Business Statistics Importance Discussed By Steven Scott
When looking at most business procedures, it is statistical facts that determine true value. The managers that do not understand how important statistical analysis is are going to eventually make some pretty bad business decisions. According to Steven Scott statistician at Google, statistics have to be used in practically all facets of modern business if you want to have an edge over the competition.
Sampling stands out as a huge part of statistics in business. Statisticians have to take some information from smaller sample groups in order to apply to the larger target audience. Marketing specialists can come up with an idea, as an example. The belief is that the idea is going to generate some profit but we can never be sure that this is going to work. The marketers can test the idea by offering a service or a product to some customers. As test marketing programs are over, statisticians step in to figure out if the procedure is actually going to be a success in the future.
Unfortunately, sampling has one problem that should be discussed. The sample group basically needs to be large enough so that it represents the larger target audience. If you just sample 15 customers you do not get a good prediction. Also, demographics always have to be highly similar to the entire audience covered. When sample groups are made out of just one race of retirees, but the target audience is mostly made out of mixed race young adults, the results are not going to be adequate. Basically, no accurate prediction can be made.
The Work Of The Statistician
Statisticians can do many different things in modern business environments. They usually take marketing figures and then apply mathematics theories and probability theories with the purpose of predicting success for proposed marketing actions.
The problem is that managers often fail to properly plan for the sample group requests that are going to come from statisticians. When marketing departments want to run immediate tests, in most situations we see managers guessing community demographics. This makes the work of the statistician ineffective, with the results obtained being inaccurate. Marketing population demographics has to be properly gathered and always updated when it is changed. If this is always the case, fast tests can be performed and statisticians can come up with accurate results.
Statistical analysis accuracy will often seem to be uncanny for those that are not initiated. However, business statistics do standout as being vital for future growth. Business managers need to take this into account whenever maximum profitability is desired for enterprises.
Investing a part of the available budget in testing the potential results of a specific marketing campaign can so easily help save money in the long run though. This is because of the fact that the business would not actually put in money in campaigns that are not going to work. Contrary to what many managers think at the moment, most campaigns do fail because of not properly understanding the importance of statistics.