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3 SaaS Vanity Metrics (and What You Should Measure Instead)

By Emily Smith on Wed, Dec 23, 2015

Every metric looked at in isolation is a vanity metric.” – Alex Chaidaroglou

With more and more data available to us, how do we know which metrics we should pay attention to, and which are fluff?

It’s easy to be attracted to the numbers that make you look good, but you could just be lured in by vanity metrics, rather than metrics that offer real, actionable information to measure and improve your SaaS company’s growth.

What is a Vanity Metric?

Vanity metrics look good and make you feel like you’re doing a great job – but without giving any real insight into your business and its performance.

These superficial metrics look great on paper, and because of this it’s easy to get hung up on those metrics, setting goals by them and losing sight of the measurements that actually reflect the deeper health of your company.

Today I’m looking at three common vanity metrics, and offering alternatives that provide actionable insights into your company’s performance.

3 SaaS Vanity Metrics (and Actionable Alternatives)

1) Free Trial Users

So you signed up 100 users on a free trial today – great job! But what about when they get to the end of their trial and only three of those convert to paying customers?

Free trial sign-ups are a great starting point, but you can’t look at those numbers in isolation. The free trial is a step towards having a paying customer, but you could have thousands of free trial users and they wouldn’t add so much as a dollar to your bottom line.

Look instead at: Converting Users

While it’s important to track the number of users you’ve got signing up to a free trial, the real value to your company comes from the users that convert to paying customers.

Rather than seeing the free trial as the goal by which you measure the success of your marketing efforts, think of it as the new starting point.

Making improvements to your onboarding process and the free trial as a whole can improve the percentage of users who are converting from a free trial, and by tracking user conversions month-on-month you’ll reveal the ‘big picture’ about your company’s success.

2) Traffic

You might have thousands of visitors to your website every month, but if none of them are converting into leads, how does that benefit your company?

Attracting loads of visitors who don’t convert into leads or customers indicates that something is wrong. Clearly your marketing is attracting people to your website, but your message is misaligned with your product or service.

Look instead at: Bounce Rate and Returning Visitors

Don’t get too hung up on the number of people who are visiting your website.

Look instead at what they’re doing once they get there. Looking at traffic numbers in isolation is purely a vanity metric, but in combination with other analytics data you can start to build up a picture that shows the relevance and value of the content on your website to your visitors.

A high bounce rate indicates that you’re attracting the wrong sort of visitors, whereas a high percentage of returning visitors shows that your content is relevant and engaging. The more relevant your content to your visitors, the more likely they are to convert into leads.

Learn more: How to Generate the Best Leads for Your Software as a Service Company

3) Social Media ‘Likes’

Sure, it’s nice to see your number of social media likes and followers increase over time, but what value does this provide to your company?

Large numbers of followers alone only serve to make you look good - they don’t contribute a tangible impact on your bottom line. You’ll need to dig deeper to uncover much more valuable social media insights.

Look instead at: Social Media Engagement

You will get a much better understanding of the value your social media activity is providing to your company by looking at how your followers are engaging with the content you share.

If a follower’s only interaction with your social media accounts is to ‘like’ your page, they’re less valuable than a follower who regularly likes your posts, or re-shares your content. Low engagement indicates that the content you’re sharing on social media isn’t providing value, or isn’t relevant to, your followers.

In comparison, if you look at your website analytics data and see that a high proportion of your website traffic is coming from social media, you know that your social media activity is relevant to your audience.

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