• ---- Number of Conversions to Predict Future?

RhinoFish - 1:30 pm on Jul 5, 2007 (gmt 0)

"Hey Rhino, careful with the reactionary behaviour."

My post came across to you wrong, I wrote it with a smile, not a scowl. :-)

"Statistical analysis is the only thing that you can count on... if you're in it for the long haul."

I didn't say don't use it. In fact, I said to use them but to not rely on it too heavily. I use lots of analytical techniques myself. But it's been my experience that when people start asking about confidence levels based on standard devs, they will apply things with far too high a degree of confidence themselves.

"Did you look up the 6 sigma stuff? It accounts for those anomolies and also gives you guidelines for identifying the bumps (heaviside functions for the math geeks). This isn't new theory, it's old, tried and proven."

I'm well aware of the practice and of the math. I still assert that you need a highly capable process to be under study and that what we do doesn't qualify. I have enough empirical evidence to know that. Again, that doesn't mean it's useless to me to apply mean and standard dev techniques to the numbers, but they must be viewed with an ongoing skepticism. The process analyzed needs to follow a Gaussian distribution (though substitutions of other known process / dist curves can be studied as well) for the studies to be rigorously meaningful. I argue that they are not, however, using the statiscal analysis can still be worthwhile for trend analysis and ppc control / feedback, but ignoring the shortcomings of this method will leave you disappointed, and at times, surprised.

Even the name six sigma that you've used is not applicable to what we do for a living. At six sigma, in a tightly controlled manufacturing process, you'll get 3.4 bad products per million produced. In our world, that would mean you're able to predict and achieve sales outcomes with a degree of accuracy that is simply not attainable.

"Embrace the math. Use statistical analyis. You can identify the cycles, the trends and set alarms for the anomolies. If you do anything else it's called gambling and all those gamblers are what make Vegas rich. Me, I'd rather be the casino... or a bank, or a stock broker, or an insurance company... Which mega company doesn't use stats as a fundamental tool for running their company?"

Again, I didn't say don't analyze trends - I said calculating degrees of confidence will likely lead you to be overly confident and unable to see the unexpected coming.

If you choose to use less rigorously imposing analysis than six sigma, I wouldn't call that gambling. Tens of thousands of businesses in the US do sales forecasts without degree of confidence calculations, using many other statistical analysis methods. This doesn't make them all gamblers.

"We continue to enter new markets and rock each one because we do the math. We've done it over 20 times! Hopefully One_Thing_Well will take this advice and run with it. In a couple weeks this post will be buried and only the hand full of people who read it will get such clear direction. Of course, 95% of them will ignore it and that's good for me :)"

We don't differ as much as you may think, both in results and application of statistical trend analysis. It's more that I don't view it something that would make a booming success of everyone who would read and follow your SA suggestions here. There are other very tangible skills you are using that you aren't giving enough credit. And the marketing world's best success stories aren't centered on mathmaticians or their sigmas.

So rock on! And I wish you zero defects and no negative outliers! :-)