Not long ago, business leaders had to rely on a mixture of limited statistics, guesswork and raw instinct to determine how well their companies were running. Thankfully, we’ve ushered in the era of big data—and with it, bigger opportunities to quantify performance. Yet not all metrics are created equal, and some tend to puff up leaders’ vanity rather than measuring business success.
Of course, putting numbers behind effort makes sense. Without historical data, how could you show your salespeople, for example, that their goals are based on historical reality rather than management whim? Stakeholders, investors and sometimes the general public deserve to see your business’s key performance indicators. Otherwise, they might not offer continued financial or transactional support.
But not everything that can be measured should be measured. Some stats merely look good on paper or give you a false sense of security. You may have already struggled with metrics overload, wondering which ones honestly matter. Below are four that tend toward ego-stroking and deserve to be replaced or enhanced with more useful indicators.
1. Social Media Followers
When you initially set up your Facebook or Twitter business profile, you probably spent tons of time gathering followers and charting likes. While you definitely want other platform users to recognize your brand, you can’t rely on their collective size to illustrate your—or their—value. More followers don’t necessarily mean more potential customers. Instead of tracking how many folks follow your page, focus on assessing and improving engagement.
Engagement includes people organically talking about your company by name and retweeting your messaging. Tools like Retweet Rank can help you assess that by tracking what your customers and others are saying about your brand. Did you discover that your engagement is unacceptably low? Launch a campaign focused on quality content to give users more reason to become vocal fans. Education platform Platzi, for example, improved its engagement by using Facebook analytics to build audience segments. The company then created content for those specific audiences on its Facebook and Instagram pages. The result of this targeted marketing? Platzi’s cost per acquisition, or CPA, decreased by 40%.
2. Website Page Views
What if you keep hearing that visitors to your website are rising week after week? It might be a harbinger of something great, or it could be less important than you thought. It may feel nice to see page views increase, but that nice feeling won’t improve your bottom line. Instead, prioritize metrics that impact revenue in some way. Website speed, for instance, directly impacts conversion rates. That’s not surprising when you consider that Ericsson researchers found slow-loading web pages and videos caused users’ heart rates to jump.
After analyzing data from 10 websites and more than 26,000 landing pages, Portent researchers found that a 0- to 4-second page load time is ideal for conversion rates. With every additional second, conversion rates drop an average of 4.42%. Once upon a time, website page speed was measured using metrics that correlated to overall site speed, such as bytes downloaded per page. But “PWAs [progressive web apps] and modern optimization techniques have weakened that correlation,” explains Ishan Anand, co-founder and CTO of Moovweb, a website infrastructure platform. “Therefore, teams should focus on newer perceptual metrics that better capture how fast a site actually feels to the user.” Pay close attention to both specific site speed and overall website speed.
3. Number of Product Users or Subscribers
Having a large number of subscribers doesn’t absolutely mean your service will succeed. For instance, Google’s musical arm may be in trouble, even though it reportedly has snagged nearly 16 million paying subscribers. The problem is that it’s woefully lagging behind competitors and losing steam. Despite the fact that 16 million is a lot of paying listeners, it hasn’t been enough to wow investors. Remember: Google+ had billions of users but ultimately went the way of the dodo.
More important than raw users are active users—and the way they fell in love with your product or service matters, too. These are the people who keep coming back, like the Spotify users who religiously turn on their tunes during their morning commutes. Active users are more apt to renew subscriptions and even refer other people because they’re hooked. And you can learn a lot from them. Their feedback can help you elevate your product, and by knowing more about their journey through your funnel, you can improve your sales funnel for others. See what your most engaged customers have to say and use what you learn to drive further sales and marketing actions.
4. Annual Employee Engagement Surveys
Plenty of companies compile employee engagement studies every year. They’re a good start, but they hardly tell you the whole story about how your workers feel day to day. You could have terrible turnover and churn rates, but if disgruntled workers leave before adding their two cents to your annual survey, you’ll never know the real reasons you’re leaching talent. Hearing glowing remarks once a year from your team might feel good, but it alone won’t help you retain top talent or reach your business goals.
Instead, you need to get as close to real-time feedback as possible to understand your team members’ feelings, gauge their morale and hear their ideas for how the company can improve. There are myriad means to these various ends. You could ask employees to leave a sticky note with a number from one to five on a table before heading home. One would indicate a bad day, five a great day. Calculating the stickies each day could indicate disengagement fast, giving you a chance to intervene. There are tech products like weekly 15Five questionnaires, which provide a similar regular snapshot for your leadership team. Use the platform for questions that will foster more daily trust and build bonds among your squad.
Analyzing the vitality of your company belongs on your to-do list. Just make sure the numbers you’re focused on aren’t skewing your interpretations. Taking time to weed out vanity metrics will leave you with smarter data to help you make even smarter business decisions.