A vanity metric looks favorable and is easy to celebrate but usually contributes little actionable insight. It can make organizational performance appear healthier than it is. section 7.3.1
Vanity metrics commonly arise when:
- A cumulative value, such as total users or all-time revenue, continually increases while hiding slowing growth or deteriorating performance. section 7.3.1
- Stakeholders celebrate a positive-looking chart without connecting it to goals, actions, or strategy. section 7.3.1
- An aggregate presentation masks important changes in the underlying data. section 7.3.1
Cumulative users versus growth rate
A cumulative user count may rise every month even as the growth rate shrinks. Pairing it with an incremental measure, such as month-over-month percentage change, reveals the actual trajectory. section 7.3.1
Table 7.5 Examples of cumulative metrics and more appropriate incremental alternatives
|
Cumulative metric
|
Incremental metric
|
|---|---|
|
Total customers by month
|
Percent change in total customers by month
|
|
All-time revenue
|
Revenue vs. expenses by month
|
Compare cumulative measures with more decision-relevant incremental alternatives, including customer growth rates and monthly revenue-versus-expense comparisons. section 7.3.1
