December 24, 2020 5 min read
Opinions expressed by Entrepreneur contributors are their own.
If you run a business, you are likely aware of the importance of data. Nearly every company out there utilizes data to make decisions. Some companies have a heavy focus on the quantitative side, while others spend their energy collecting and analyzing qualitative data. One thing we can all agree on, however, is that data has the power to transform your business into a results-driven, successful brand.
Unfortunately, in all the talk about the importance of data, many brands don’t ensure they are getting the full picture. It’s an all-too-common mistake to focus on only half the data. Usually, that means focusing on either the quantitative or the qualitative side.
If you want to see growth, profit, and increased brand awareness, it’s essential to look at both sides of data analysis. Data is an excellent resource in driving results, but your results will be limited if you don’t look at multiple angles.
Related: Why Your Startup Needs Data Science
1. Quantitative data is a powerful tool
Big data and quantitative data analysis are some of the most frequently discussed marketing tools of the modern business era. A number of wildly successful companies built their business on the numbers, calculations, and algorithms of quantitative data analysis.
In fact, quantitative data analysis is so common that it’s likely rare that you’ll interact with a brand that isn’t utilizing it. One of those companies that used this type of data analysis to achieve massive success is Netflix.
Netflix collects large amounts of information from its hundreds of millions of subscribers. The company collects data on things like time and date a user watches shows, types of shows a user watches, and length of time spent watching. This data is used to create specific recommendations for users as well as customized advertisements and previews for new content.
This quantitative data analysis has led Netflix to an astounding 93 percent customer retention rate. The data-driven customer recommendation system accounts for over 80 percent of streamed content. With a worth of over 100 billion dollars, Netflix is one of the highest valued brands in the world. Numbers like these are only made possible by quantitative data.
Quantitative data opens up major possibilities for your company. Tools like regression analysis, simulations, and hypothesis testing will show you patterns that you may not have seen otherwise. You can use this information to pinpoint areas where your business can function more optimally.
With mathematical modeling, you’ll be able to make decisions with more confidence because the numbers can show you the likelihood of a number of possible outcomes. There’s no reason you need to rely solely on your business intuition these days. Every successful brand should be using quantitative data if they want to be able to compete in today’s marketplace.
2. Qualitative data goes beyond what quantitative data can do
While quantitative data analysis is all the rage right now, it’s a huge mistake to only focus on that and forget about qualitative data. Your customers are humans and numbers can’t tell you everything about humans.
As Dana Liberty of data analytics company Sisense, puts it, “As data is produced from a growing array of sources, quantitative data may be as little as 20 percent of all the data available to most organizations. If you focus your efforts entirely on quantitative data, you’ll overlook a huge amount of valuable information, and your insights and decision-making could become distorted as a result. You need a solution that can access and analyze the other 80 percent.”
It’s essential to not ignore those other sources of data simply because it doesn’t come in the form of numbers. Qualitative data reveals essential insights into how customers feel about your products and your brand. This information is critical for understanding how to reach people most effectively and achieve success with your company.
Qualitative data analysis includes techniques like narrative analysis, surveys, interviews, and user feedback. Using these tools will enable you to understand perceptions of your brand among not just customers, but also stakeholders and the general public who could be potential customers.
Related: Why Data Analytics Can Help Drive Sales for Your Business
3. Don’t underestimate the power of using data to its full advantage
If you’re looking to drive results at your company, it’s important to whether or not you’re getting the most out of data that you could be. The combined power of quantitative and qualitative data has the power to drive results as few other things are able to.
The Lego brand understands the potential of combining quantitative and qualitative data. While Lego has been a successful brand since early in the twentieth century, the company became aware of untapped market potential in 2008 while looking at global data which showed around 90 percent of Lego products were sold to boys.
After a look at those numbers, Lego spent four years conducting qualitative research into how girls interacted with Lego products. This research included thousands of focus groups, observations, and interviews. After conducting this qualitative research, Lego used the information to create new product lines and sales soared 25 percent.
If you want to see successes like the ones Lego saw with their increase in sales, ask yourself if there is more data analysis to be done at your company. Is there too heavy of a focus on numbers or too heavy on non-numerical data? After asking these questions and implementing a full range of tools and techniques for data analysis, you’re to start seeing your desired results.