Wednesday, October 04, 2006

Moneyball: The ultimate in being data-driven

Why is this book important to marketing?

Usual reasons include:
Illustrative use of information to run a business; it does.
A good read anyway; it is.

Key point: Measure that which causes success. It isn't always the stats (dare I say Key Performance Indicators) of conventional wisdom that relate to success. For instance while 'batting average' may raise the payroll it has little to do with understanding whether a team produces more runs than its opponent. Unheralded metrics like 'base-on-balls' do better.

It is a story about using the specific metrics that relate to game-day performance, as ultimately measured by W-L, to guide investment in players. Its even spawned its own discipline "sabermetrics" loosely defined as the objective search for what works. So when building a Marketing Box Score, make sure to include those metrics that actually relate to the objective --- financial performance.

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