Stay away from these vanity metrics 🚨

Welcome to the 44th edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more

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1 million impressions | 300k views | 10,000 app installs.
Wow, the user penetration must be huge. Well, not really.

Turns out, all of us are stuck up chasing vanity metrics.
They make us feel better, but don’t really help.

If a metric doesn’t encourage an action, it’s a vanity metric.
Any metric that does not bring insight about the true performance in a way where it helps to take future decisions, is a vanity metric.

planview

Pick up your running shoes, because we’re to sprint away from vanity metrics that keeps you busy, but never really help.

1. Customer acquisition cost (CAC) 🤑
   Advertised: How much you spend on marketing on paid ads per user signup ?What it means: Every dollar spent on a user from serving an ad to them (reach cost) + the incentive (if a discount was being shown to them) + any other costs until the user does the activation event.
   
   

2. App Downloads 🔽
   Advertised: Number of people downloading your app
   What it means: App downloads alone mean nothing if you’re not checking the app uninstall rate, % of users who are active or % of users who will drive revenue. App download to a larger extent is a top funnel metric. It does not guarantee user stickiness or revenue.
   

3. Top keywords 🤔
   Advertised: The 5 keywords your website ranks for/ is aiming to rank
   What it means: Ever had your SEO team say - your organic traffic has increased by 265%? Increase in organic traffic sure is a good thing, but what does that mean? What matters is that did it lead to any sales, any core action item? Always check for the quality of the user.
   

4. Monthly active users (MAU) 👥
   Advertised: The number of unique users who use your app on a monthly basis
   What it means: MAU is the king of vanity metrics. A good analytical growth person will never study MAU in isolation. What we need to see is what these users are doing - are they performing any core actions, are they showing any intent? Global apps have now ventured into analysing weekly active (WAU) or hourly active (HAU) as per their need.
   

5. DAU/MAU 🎯
   Advertised: Unique daily active users VS monthly active
   What it means: Imagine your app is a document scanner. Would you still consider DAU/MAU to be a core metric? Would your goal not be average session per user or total sessions per user? DAU/MAU stands for user frequency, but not all apps demand frequency to be the only identifier of value generation for the user or for the business.
   

6. Cost per install (CPI) 🤑
   Advertised: The amount of money you spent in acquiring a new user

   What it means: Marketing (performance) teams can’t stop talking about how they’ve reduced their CPI or are planning to optimise on it. But who are these users? Are they active on D30? Did they perform any core action? As growth people, we need to collectively ditch talking about CPI and bring CPAI (active user) to the table.
   

Vanity metrics do more harm than good because they keep you occupied with numbers that don’t take you anywhere.

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