Persistence diagrams (PDs) are used as signatures of point cloud data. Two clouds of points can be compared using the bottleneck distance \(\textrm{d}_\textrm{B}\) between their PDs. A potential drawback of this pipeline is that point clouds sampled from topologically similar manifolds can have arbitrarily large \(\textrm{d}_\textrm{B}\) when there is a large scaling between them. This situation is typical in dimension reduction frameworks. We define, and study properties of, a new scale-invariant distance between PDs termed normalized bottleneck distance, \(\textrm{d}_\textrm{N}\) . In defining \(\textrm{d}_\textrm{N}\) , we develop a broader framework called metric decomposition for comparing finite metric spaces of equal cardinality with a bijection. We utilize metric decomposition to prove a stability result for \(\textrm{d}_\textrm{N}\) by deriving an explicit bound on the distortion of the bijective map. We then study two popular dimension reduction techniques, Johnson–Lindenstrauss (JL) projections and metric multidimensional scaling (mMDS), and a third class of general biLipschitz mappings. We provide new bounds on how well these dimension reduction techniques preserve homology with respect to \(\textrm{d}_\textrm{N}\) . For a JL map \(f:X \rightarrow f(X)\) , we show that \(\textrm{d}_\textrm{N}({\text {dgm}}(X),{\text {dgm}}(f(X))) < \epsilon \) where \({\text {dgm}}(X)\) is the Vietoris–Rips PD of X, and pairwise distances are preserved by f up to the tolerance \(0< \epsilon < 1\) . For mMDS, we present new bounds for \(\textrm{d}_\textrm{B}\) and \(\textrm{d}_\textrm{N}\) between PDs of X and its projection in terms of the eigenvalues of the covariance matrix. And for k-biLipschitz maps, we show that \(\textrm{d}_\textrm{N}\) is bounded by the product of \((k^2-1)/k\) and the ratio of diameters of X and f(X). Finally, we use computational experiments to demonstrate the increased effectiveness of using the normalized bottleneck distance for clustering sets of point clouds sampled from different shapes.