What are some uses of statistics in business?
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Internally, companies use statistics to evaluate employee performance and to make financial decisions. Statistics gathered through external research are used to enhance products and services and to build effective promotional campaigns, according to Audra Bianca for the Houston Chronicle.
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The use of stats to analyze workers is known as performance management. A simple application is the comparison of actual sales or production levels against quotas or projections. If a salesperson is projected to sell $200,000 in goods during a month, an actual total of $150,000 is 25 percent short of the goal. Aside from extenuating circumstances, a manager would likely discuss this shortage with the rep, notes Bianca.
The Society of Actuaries indicates that many company employee actuaries use math and statistical analysis to make recommendations on financial decisions. Insurance providers use actuarial work to evaluate underwriting decisions and premiums. Statistical analysis takes out some of the guesswork and minimizes the risk of an investment.
In evaluating a potential product or service development, companies conduct research and analyze statistics on unmet needs. The goal is to figure out which goods and services are desired the most by a target market, according to Bianca. Marketing research data is also used to identify the most important benefits in an offering so the company can promote its brand as effectively as possible.
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