Don’t Believe Everything You Read
It’s a pretty well-known fact that numbers and tests are manipulated by organizations and news media every day. Not necessarily illegally, but simply to support a position they are presenting.
Even in psychology, there’s a well-known phenomenon where the human brain purposely skews the manner in which it collects information to arrive at the hypothesis that has already been created.
Considering both of these processes, it’s easy to imagine that this is probably happening in business meetings everywhere — where monumental decisions with dire consequences are being made based on skewed, even inaccurate data.
Here are some basic ideas to make sure that you don’t fall into this analytical trap:
Test Apples to Apples, in a Large Orchard
Make sure that within any test that is conducted, the two or more variables are directly comparable to each other, and the tracking mechanisms are quantifiable. For example:
GOOD: 10% off Product A vs. $10 off Product A
If Product A costs $100, both offers are the same value. The test will show which presentation people gravitate towards — a percentage or dollar amount.
NOT SO GOOD: 10% off Product A vs. $50 off Product B
Depending on the actual products, this doesn’t really prove any behavior in the end. There are too many variables — a complete apples to oranges comparison.
Also, the sample size should be large enough to support the conclusion. Depending on the business, it could be 5 or 5 million customers, as long as you’re comfortable that the final trend is accurate.
Consider the Opposite Hypothesis
You have a hypothesis that Product A performs better than Product B in the summer months. Now think of the exact opposite and try to prove it. If you can’t, then your hypothesis is on the right track. If you can prove the opposite, then you’ll need to start over. It’s not unusual to explore multiple hypotheses. Often times, the best course of action is to think about the exact opposite, instead of skewing data to support your initial assumption.
Just Keep Asking Questions
Most business decisions don’t need to be made on the spot or without enough information to justify them. Take your time and ask questions. Even after the first data set is extracted, ask more questions. It doesn’t have to take forever, but it doesn’t have to be instant or reactionary. The more you ask of the data, the better you’ll feel about your decision and most likely, the more accurate it will be.
By following these general ideas and practices, you should come to more accurate conclusions and make smarter business decisions.
By Modern Postcard
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