Faux Metrics

When I learned French in high school, our teacher spent one of the first classes warning us about “Faux Amis” (False Friends).

What color is “bleu?”… “blue!” Simple.

What number is “trois?”… “Three.” Easy!

Then, she’d ask, “What does the verb ‘Manger’ mean?”

“That’s obvious,” we’d laugh “to Manage.”

“Wrong!” Of course it didn’t. It meant to eat.

These “False Friends”, she explained, were words that seemed like they had a deceptively obvious English translation, but they were in fact a trap.

“Those crafty French”, I thought to my 13 year old self.

I eventually got over my distrust for the French language, but I was reminded of the idea of Faux Amis recently when looking at Digital Marketing Metrics.

Vanity Metrics

I’m sure you’ve read about Vanity Metrics before. If you haven’t, here are two good primers.

Vanity Metrics are un-actionable data points. Stats you check just to make you feel good.

I recently found out that our average time on site increased by 30 seconds last month.

I felt happy at first, but then I realised that it’s a completely useless metric. If it fell by 30 seconds or rose by 30 seconds, we’d probably change nothing.

If you can’t make meaningful changes based on knowing a number, it’s a vanity metric.

Faux Metrics

Faux Metrics are vanity metrics that seem like real metrics.

Even worse than no action, Faux Metrics can encourage you to take the wrong action.

Daily or Monthly Active Users seems like an excellent metric to measure. “Total users” is clearly a vanity metric when you have 20 million users, 19 million of whom haven’t used your app in months.

But DAU/MAU can be misleading for a lot of businesses. Persicope recently shared why they don’t use DAU as a guiding star:

Optimizing for DAU/MAU doesn’t properly motivate our team to create a product that people love. Here’s why: if we were motivated to grow DAU, we’d be incentivized to invest in a host of conventional growth hacks, viral mechanics, and marketing to drive up downloads. This direction doesn’t necessarily lead to a better product, or lead to success for Periscopers.

Instead they look at Time Watched — a metric much more closely aligned with the volume of value they’re creating.

Another pair of faux metrics that consistently catch me (and others) out are email open rate and click through rate.

They’re easy to measure and readily available, and intuitively they feel like meaningful metrics. More people opening our email surely correlates with business success, right?

I’m afraid not. Some studies (with proper sample sizes) have found that open rates wrongly predict campaign success 53% of the time.

I remember in a previous company when we found that one email had a much higher open rate and click rate (we used the word “FREE” a lot in the subject line and message copy), but when we dug deeper into the data, the customers who responded to this email were far less likely to transact. The average order value was half that of a different email with a lower open rate.

Conversion rates can be harder to measure, but are obviously the real sign of success.

(Cheeky plug: That’s why SparkPage always measures customer Journeys by their goals, rather than individual message response rates.)

Singular Focus

Once every few months we’ll spend some time identifying and removing Faux Metrics from our reporting. It’s a fairly simple exercise to conduct. Spend 15 mins thinking about the metrics your team reports on and ask if the decisions they help inform are very well correlated with the value you create for your customers.

I’d like to pretend that there’s a more complex framework or process there, but this is just one of those cases where asking the right question is more than half the battle.

When we started this exercise it was obvious that removing Faux Metrics would help prevent us getting sidetracked, but what wasn’t initially obvious is the focus it allows.

As Periscope noted, trying to Optimize DAU would bring them down the path of daily (irrelevant) push notifications or other hacks to get users opening the app, but not getting value.

Optimizing open rates leads to sensationalist subject lines. Optimizing for click through rate results in way too many calls-to-action per email.

Optimizing for conversions, however, encourages you to have a clear goal in every email you’re sending.

It lets you, as a manager, help ensure that everyone on the team is doing purposeful work with the aim of creating more value for your users.

At our company, although we still measure things like total customers and MRR, we now focus a lot more on “monthly engaged end-users”.

This metric shows us both how many users our customers have (our customers are B2C services) and how engaged they are.

This, we feel, is the closest we’ve got to measuring the total volume of value we’re creating in the market, and that’s the yardstick we want to measure our progress against.