A Belt of Measurement

This month’s blog post talks about how the main purpose of measurement is to help you to make better decisions.

I’m looking forward to November.  I know that must seem odd.  I’m looking forward to one of the bleakest and greyest months of the year.  I do have a reason.  Here’s why.

I’ve just scheduled my annual medical check-up for November 29th.  I’m healthy, and for most of my life I’ve been pretty slim, but somewhere along the way I started gaining a pound or two a year.  When I think back to my check-up three years ago, I weighed about 15 pounds more than I do today.  I suppose it was due to some combination of too many business trips, lunches and dinners, and too little exercise.  However it happened, when I walked into my doctor’s office that blustery November morning three years ago, I knew I was in trouble.

After exchanging our usual pleasantries and golfing stories, I stepped onto my doctor’s scale and weighed in at 184, which is a bit heavy for my height of just under 5’10”.  I was actually down a few pounds from my peak earlier in the year, yet that was still a new personal high on my doctor’s charts.  Ordinarily, I like setting new records, but not that time.

I went to my gym that same week and on their scale, I weighed 186.  On my scale at home I registered a more favourable 182.  So, to the question “How much does Rick weigh?”, I had three different answers.

I suppose I could have figured out the right answer by spending a few thousand dollars on an extraordinarily accurate industrial scale.  Then, I would have known my exact weight to the fourth decimal place, but that raises an important question.  Would that extra expense and extra precision about my weight have enabled me to make a better decision?

The decision I made was to seek out a nutritionist and to get to the gym more often.  Knowing that I weighed exactly 183.7428 pounds, or whatever it was, would have made no difference whatsoever to my decision.

The truth is, I knew I was in trouble even before I got on my doctor’s scale.  I had a leading indicator called my belt that had been telling me I was over some imaginary line as I couldn’t tighten my belt as much as I used to.  I already had the measurement tool I needed to make the right decision. I didn’t even need a scale.

There are a few lessons in this that apply nicely to marketing measurement:

• Think of marketing measurement as something that helps you to make better decisions. Before you overspend on sophisticated measurement tools and techniques, ask yourself if the additional expense and precision is likely to help you to make a better decision.  It’s about the decision, not precision.

• Look for leading indicators that reliably predict a more important number, like the way notches on your belt can indicate a trend in your weight.  For example, in most retail businesses a great leading indicator of profit is the average dollar value of each customer transaction.  Watching that metric will give you a pretty good feel for whether your marketing efforts are contributing to profits by attracting the right kind of customers and incenting the right kind of buying behaviour.

• The trend in a metric is more important than the number itself. Knowing my exact weight three years ago, or today, is not nearly as important as knowing that I’m down about 10%.  That change in the number tells me my strategy to eat better and get exercise is working, and that I should stick to my strategy.  That’s what you need to know about your marketing; what works and what doesn’t.  Do more of what works and less of what doesn’t.  Those are good decisions.

• Pick a scale and measure consistently. My doctor’s scale is probably pretty accurate, but it doesn’t really matter.  What matters is that we use the same scale each year and my check-up is in the morning, after fasting all night.  By measuring consistently, the numbers are meaningful.  We can track the changes and know if I’m making good decisions.

I’m looking forward to November 29th because I think I’ve moved the needle in the right direction since last year, at least that’s what my belt is telling me!