People often tell me there are things like ‘brand’ or ‘customer experience’ that are intangible and thus cannot be measured.”  We would argue that this is a completely false assumption and that there is no such thing as an “intangible.” Incidentally, ‘brand’ and ‘CX’ are rather easy to measure once you decompose them.

Typically, something is considered as “intangible” because the observer fails to recognize one of three measurement principles:

  • The concept of measurement
  • The object of measurement
  • The method of measurement

By concept of measurement we mean a reduction in uncertainty not an exact point estimate. The object of measurement requires some further analysis. That is, the thing being measured is not well defined. Take the case of ‘brand.”

In the case of “brand” or any other perceived intangible we first ask, “why do you care about it?” or “imagine two firms:  A and B, that are alike in every way except firm B has more ‘brand’; what would you notice differently.” After further dissection, the object of measurement may move from ‘brand’ to ‘revenue’.

The method of measurement simply refers to the variety of procedures for making a measurement, possibly by an observation. Believe it or not, many of the empirical observation methods are not well known.

Remember, you can measure anything – there is no such thing as an intangible. You should also take notice of some observations we (and many others) have made with respect to measurement:

  • Assume it’s been measured before.
  • You have more data than you think.
  • You need less data than you think.

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