10 Things I Learned from Joanne: Lesson 2

Measures vs. Metrics

This is the second article in a series called 10 Things I Learned from Joanne. The first part was Each Level of the Model Must be Measurable. In the first lesson, I learned that each level of the marketing and sales model must be measurable. Her logic is that if you have a level in the model with no measurement, why bother with the level? I agree, wholeheartedly.

In this post, I’ll describe the difference between a measure and a metric. Let’s start with some definitions as outlined in our book, Intentional Marketing: A Systematic Approach to Optimizing Performance,

A measure is:
All numerical data that are a result of measuring or quantifying (page 160).

In contrast, a metric is:

Numerical data that are calculated from measures and are developed to show the extent of marketing and business success (page 160).

In the definition of a metric, we give additional information:

Metrics show relationships between measures and are often ratios (having a numerator and a denominator) that are associated with one or both of two qualities: they may track over time, and they show proportion to something else (page 160).

For those of you who know me as being rather slow and pigheaded, it may not come as a surprise that it took me a long time to understand the difference between the two words. To me, the words were interchangeable. I thought that the words were synonyms. In other words, the words meant the same thing. It took Joanne a few weeks, probably months, to get the difference into my thick skull.

Then one day I got it — I understood. Let me give you a helpful analogy. Imagine that you are going to your doctor’s office for an annual checkup. Before you see the doctor, the nurse will take a bunch of measurements: height, weight, pulse, blood pressure, temperature, etc.

Each of these is a static number. However, from these measurements, the nurse and the doctor can compare your measurements to previous visits where the same measurements were obtained. In addition, they can compare these measurements to healthy standards. For example, your temperature should be 37 degrees Centigrade (98.6 F). If your temperature is higher this could indicate that you have a fever which may need treatment. The treatment prescribed by the doctor is dependent on the cause of the elevated treatment. To develop the correct treatment, the doctor may do a detailed history and additional tests to determine the diagnosis. As part of the diagnosis, the doctor will often develop a differential diagnosis to rule out alternative causes for the elevated temperature. Eventually, the doctor will decide on the diagnosis and prescribe the correct treatment. Often it is more complicated than this but as a general rule, the medical team will use the format of diagnosis and then treatment.

In addition to specific measures of health, the medical team may look at related metrics. A good example of a metric from the perspective of health is the Body Mass Index (BMI). The BMI has 2 parts: a formula and an index. The formula is:

Body Mass Index is a simple calculation using a person’s height and weight. The formula is BMI = kg/m2 where kg is a person’s weight in kilograms and m2 is their height in metres squared.

The index is a scale where the results of the formula are plotted on a scale indicating various levels of health related to weight and height. Sometimes age is added as an additional factor. For example,

A BMI of 25.0 or more is overweight, while the healthy range is 18.5 to 24.9. BMI applies to most adults 18-65 years.

As an example, the use of diagnosis and then treatment by a medical team is also an excellent process for marketers to use. This is especially true when looking at levels and numbers in the Customer Acquisition Model (page 6). In the Intentional Marketing System, as described in our book, we devote an entire phase to this process called Phase 3 – Optimize Performance. The steps in this phase are:

Step 6 – Look Inside the Model (page 75)

Step 7 – Analyze the Numbers (page 85)

Step 8 – Actions to Optimize Performance (page 101)

I’ll leave this Phase for you to read in more detail when you buy the book.

What I want to do now is explain the beauty and genius of the Intentional Market System related to measures and metrics. Here it is. Are you ready?

By Tanya White

Let me backtrack slightly. If you recall from Lesson 1, there were 7 measures and 10 metrics. Here is the illustration:

What I learned from Joanne is that the Intentional Marketing System has magic. As a marketer, you only need to collect data for the 7 measures. The metrics are calculations.

Once you get this concept, life as a marketer becomes much easier.

Almost anyway. You still need to collect measures for each marketing channel but once you have designed the model and identified the sources for the measures life gets easier. And, of course, you still need to do the analysis. However, as you can see, collecting the measures and having the metrics automatically calculated is a huge leap forward.

Each month, assuming that is the period that you are looking at, all you need to do is collect 7 measures (times each marketing challenge) and add the measures to your model. Then, abracadabra, the metrics are calculated for you. This is a beautiful thing.

In summary, you can use the following steps right from our book:

Phase 2 – Build the Model (page 27)

Step 2 – Design the Model (page 29)

Step 3 – Collect the Measures (page 45)

Step 4 – Calculate the Metrics (page 55)

Step 5 – Generate a Marketing Statement (page 66)

Phase 3 – Optimize Performance (page 72)

Step 6 – Look Inside the Model (page 75)

Step 7 – Analyze the Numbers (page 85)

Step 8 – Actions to Optimize Performance (page 101)

Easy peasy!