Actionable metrics and vanity metrics

Hi all again,

In one of the previous post, I introduced the main attributes that a good metric has to have. One of these properties talks about that metrics have to trigger actions.

A metric that doesn't give the chance to perform an action to change your business or your project is not a valid metric. It's what in the Lean Startup framework is known as Vanity Metric. 

In other other hand, an Actionable Metric gives you valuable information about how good or bad things are going and, most important thing, enables you to change or do something to improve.

At the end, metrics are there to inform, guide and improve your business or project and should help you to make better decisions.

Therefore, you have to bear in mind always the following questions when you analyze one metric:

How this metric is helping my business?

Based on this metric, how can I change my strategy?

If you are not able to answer these questions, most likely you have in front of you a vanity metric.

Actionable metrics are not magic. They give you valuable information but don't tell you what to do. Your experience and your business knowledge will provide this kind of intuition to know what to do. The actionable metrics' importance is that you make decisions based on the information that they provide.

Some metrics can be vanity or actionable metrics depending on your business model.

For instance, let's talk about the number of visits to your website. If your business is a e-commerce website, do you think that to have a high number of visits will give you a profitable business? Taking into account that it's better to have visits than the opposite, I'd say that your actionable metrics will be related to your conversion rate, repeat purchases, transaction sizes and revenues per customer. The rest of the metrics will be closer to vanity than actionable.

But if your business model is blog page where the revenues are related to your advertisements, to have a high number of visits most likely will give you more incomes. If you are not reaching acceptable visit levels, this metric will drive you to have another attraction strategy. 

Finishing this post, I want to add an example about metrics related to Agile and Project Management. What do you think about Story Points? Do you think Story Points are vanity or actionable metrics? I will give my opinion in my next post...

Thanks for reading 😏

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