Earlier this year Yogendra Vasupal, the founder of Stayzilla, announced in a blog post he would shut down all operations of his company – despite having recently raised $33.5 million.
Yogendra wrote an honest and transparent post highlighting the reasons for his decision and admitting that he made mistakes. In the post, he openly admits the company focused on irrelevant data which ultimately led to their demise:
“The initial seven years were all about having negative working capital, positive cash flow and a sustained ability to fund our own growth. Those were the only metrics we tracked. In the last three to four, though, I can honestly state that somewhere I lost my path. I started treasuring GMV [Gross Merchandise Value], room-nights and other ‘vanity’ metrics instead of the fundamentals of cash flow and working capital.”
We read news stories every day explaining how companies focused on ‘X’ to overachieve their targets, or how the latest trend must be implemented in your organisation to make it successful. However, the danger with focusing on all this new information is that it is easy to lose sight of what is really important.
So, what are the equivalent vanity metrics in marketing and comms?
As professionals working in an ever changing, digital industry, our client programmes and campaigns are filled with copious amounts of data and metrics that we simply cannot make use of.
Just because a metric exists does not mean that you have to use it, even if it worked for someone else. Think about whether it is worth the investment of your time and whether you have the resources to measure it. Decide which is more important.
Drowning in vanity metrics
Impressions, followers, share of voice, likes etc. – we have an abundance of metrics to choose from but the challenge marketers face is to distinguish which metrics will have an impact on business objectives.
Before you make the decision to use a metric, stop and say to yourself “does this metric help me make a decision?” and “When I view this metric, does it help me understand how to get closer to my business goals?” If you answer “no” to both of those questions, you are looking at a vanity metric.
Initially, vanity metrics appear important, but they tend to be superficial and often have a negative impact on your business goals.
initially, vanity metrics appear important
Yes, figures in vanity metrics may show that your business is successful but they will often not provide any insight that will help grow your business.
Re-tweets, likes and AVEs are good to use as a benchmark but they are not always useful for measuring the success of your campaign. Don’t let metrics hold you back; ensure that they give you some insight in order to make an impact on your business.
Share of voice: the complications
As an example, share of voice is a metric that measures the frequency that your organisation is mentioned in comparison to your competitors. For most marketing professionals this metric indicates audience preference and brand trustworthiness.
However, there are a few issues when using share of voice as a metric. Often, you will need to use services that operate sophisticated AI algorithms and language processing technology to accurately track your organisation’s share of voice.
which metrics would help make an impact on your business
These services are often quite expensive and are still not 100% accurate. Without this accuracy, you will be left with no real insight. Worryingly, it’s also very easy for organisations to manipulate share of voice figures. For instance, Twitter bots can be used to increase how often a brand or public figure is being talked about.
This tactic will boost how often your brand is mentioned in comparison to your competitors but it will not increase customer preference or your brand’s trustworthiness.
Quality over quantity is an expression that we hear every day, but in this case, it’s applicable. Carefully consider what would be better to measure and which metrics would help make an impact on your business?
So, what can you do?
It’s important that your marketing and communications strategy doesn’t focus on the wrong metrics. You need to make sure that everything you measure will give you real insight and positively impact your business.
In light of this, here are three things all marketing professionals should consider when thinking about metrics:
– Marketing objectives need to align with business objectives, whether this means acquiring new customers or increasing profit
– Do not get side-lined by irrelevant metrics that will not help you achieve your goals
– Experiment with different ways to measure campaign success. Change your activities to see what works and what doesn’t. Technology is constantly evolving and how you measure the success of your campaign today may be less impactful tomorrow. Question everything you do and try new approaches.
Don’t just focus on the latest trend for the sake of it. Ensure you have a clear understanding of how it will benefit your organisation. As we have seen in Stayzilla’s case, it’s important not to get swept up in the latest fad or you can face serious consequences.
Data, analytics and measurement are important for all marketing campaigns but it’s equally as important to focus on the right approaches. Develop your understanding and find out what works for your organisation to ensure overall business success.