- 1.1 What Is a Metric?
- 1.2 Why Do You Need Metrics?
- 1.3 Marketing Metrics: Opportunities, Performance, and Accountability
- 1.4 Choosing the Right Numbers
- 1.5 What Are We Measuring?
- 1.6 Value of Information
- 1.7 Mastering Metrics
- 1.8 Where Are the "Top Ten" Metrics?
- 1.9 What Is New in the Fourth Edition?
- 1.10 New Developments in the World of Marketing Metrics
This chapter is from the book
This chapter is from the book
This chapter is from the book
1.2 Why Do You Need Metrics?
“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.”—Lord Kelvin, Popular Lectures and Addresses (1891–1894)2
Lord Kelvin, a British physicist and the manager in charge of laying the first successful transatlantic cable, was one of history’s great advocates for quantitative investigation. In his day, however, mathematical rigor had not yet spread widely beyond the worlds of science, engineering, and finance. Much has changed since then.
Today, numeric fluency is a crucial skill for every business leader. Managers must quantify market opportunities and competitive threats. They must justify the financial risks and benefits of their decisions. They must evaluate plans, explain variances, judge performance, and identify leverage points for improvement—all in numeric terms. These responsibilities require a strong command of measurements and of the systems and formulas that generate them. In short, they require metrics.
Managers must select, calculate, and explain key business metrics. They must understand how each is constructed and how to use it in decision making. Consider the following, more recent quotes from management experts: