Defining the Nature of Value in Data

Dr. Eric Reidenbach: No, I think you’re accurate. I think that there is a ton of data, and that’s why you need some overriding metric, if you will, or overriding paradigm such as a value paradigm which governs and directs you as to how you convert data into information.

The big breakthrough that Gale has made for marketers is the discovery of the power of value. And the company who can harness and identify, create, and deliver value is going to be the market share winner.

Now this opened a lot of eyes. Not all of them, unfortunately, but some. So now a lot of the data that is collected, and a lot of the information that is generated from that data, is in the nature of value, and the tradeoff between quality and price.

What are the CTQs that comprise quality? What is their relative importance? How do we use that information? There’s always, always that one final glitch in the whole process and that is after we’ve generated this information, how do we use it?

That, in essence, is where Six Sigma Marketing came from, because I was working with a big Cat dealer in Australia, and I was doing some customer value management measurement stuff for them, primarily focusing on competitive planning.

This guy took me aside and said, “How do we use this stuff in Six Sigma?” and I said, “Wow! That’s interesting.” So I sat down, and probably about six months later, I came up with the concept of Six Sigma Marketing, that I’ve detailed in that book “Six Sigma Marketing.”

It really does, it provides a paradigm for addressing what data do we collect, and what do we do with that data to transform it into information, and then how do we use that information to drive our competitive value proposition. It really focuses on the attention of the organization on value identification, value creation, and value delivery.

Joe: You think you can really define the Nature of Value without numbers? You really think statistical-wise you have to prove it out like a theorem or whatever?

Eric: I think it has to be quantified, Joe because we have to know which is more important than other things. For example, which CTQs are the most important CTQs? Otherwise, we end up perhaps spending a lot of money and time on trying to improve something that’s relatively unimportant to the marketplace.

I am a strong believer in that old adage of “if you can’t measure it, then you can’t manage it.” I think this is one of the things Six Sigma will bring to marketers, is this need to measure, measure, and measure.

Related Podcast and Transcription: The Nature of Value

About: Dr. Eric Reidenbach is the Director of the Six Sigma Marketing Institute. The Institute is one of the leading organizations and authorities of Six Sigma Marketing, a fact-based, disciplined approach to growing market share in targeted product/markets by providing superior value.

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