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It goes without saying that data is a “key “information to judge our business on. Although, business has to be structured and organized in order for it to be successful in a long run. While there are different types and sources of data that are crucial for a business: from sales reports to KPIs reports and client information, it is our job as managers and analysists to be able to read and interpret the data correctly and use it to make decisions for our business. Since we have data constantly coming in from different places, we have to keep it organized in order for it to make sense for us or even our teams. This is where dimensions, measures and hierarchies come into place.

What is a dimension?

Dimension is a way for us to see a product performance over time. It is crucial in business since it lets us as marketers or business owners see what items are performing and what items are not successful and be able to course correct the situation before our business starts losing money. For example, if we see that our 12-pack soda is performing better than our single soda cans maybe we should utilize promotions to drive our sales or maybe we should learn what type of customers like single cans of soda and try to outreach more of them to improve our sales. The only way we will be able to know that this is a problem though is through looking at our dimensions over time. 

What is a measure?

A measure is a numeric value of the dimension. While dimension is more of a descriptive metric, a measure actually gives us a reference point to be able to judge the dimensions. Some of the key examples of dimensions are revenue, cost, quantity. We cannot say our business is not performing well and expect that to cover all the basis. We need to know what the problem is: are we selling less items? Did we lower the price?  Are we spending more money to make the goods then we used to? These are all the questions we can answer by simply glancing at the measures. 

What is a hierarchy?

Hierarchy is a breakdown of all the data that is given to us by the measures. The data in hierarchies is organized and presented in the format that is easy to read and interpret by the business owners. By using hierarchies and properly filtering the data we are able to analyze a specific period of time for a specific region in a specific category. For example: if we have the yearly sales of our company in all the categories and all the states in the USA, we are able to figure out the total sales in the office department in Western region by simply grouping the states into regions and filtering the departments to see the office department only. We can also perform some easy calculations and find out the $ share of a certain region in a certain category based on total sales using a formula:

$ share = region sales $/ total sales $

For example: if overall the company sell $500,000 worth of product but central region only sells $150,000 we would use the formula 

$ share = region sales $/ total sales $

$ share = $150,000 / $ 500,000

$ share = 30%

As we can already tell, data hierarchies can be used in a lot of different ways therefore it is crucial to understand it and know how to operate it correctly to be able to take advantage of all the information available about our business.  

How do companies utilize data hierarchies on a daily basis? Let’s take a look at Ralph Lauren.

As we all know Ralph Lauren is a multi-billion $ company that has been around for several decades. This brand is popular not only in the US, but also in countries of Asia, Europe and Africa. Ralph Lauren has been working on brand elevation therefore the company has been trying to make its customers feel special and appreciated. Every month the company sends out an outreach list with the top 500 customers. On a store level our concierge team reaches out to the people from the list based on their preferred method of communication and lets them know about the items they are interested in (the information can be found in the outreach list). This liA screenshot of a computer
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This list also provides us with the customers spendings as well as their purchase history per department (man’s, woman’s, kids or big&tall). The report also provides us with the last date of visit for each customer which makes outreaching easy and more personable. The outreach list is a great example of hierarchy of data since we can sort it and make additional calculations based on it. For example: having the customers $ spent in the store we can come up with our overall store concierge sales by simply adding up all the customers’ $ spent. By looking at customers’ addresses we are able to figure out whether we have more locals or tourists who are interested in out concierge services.   

Conclusion

This is just one of the examples how the hierarchies can be utilized to analyze data and learn about business, although, hierarchies provide us with endless opportunities and knowledge. It is our task as marketing leaders or managers to be able to analyze the data given to us and use it to make the best decisions for our business. Overall, data analysis is an important part of running the business since if we do not know who our customers are, what they are buying and how our business is performing, we are setting ourselves as leaders for failure in a long run. 

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