In Is Your Website Driving Away Your Best Folks? I warned of the danger relying on ‘vanity metrics’ like ‘page views’ or ‘time on site’.

In fact, the use of ‘vanity metrics’ is problematic in our trade far beyond the online world. So, I thought it would be helpful to cover the ‘metrics’ topic in more detail. Today ‘vanity metrics’; tomorrow Metrics that Matter.

If you truly believe that fundraising is mostly ‘art’, not ‘science’, then stop reading. Chances are you’re going to neither understand nor care which metrics matter in fundraising.

It’s fashionable these days for many nonprofit fundraisers and their consultants to claim they’re ‘data-driven’. Problem is, most focus on the ‘data’ part of the slogan, but few understand the requirements of the second word — ‘driven’.

In a their book, Lean Analytics, authors Alistair Croll and Benjamin Yoskovitz argue: “If you have a piece of data on which you cannot act, it’s a vanity metric. If all it does is stroke your ego, it won’t help. If you’re aiming for success you need your data and metrics to inform, to guide … to help you decide on a course of action.”

Although Lean Analytics was written mostly to guide entrepreneurs on start up businesses, it got me thinking about how many of the metrics commonly used in our sector are really little more than what the authors call ‘vanity metrics’ — good for the ego, fodder for the next board meeting or next conference, but really not useful for action leading to improvement of the bottom line.

If the metric, and the data behind it, doesn’t trigger the question — “What will I do differently based on this information?” — you probably should not be spending time or money collecting and analyzing it.

In essence, part of the problem with ‘vanity metrics’ is that nobody does anything with them. But more importantly, and dangerously, they are often used to drive absolutely bad decisions. For example: “If I put more spend into online search advertising, it’s a quick, guaranteed way to drive up the number of website visitors.” A meaningless strategy. A meaningless result!

[For greater and more detailed information on the importance of data in creating a donor-centric organization check out the Agitator review of Steve MacLaughlin’s fundraising classic  The Data Driven Nonprofit.]

Here are my picks for ‘vanity metrics’ of which fundraisers should be beware, both in the online and offline realms:

Benchmarking. In my ‘nobody does anything with the data’ category, the number one ‘vanity metric’ is benchmarking. While I applaud Chuck Longfield and Blackbaud’s Target Analytics for creating and propagating the concept, my problem is that individual organizations seldom use it to question and guide new actions. Instead, if they’re ahead of the benchmark in their sector, they use that stat as proud justification for doing nothing except boasting to their board or CEO. If ever a brilliant metric concept were mis-applied for the sake of vanity, it’s this.

Number of Hits. A fossil from the early days of the web. If you have a big site with many elements there will be lots and lots of hits. So what? Better to count the actual number of people involved.

Number of Page Views. Just a tiny bit better than ‘hits’. Unless you’ve discovered how to raise money on page views, this is a metric without actionable value.

Number of Visits or Number of Unique Visitors. Sheds no light on why they visited, why they kept sticking around or why they left. Pretty much worthless.

Number of ‘Likes’, ‘Friends’, ‘Followers’. Simply a popularity contest. Only if you know how many followers will take action when you make a request do you really have an actionable metric. Most organizations don’t use it this way.

Number of Email Addresses on File. The issue isn’t size of the list, although it may impress the CEO or board; the valuable and actionable metric is how many folks will open their emails AND take action.

Acquisition Response Rates. Amazing the number of direct response fundraisers who measure ‘success’ or ‘failure’ by response rates, as in “Our rival gets only a .65% rate and we get 1.2%”! Pretty much worthless because it tells you only how a specific campaign went, and raises almost no “what should I do differently” questions, other than “what should I do differently to get the response rate up?”

I certainly realize that some readers are growing angry over these remarks. But I find the whole concept of ‘acquisition metrics’ comical, reflective of a singular obsession with NOTHING BUT campaign metrics and various manipulations that produce only variations of the same numbers. Columns and columns of redundant, non-useful metrics — created by just switching around the numerator and denominator on response rate, average gift, average cost, total cost and that magic output … ‘cost to raise a dollar’.

Why not a set of useful metrics that could be done on the same report that would be forward looking and remind the report reader of what the goal truly is?

Stay tuned. Tomorrow: metrics that matter.

Roger

P.S.  A reminder to Agitator readers of the free Agitator/DonorVoice Webinar on Thursday June 29th.

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