An Important Distinction: Averages and Variation

Before ending into a discussion of the tools themselves, it is important to emphasize the distinction between two key characteristics of data. The first is average or the mean value of a specific variable. For example, managers are often interested in customer satisfaction scores. Let us assume that a firm collects data on satisfaction and some other attitudinal variables, each on a 7-point scale from 1000 of its customers. We find that most senior level managers and C-level executives are interested in the average values or means of the metrics they follow. In this case, for instance, managers are most likely to be interested in the average satisfaction score from the sample of 1000 customers. An average close to 6 or 7 will be treated fa....