
6 min read

6 tips for creating a successful HubSpot and Salesforce integration

By Joe Bachir on February 12, 2021
5 min read

Is your marketing still relevant in 2021?

By John Becker on February 11, 2021
6 min read

How to best use your 2021 marketing budget so your company rebounds

By John Becker on February 8, 2021
4 min read

53 best marketing books you need to read (updated for 2021)

By Allison Melnik on January 21, 2021
15 min read

Digital marketing budget: How much should you spend per month?

By Eric Dunn on January 14, 2021
9 min read

The 10 marketing KPIs you should be tracking (updated for 2021)

By Carolyn Edgecomb on January 5, 2021
9 min read