Actionable vs Vanity Metrics: which ones matter?

Measuring metrics and KPIs is part and parcel of running a successful business operation. There isn’t a CEO in the world who will tell you otherwise. But are business operators clued up as to which metrics you want to explore full throttle and which can be left by the side of the road?

What are actionable and vanity metrics?

Unless a metric can be attributed toward taking an action, it’s considered vanity. For example you’re the owner of Harry’s Hipster Fashions, an eCommerce store that sells t-shirts, beard oil, and coffee. As the owner you’re ‘totally stoked’ that your Facebook page has over 8,000 likes and your website acquires over 10,000 page views per month. You think of these as measures of success. But is Harry able to use these to actually drive any tangible business action?

In contrast, an actionable metric is a measurement that empowers business owners to make decisions and inspire action-orientated behaviour. Eric Ries — an entrepreneur who founded IMVU, a business that generates $1-million USD in revenue per month — states that “the only metrics that entrepreneurs should invest energy in collecting are those that help them make decisions”.

Let’s look at Harry’s store again. Harry has been actively measuring his Average Order Value (AOV). In the month of July, he sees a dramatic decrease in this particular metric. He’s immediately able to investigate why people are choosing to spend less at his store (he’s taking action). His research finds that the decrease relates to a change in shipping costs. Harry decides to reverse his policy and once again he offers free shipping with all purchases (he’s making decisions), which in turn allows AOV to increase (he’s achieving a goal).

Social media: actionable or vanity?

Social media can be both a vanity and an actionable metric depending on how it’s used. If your audience are mere spectators of your brand, don’t generate any revenue, and are there to make you look and feel good, they’re a vanity metric.

If your social media followers drive traffic to your website, share special offers that boost your AOV, support with customer acquisition costs by spreading word of mouth marketing, then great! Your social media following is a valuable metric to measure.

When it comes to social media there’s a fine line between being an actionable metric and a vanity metric. Operators need to think carefully about whether they can link a social media statistic or measure to business success e.g. increased revenue.

Which actionable metrics should I measure?

Startups in particular may be more inclined to focus on vanity metrics. However, to gain any sort of investment new businesses will need to show growth data as a minimum, and that’s not something you find by simply counting the number of Facebook likes your business has.


Understanding where your customers come from is one of the most action-oriented metrics a business can measure. By implementing a lead-monitoring strategy — for example Salesforce, Pardot, or even Google Analytics — you’re able to analyze and optimize your marketing strategy, therefore insuring you win more business. Sounds a bit more fancy than measuring the number of Twitter followers your business has, doesn’t it?


When a person lands on your website, they’re commonly known as a lead. If that person engages with your business whilst browsing, for example they give you an email address, sign up to a newsletter, or add an item to the shopping cart, they become a prospect. When they make a purchase, they’re become a customer.

You need to track the amount of people who become leads, prospects, and then customers. These are your conversion rates and they’re incredibly valuable when explaining how your bottom line is performing, alongside setting growth goals.


Without understanding specifically how much money you’re making, how will a business survive beyond the first few months? Analyzing revenue — whether you choose to look at MRR, CLV, AOV, or a different revenue based metric — will always give you the opportunity to see where you’re making money and where you’re losing it. This in turn will allow you to take action.

Actionable metrics don’t have to take all the time in the world. Conversion rates can easily be implemented and tracked via Google Analytics, for example. A great tip is to ensure that when you’re measuring actionable metrics, you’re segmenting them into cohorts. This will give you a deeper understanding of your customer behaviour.

Business owners need to take a long look in the mirror and question whether the metrics they’re measuring are for vanity purposes, or whether they’re enabling decisions that positively impact business growth and drive success.

Originally published on the now defunct Control blog.