Many online businesses understand the importance of analyzing metrics, but how do we know what is actually effecting the changes we observe? Vanity metrics provide no real insight into the success or failure of your business strategy. Collecting and analyzing actionable metrics can help you establish a better understanding of customer behavior and give you the tools to optimize any type of referral marketing program you are running. Learn more about the differences between metrics, which ones you should be tracking to reach your social media referral marketing goals, and how to do so with our free Whitepaper today!

1. The Dangers of Vanity
Metrics
A Whitepaper

2. The Dangers of Vanity Metrics
Many online businesses understand the importance of analyzing metrics,
but how do we know what is actually effecting the changes we observe?
Let’s start by defining two different types of metrics that many businesses
track daily:
Vanity Metrics: These metrics are easily manipulated and don’t
necessarily correlate to substantive analytical data. While these metrics
may show a response to one particular event, say an individual blog
posting, they don’t provide guidance on future strategy. Vanity metrics
make us feel good, but don’t help improve and optimize business
strategy.
Actionable Metrics: View vanity in comparison to actionable metrics. An
actionable metric provides data that ties specific actions to observed
results. Experimenting with split A/B testing and seeing how one group
performs against the other can actually help optimize your strategy
through further experimentation. They’re helpful, useful and invaluable.
The key difference lies in value: vanity makes you think about self-
inflation while action is getting your business optimized and moving
forward in a tangible way.
// Page 4

3. The Dangers of Vanity Metrics
Take a look at the following table pulled from Google Analytics:
We can see that this webpage got 36,773 visits today and 57,269 page
views. But what can this really tell you about your strategy?
Because we have no concrete data collected on the behavior of our
customers, we can’t single out one factor that impacted the jump in views.
Did a blog get reposted? Was it just luck? It’s very difficult to glean insight
from such broad data.
Vanity metrics can be difficult to inform business strategy because they do
not offer substance or suggest rationale, but only the current state of the
product.
// Page 2
Page 6

4. The Dangers of Vanity Metrics
Now let’s take a look at the following dashboard pulled from Ambassador’s
referral marketing software:
This dashboard gives us metrics like social conversions, revenue
generated, number of ambassadors and clicks per share.
We now have data on who’s sharing our information, where they’re coming
from, conversion rates from social media content, account sign-ups,
revenue generated….basically a giant toolbox of data for your business to
analyze as needed.
Looking at data on a per customer basis let’s us understand actions that
lead to success and optimize our online strategy rather than just judge how
well we are doing based on a moment in time.
Now that we know about the types of metrics we should be analyzing, how can
we determine the metrics that are most useful to our current situation?
// Page 3 8
Page

5. The Dangers of Vanity Metrics
Initially, you can start out by identifying the issue that you are seeking to
address. Have an issue with online web traffic? Or do you want a better
understanding of what drives customers to share content? Asking the right
questions can help determine where you’re being successful with your
word of mouth marketing program, and where you need improvement.
As a rule of thumb, keep in mind that anything that can contribute to a
greater understanding of your customer’s online behavior should be
tracked and measured.
Three main points to keep in mind when determining the appropriate types
of metrics:
1. Measure what matters to the health of your business.
2. Measure customer behavior, not intermediate steps.
3. Measure macro metrics to pinpoint what needs improvement.
To summarize, vanity metrics provide no real insight into the success or
failure of your business strategy.
Collecting and analyzing actionable metrics can help you establish a better
understanding of customer behavior and give you the tools to optimize any
type of referral marketing program you are running.
For more information, visit www.getambassador.com and receive
actionable metrics to start tracking and optimizing your next referral
marketing program.
// Page 610
Page

6. Ambassador enables any company to easily track, manage &
reward their advocates for referring customers and driving
conversions. Receive actionable channel-specific metrics;
including shares, clicks, conversions, revenue and clicks per
share. Ambassador can be fully integrated into your
website, maintaining your look & feel while providing a
frictionless experience for your advocates.
Check us out at getambassador.com and try a free 14-day trial!