Marketing Tips Part 12: The Power of Statistics

Stats is powerful. Most math is descriptive (what’s this function look like?) But stats is predictive and you can use it to validate things. In terms of business, I like to use it to validate and quantify the impact of different factors using multiple regression in Excel…

The validation comes from your p values (what’s the odds of seeing a number this extreme by chance? Hopefully <0.05, the standard). You quantify the impact with your coefficient (how large is the effect of this factor on my outcome?) You can use this for all kinds of data sets.

I personally plan on having some fun with this soon. Excel has a free tool you can add-on but I haven’t found one in Google sheets yet. The old one is disabled.

Here’s an example I would try if I had all the housing data in a table: how would selling prices be impacted by size, age, distance from downtown, etc?

Here’s what it looks like: Conducting a Multiple Regression using Microsoft Excel Data Analysis

Kids always ask when I’m going to use math? You can use stats. I remember taking a business simulation course in grad school, realizing I could reverse engineer it with multiple regression. My group wouldn’t listen.

Anyway it’s a cool tool to use along with the 80/20 rule. If you want to find out what matters, how much, and how certain you can be about it, try it out.

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