In one of my previous roles, I worked on a redesign project with my team. We weren't meeting up to one of our set business goals for the year which was an increase in ticket sales on our online web market. Even after carrying out multiple marketing campaigns, analytical tools revealed that we had high traffic but we still weren't able to get our visitors to convert to paying customers. Let's assume we had 50 visitors per day, only 5 visitors bought tickets. 10 visitors made it to the checkout page but they didn't proceed to make payments.

I was excited at first by the amount of traffic we had on the website but that wasn't enough for the business. Those metrics didn't translate to anything that would improve our long-term goals. How can we use those numbers to make a business decision?

It's the same as having an increased sign-up rate, It is an important metric to track but over time looking at just that isn't enough because you don't want people to only sign-up or visit your website alone, you also need them to convert.

Vanity metrics are those metrics that look good on the outside (increased number of followers, increased number of sign-ups) but they don't reflect an improvement in a business's long-term goal. And they don't give insights into the performance of your product.

"Vanity metrics are statistics that look spectacular on the surface but don’t necessarily translate to any meaningful business results. Examples include the number of social media followers or the number of views on a promotional video. While the data might seem superficially impressive, these metrics do not accurately reflect an organization’s key drivers (e.g., active users, engagement, the cost of acquiring new customers, etc.) and provide very little insight into how a product or initiative relates to broader business objectives." - Product Plan

To be clear, there's nothing wrong with these metrics but I think they shouldn't be measured in isolation and shouldn't be what will steer business decisions. If an e-commerce site is measuring the rate of sign-ups, it would be important to also measure the purchase rate. If an influencer has a million followers on social media, that number would be of greater value if say 500k of those followers buy a product using the influencer's promo code. In this scenario you aren't just measuring the number of followers, you are also measuring the conversion rate, the revenue generated. These metrics show genuine user behaviour and business impact.

Finally, how do you know if a metric is a vanity metric? One way to identify a vanity metric is if it doesn't empower you to make a valuable business decision and if it doesn't provide valuable insights into the true performance of your business or product based on the set goals.

I would love to hear about your experience identifying these metrics in the products and businesses you build.