We’ve all fallen into that trap of watching our follower count rise and congratulating ourselves on the gains. But here’s the thing: until those followers become customers, they’re meaningless as far as your bottom line is concerned.
Followers are one example of “vanity metrics.” They might make you feel cool, but they’re not necessarily going to create a more profitable business at the end of the day.
Which metrics are nothing but flash and which will serve up useful facts to help your business grow? Here’s a rundown of the contenders:
You’re tracking: Followers
Track this instead: Engagement
While a long list of followers is satisfying, the metric your business should really be concerned about is engagement. When you concentrate on engagement, you’ll learn more about why one post generates excitement among your followers and another post is barely glanced at. From there, you can learn a lot about who your customers are and what they want.
How many followers are commenting on, liking, and sharing each post? Which newsletters or emails are being passed from one customer to another and how often is that happening?
Looking at engagement tells you which marketing efforts spark the most interest and have the potential to increase your leads and conversions.
A Net Promoter Score (NPS) goes one step further by measuring the likelihood that an engaged follower will recommend you to someone else. To learn more about calculating your NPS and how to do so, head here.
You’re tracking: Awareness
Track this instead: Preference
When you’re starting to break into an overcrowded field, it can be tempting to keep track of your brand awareness and get excited about any gains in it. After all, people can’t buy your product if they don’t know about it, right?
However, even if someone is aware of your product, they may still prefer your competitors. Brand preference measures your success against your competitors, assuming that all other variables (price, for example) are equal. In that case, what percentage of all potential customers are choosing you versus your competitor?
The preference metric guides you in making decisions like lowering your prices, increasing your marketing spend, or changing your distribution to become more competitive.
You’re tracking: Visitors
Track this instead: Bounce Rate
A large number of visitors to your website indicates that you have readable, interesting content with high SEO. But are those visitors staying around or “bouncing” off to another, perhaps competitive website?
Your “bounce rate” is the percentage of visitors that click away after viewing one page on your site (as compared to visitors who land on a page, then click through to another page afterwards). You want to keep that bounce rate as low as possible — depending on industry and primary traffic sources, average bounce rates are anywhere from 26-70%. For example, bounce rates from “cold” traffic sources, like search engines, tend to be higher, as they’re less engaged visitors than “warm” traffic coming from emails, social media, etc.
At any rate, it’s much easier to convert visitors to customers if they stay longer, digest your content, and at least consider your call to action before moving on, so focus on keeping your bounce rate low.
You’re tracking: Leads
Track this instead: Conversions
When visitors sign up for a trial subscription or leave contact information, you have cause to celebrate. You’ve just added another lead to your sales funnel and that is a good metric to follow.
But did that lead actually become a subscriber or regular user of your product? Conversion rate from a lead to a customer is one of the most important metrics you can track. In addition to that, make sure you’re looking at other factors like:
- Length of time before converting visitors to actual customers
- How many conversions turn into one time customers vs. repeat customers
- Where the visitors who do convert from lead to customer are coming from (we talk more about this in this post, and offer features to help you do it)
This one is a bit different from some of the other metrics, because you definitely need to be tracking both of these. But at the same time, don’t make leads the be-all-end-all goal. After all, converting visitors to leads doesn’t do much good if you can’t convert those leads to customers.
You’re tracking: Cost of Marketing
Track this instead: Cost of Customers
Marketing campaigns consume resources—time, money, people. And your resources may be limited.
However, the telling metric to watch is not the overall cost of marketing, but the cost per customer, also known as the customer acquisition cost. Consider the following:
- The cost of acquiring each customer
- How long each customer is staying with your product
- How much revenue each customer is generating over a month, year, or lifetime of being a customer
Paying attention to all of these data points can also indicate where you should be devoting your resources and where opportunities exist for upselling, and help you create a data-based marketing plan. That’s much more useful than a bottom-line marketing cost!
Make the most of your metrics
Metrics can be empowering and useful. They exist to give you facts about your customers, redirect your marketing efforts, and make the most efficient use of your resources. Of course, that only applies when you’re following metrics that matter, versus ones you think matter (but don’t really), or less-talked-about metrics.
They also interact with each other, so make sure you’re calculating what you think you are calculating. For example, if you are measuring engagement, then you may consider any mention of your brand to be advantageous; but if you are measuring preference, you want to calculate only positive mentions that result in customers choosing your brand over the competition’s.
When used well, metrics give you true insight into your return on investment. When you measure whether customers are actively engaged, show a preference for your brand over your competition’s, stay on your website, are converted to customers, and then stick with your product over time, you’re ditching flashy metrics to focus on the metrics that matter.
Want to learn more about how to boost the metrics that matter?
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