Your client dashboard has fourteen metrics on it. You look at three - maybe. You built your entire deterministic sense of “client success” around 1 or 2 core numbers, and you highlight that metric relentlessly in your client reporting.
Guess what? That number is almost certainly lying to you.
It’s not because you aren’t measuring it right, but rather because it’s a number that’s easy for you to measure and it probably doesn’t really connect to an outcome that matters to your client. You and your client may have actually AGREED to that number…and maybe even set a goal for that number.
So you report on it, maybe even generate a cute graph showing improvement over time, and ship off a celebratory message when you hit the target goal way ahead of schedule.
Then, your client sends you the dreaded “Hey, can you send me a copy of the contract because I just want to make sure that we're all aligned?” email, and two weeks later, they are gone - poof!
Seriously, WTF?!? You hit the agreed upon metric (ahead of schedule, even!) and they have the audacity to cancel!
Welcome to the world of Vanity (or maybe even better Vacuous) Metrics!
A Vanity Metric Is Any Metric That You Can Measure, But It Doesn’t F*cking Matter…
What actually makes a metric a vanity metric?
A vanity metric is any “KPI” you can improve without your client's business getting healthier. Leads, impressions, followers, sessions, open rates - every single one of those can go up or down in a month and revenue (or profit, or whatever the client REALLY wants) doesn’t follow suit.
Quick story…okay?
A million years ago, my SEO agency, SpinShark, was working with one of the top two retailers in the hobby space. They were a totally fantastic client - but one day the CEO decided that being ranked #1 for the top volume keyword in their category was essential. I pushed back and said “Uh…that’s not going to make a huge difference because it’s low intent…”
They insisted, and three and a half months later, we had the top organic ranking for that incredibly high-volume, low-intent keyword…
Traffic spiked! Time on site spiked! Page depth increased! Return traffic increased!
Guess what didn’t spike…
- Sales
- Catalog Requests
- Email Signups
- Sales Through The Call Center
in general, being more visible than your competitors is good. but that desire to rank at the top of Google for a high traffic, low intent keyword was the very definition of a vanity metric (and in this case, it was almost certainly a vacuous metric).
Luckily, because they were great clients, they didn't churn. They remembered when I pushed back and said that's not going to make a difference…and that pushing on that keyword was against doctor’s orders.
Does the “vanity metric” idea make sense now? It’s generally something that's easy to measure, can show progress over time, and at the end of the day, it doesn't fucking matter.
Isn't revenue the real metric, then?
No, it isn’t.
Not what you were expecting me to say, right? It sounds cuckoo, but here’s something that you’ve got to keep at the forefront of your mind - both for your clients and your agency. Revenue is a lagging indicator. It’s an historic fact.
Revenue is the output of a hundred processes and variables that already finished happening. You can’t really learn anything that’s immediately actionable from a revenue result. It’s just a reflection of the stuff that happened BEFORE you tallied up the sales.
So if revenue isn’t the big honkin’ metric that we should be thinking about, WTF is?
What you want is a LEADING METRIC…
A leading Metric is something that is either causal for that rear view metric, or it's so tightly correlated with the rear view metric that you can track increases in this leading metric that inevitably drive the big revenue metric.
A leading metric is something you can act on today that you have real reason to believe produces the result later. And typically it has a shorter interval than a big metric like revenue.
Revenue tells you how last quarter went, whereas a leading metric points you towards actions that you can take today and see improvement quickly.
The leading metric only earns its spot on the dashboard if it points at the outcome the client is chasing, not just the result you happen to be good at producing.
The Hit, Miss, Blow Past Test
How do I test if the metric that we are reporting on is real and relevant?
You just ask 3 questions (and either your client has past data you can model, or you pull out the connections during your first couple of months on your engagement.)
The 3 Big Questions:
- What happens if you hit the metric?
- What happens if you miss the metric?
- What happens if you go screaming past it?
If there is no correlation or causality to a lagging indicator, then it's not a useful metric. A real metric is something that has a cascade of results that happen after it. A vanity metric just makes your cute little graph go up and to the right, and it doesn't have an impact on anything else but itself.
What client number you are currently obsessing over? You’ve got to get your client to dig deep so you can all align:
- Does hitting this number have a material impact on the success or viability of your client?
- Is this a metric that they are graded on? (BTW, super cool to know what triggers your regular POC’s annual bonus - if you keep on blowing past that number, they are going to love your FOREVER!)
- Is this a metric that is important to their boss or board of directors?
- Is the impact of this metric clear? (Can you point to the dominoes that fall when it changes?)
It totally groovy to be mildly impertinent when you are trying to dig up the real METRICS THAT MATTER™ (that’s not really trademarked, but maybe I ought to…So don't rush out and do it before I get to it). You aren’t being nosy, you are creating alignment and connection between your service and the things that truly matter to their business. Ideally, you have a really good sense of this when you onboard a client, but sometimes that's not really possible
The initial discussion around METRICS THAT MATTER™ belongs in the sales & discovery process. BTW, here are some discovery call questions that help surface what actually matters to a prospect.
Pro Tip:
Don’t contractually commit to a particular KPI or metric in your statement of work, because you don't want to be locked into something that you later discover is wholly irrelevant. A short clause like “tracked metrics and reporting elements will be reviewed & mutually agreed upon on a quarterly basis” (or something similar…)
"More Leads" or “Higher ROAS” Are Shortcuts
Why do agencies keep chasing simple numbers as the top metric?
Because simple numbers are easy to count & typically, they are self contained. Stuff like profit or “lead quality” is complicated. Prospects and clients are really fond of these numbers, too, for the same reason. It’s a proxy - if we track this discrete number, everything else will fall into place, right?
In my agency coaching business, agency owners constantly say they want more leads. Usually, what they want is more profit.
More leads is just the shortcut they took to get there, on the theory that more leads means more sales means more profit.
That chain sounds airtight right up until you check whether it is true for this client, in this business, right now. Usually a simple number like “leads” doesn't have a clear and direct connection to profit.
Here’s a little gem that I use to illustrate the point:
Every privately owned company in the world would trade zero revenue growth for 50% profit growth. Nobody at a private company cares that you didn't grow, as long as they are making twice as much money.
Every time share that idea with someone, they almost immediately drop the idea that they need more leads. They realize that they have to unpack all of the things that go into profit…
Your agency does the same thing to itself, by the way. The only sales metric that actually matters is this exact argument pointed at your own pipeline instead of theirs.
Does skipping the tracking of a simple, discrete number makes reporting and KPI tracking harder?
You betcha.
But does it make your relationship with your clients better and your service goals more directly aligned with the things they value the most?
Abso-fucking-lutely.
Cheap KPIs Are Like Cotton Candy.
Silly, Meaningless Metrics That Always Show Improvement Are DELICIOUS…but Rarely NUTRITIOUS
I don’t think I’ve ever met anyone who doesn't love cotton candy. Cotton candy is really delicious. It’s almost impossible to eat cotton candy and not smile. You'll probably giggle when it gets all over your hands and, in my case, anyways, sticks to my beard.
But that’s a transitory delight.
Have you ever tried to make a meal out of cotton candy? I'm the parent of five, and I know that at least 60% of my kids have tried…
Their “cotton candy as a meal replacement” success rate is zero. After all, you can't really eat enough cotton candy to make yourself full. And in the pursuit of such a noble goal, you will almost certainly start to feel nauseous.
The real metrics & KPIs that you need to be tracking and obsessing over are more like broccoli. It tastes good (IMHO), but it's not really fun to eat. It requires more preparation, more chewing, and rarely, if ever, get stuck in one's beard.
But you could probably survive for a month eating nothing but broccoli because it gives you the downstream things that you need in order to live… It’s got Vitamin C, Vitamin K, folates, fiber, potassium & calcium. All of that stuff is the outcome of maximizing your broccoli intake…
Cotton candy is the vanity metric that leads to nausea, whereas broccoli is the leading metric to sustenance and good health.
Your cotton candy dashboard says you are winning. Your client’s P&L is starting to get a little nauseous. I’ve never seen a nauseous client ask their agency for broccoli - generally speaking, clients assume you know what they need to eat in order to survive.
They just start taking calls from other agencies who will tell them that they need broccoli.
What Are The METRICS THAT MATTER™?
Sadly, there’s not a standard list…every prospect and every client has a unique set of variables that determine their success. It’s your job during the sales and discovery process is to get as good a handle on those variables as you can.
The discovery & sales process isn't so you can talk about your awards or your origin story or really anything about you. Discovery is there to pull information out of your prospect’s actual business & market realities. Sales only happens when you have enough understanding to be able to say that, using our approach, we are confident that things are gonna get better. You have to understand the real business motivation behind the metric. Once you understand the equation that matters, the leading indicators usually emerge in high definition.
If you’ve read this far, you know that the true leading indicators are almost never the easy ones from Meta Business Manager or Google Analytics.
Pushing Back On A Bad Metric Is The Job
Isn’t the client always right?
Nope. In fact, I’d say that most clients are giving you that cotton candy metric because they've found it's the only one that agencies can work with.
But your job is to lead the client to where they NEED to be (even if that is different than what they are asking for…)
It’s your job to help your prospect to understand, for instance, that revenue is the outcome of past actions, and that the two of you need to find the leading metrics that actually drive it.
That’s the real work of an agency - to uncover the leading metrics that impact meaningful business performance and leverage their skills, process, and understanding to maximize the leading and trailing outcomes.
Clients almost never fight you on this. They usually take a deep breath and relax because somebody finally took their business seriously.
Wait - so now I am selling leading metrics rather than deliverables & process?
Yup.
For most of the pre-pandemic 2000s, an agency could show up, share their process for creating deliverables, and the connection between deliverables and outcomes was taken for granted.
But then the real world started to show up and make things harder. Clients were suddenly faced with the concept that growth was no longer inevitable. That meant they started questioning the “proprietary process” and bullet-proof “best practices” that agencies were selling.
All that “process” & “practice” mumbo-jumbo were really based around hitting discrete KPIs that were easy to measure. And in the go-go days of nearly non-stop economic and digital marketing growth, those KPIs were lightly, but defensibly, correlated to positive business impact.
But the days of wine and roses are over… nobody cares about your search impressions or email open rates or page load speeds unless they can see a bright line between that discrete, easy-to-measure metric and their business goals.
Simple pitches based on cotton candy metrics do absolutely nothing to tell a prospect about what it's like to work with you and the impact you can have on a business. If your case studies and proposals read like a laundry list of deliverables or a static set of steps, you aren’t selling business impact or MTMs (Metrics That Matter) . You are selling a list of tasks that you will complete - regardless if that makes any difference for your client.
Do This Right Freakin’ Now…
Run the Hit/Miss/Blow Past test on your own business
Pick the metric you track for your own agency. Run the test.
If you can’t find the correlation or causality in your own data? I am 100% sure you aren't doing it for your clients. If you are tracking a vanity number for your own business, How much trust do you think you are building with your clients?
Here’s Your Extra Credit Homework:
- Ask your top three clients what’s their MTM or the thing behind the metrics that they value. Find out what changes matter in their business.
- Write the answer down in their words, not yours.
- Figure out, collaboratively, ALL of the variables that go into the changes that matter.
I bet that you aren’t tracking, reporting on or even considering most of them. That’s the point of asking.
Now you and your clients can work together to identify which variables are impacted by your actions, what variables Respond exclusively to their actions, and now you've got a reporting structure and a true missional sense of alignment to focus on METRICS THAT MATTER.
That’s the real difference in an agency/client relationship that lasts and is truly a partnership versus the ones that churn fast and hard.
Go deeper: The metric argument is won or lost in discovery, before anyone agrees to be measured by it. The Agency Discovery Call Playbook