Thursday, 19 July 2007

Marketing Metrics 1 of 3

Business guru's Norton and Kaplan encourage organisations to realise that 'what you measure is what you get' , by which they mean that if you put something on the management agenda it becomes a focus of attention and that by measuring it over time you can spot the need for intervention. Their 'buzz phrase' is sometimes stated as 'what gets measured gets better'

What often gets lost in the wash however are the underlying assumptions that guide the selection of what 'thing's' should be measured and how this should be done. Just witness the impact of 'measurement mentality' on the UK health service and educational sector.

Very broadly speaking, if you operate from a 'management is an objective science' point of view then you assume that there is a postive correlation between the amount of detail you collect and your 'understanding' of what's going off. There is a world 'out there' to be discovered (Postivist epistemology). Whereas if you operate from a 'management is a subjective competence' point of view things are less hard and fast and perceptions and interpretations of the world 'in here' dominate your point of view (Interpretivist/ hermeneutic epistemology). You might also see this as a division between a 'modern' and 'post-modern'(yuck) perspective. If you like Ken Wilber then you will transcend and include both of these views :) - yellow meme baby!!

OK, - so what I hear you say. Well, the reason I mention this is because 'where you sit affects what you see' Let's take Google analytics as an example. Somebody somewhere has decided what they think determines 'success' for a web-site/ blog and then decided these are the things that 'should be' measured and the things that 'can be' measured by remote technical analytics programmes. Now this is exactly the same situation that I managed in the gaming industry wherebye 'machines' collected data about anything that could be pressed or selected in the use of the product / game. The belief was that this constitued uncontaminated hard facts about useage and that design and management decisions could be safely taken off the back of it. WRONG. a significant chunk of information about 'how' choices were made in the mind of the user was lost and also 'how' interpretations and thus 'assumptions' of the data by designers were used to guide design. Example - lets imagine that we have seen that 'feature' x is only used 2% of the tme, this seems like a good reason to ditch it. Ok - but have you considered the impact of 'utility in non-use' in the provision of user choice perceptions and their sense of control??

So, when you see a set of measures, you are getting a very good view of what is on somebody's 'mental map'. You are getting a representation of their Ontology The stuff that they regard as 'noteworthy'. How does this work? Well. in this domestic example there might be arguments over the untidy kitchen. My measures of 'tidy' are much more forgiving than the bio-hazard standards of my partner -lol I don't 'see' clean pans stacked on the worksurface as 'untidy' whereas for my partner it indicates total chaos.

This is not to argue against collecting lots of detail, just to say that it pays to be more self aware of the the processes we use when we decide what to measure, how to measure it and what we regard as a warranted belief about 'the world' as a result.

And so it should be no wonder that the the subject of Marketing Measurement is high on the agenda. Spooky - let's measure if we are good at measuring!!!

Measurement – Marketing’s Hot New Topic?

Michael Uncles (2005) comments that “everywhere you look marketers are talking about metrics” with the Marketing Science Institute (2004) listing the measurement of marketing activity as a key concern of contemporary management. Increasingly marketers (and their colleagues in other functions) are addressing themselves to marketing’s contribution to share holder value (Doyle 2000). This is against a management backcloth of general interest in performance measurement since the 1950s ranging from the financially driven Du Pont Ratio set, Keegan Eiler Jones’s cost/ non cost, internal/external matrix, Wang Laboratories Strategic Measurement and Reporting Technique, Fitzgerald’s Competitiveness/ Quality dimensions, through to Norton and Kaplan’s Balanced Scorecard, and onto continuous improvement processes such as the European Foundation for Quality Management’s (EQFM), Business Excellence Model, and it’s American counterpart the Baldridge Quality Award. Importantly two key threads run through contemporary approaches to measurement selection and use. The first is ‘balance’, uni-dimensional measures are limited and un-helpful, and the second is ensuring ‘stakeholder value’ (customers / employees) without which the ability to create shareholder value will be limited.

What are we going to measure?
At the onset it is worth recognising that each business is unique and pitfalls await the manager who unthinkingly selects and deploys generic measures without being clear on their purpose and relevance to their specific situation. Measures that help an insurance business run successfully will not necessarily be appropriate for retail or the bio-chemical industry. One size does not fit all.

You would of course, be very gullible not to be aware of this stuff...

Metrics 2
Metrics 3

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