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December 7, 2015

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6 principles of good analytical thinking for Brand Leaders | Part Two

Principle #2: Absolute numbers by themselves are useless. Always find comparisons.

Only when given a relative nature to something important do you find the data break that tells a story. Is 50 degrees Fahrenheit warm or cold? If it’s Ottawa Canada and it’s December 24th it HOT and it is front page news. If it’s Los Angeles on June 5th, it is COLD and front page news.

Back in the early 1900s, there was a famous baseball player whose name was Frank “Home Run” Baker. Yet, oddly enough, the most Home Runs he ever hit in a year was 12. You might think his name is sarcastic or wonder how the heck can he get the nickname “Home Run”. Because in a relative dead ball era of baseball, he won the home run crown four consecutive seasons starting in 1911 with 11, 10, 12 and 9 home runs. Yes Babe Ruth would hit 54 and 60 home runs less than 10 years later but the ball had changed. The absolute number of home runs does not matter–because relatively speaking, Frank Baker was the best home run hitter of his generation and deserves to be called “Home Run” Baker.

Only when given a relative nature to something important do you find the data break that tells a story. You have to ground the data with a comparison, whether that’s versus prior periods, competitors, norms or the category. Every time you talk about a number, you have to talk about in relative terms—comparing it to something that is grounded: vs last year, vs last month, vs another brand, vs norm or vs England’s share. Is it up down, or flat? Never give a number without a relative nature—or your listener will not have a clue.