Metrics

Data has become an integral part of marketing decision making in the current business world. For this reason, any syllabus that trains a business executive is incomplete without a section in metrics. Metrics can be defined as “a measuring system that quantifies a trend, dynamic or characteristics.” 

William Thomson, a British Psychist, Mathematician and Engineer has explained about the need of metrics as:

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind: it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science.”

It is used in almost all disciplines to explain a process, findings and diagnoses. It provides a concrete base for what we communicate, which is really essential in working out a business plan.

Numerical Fluency is an essential skill for a business leader which helps in quantifying the financial risks and benefits of a business decision. As for this they must evaluate plans, explain variance, identify leverage points for improvements and judge performance in numerical terms.

Now, in order to explain the usefulness of Metrics, first we have to understand the difference between Data and Information and Knowledge. Data is a raw fact and itself does not tell anything unless and until manipulated in some way. Information is data that have some value compared to Data. When Information can be demonstrated using concrete evidences it gains some more value and becomes Knowledge. Hence for gathering these evidences metrics is used.

For example, to identify the best-selling brand we must know the percentage of stocks sold for the respective period of time. Currently various softwares are available that helps to transform information into visual representations such as Tableau software, www.tableau.com. Such visual representation aids in extracting messages from Information.