As you work to derive meaning from numbers in a business case setting, you will realize that lot of the data collection boils down to a set of basic math. These functions are Mean, Median & Mode which I collectively refer to as M&M’s of marketing statistics.
Before we get into learning what these are and how they help I want to emphasize this approach does not imply that all you should do is find the M&M’s and call it quits. Knowing and using the basics will help you triage mountains of data effectively for your own sanity.
Here are the M&M’sFor simplicity (and to keep you interested) we will stick to the basic arithmetic version of things. If you are interested for more look up geometric mean, geometric median, confidence intervals & uniform distribution. Probability and distribution are galaxies in the math universe, so don’t let them scare you away 😉
Before we begin let’s have a common data set
Data Set: 2, 5, 6, 2, 6, 2, 4, 7, 3
Ordered version: 2, 2, 2, 3, 4, 5, 6, 6, 7
Count = 9; Sum = 37
Mean: This is an average for all your data. One of the most common math principles and easy to remember. Our sum is 37 and count is 9. Mean is 37/9 = 4.11
Median: This is the center point of our data, this is also the reason I ordered the list above. You can calculate median from your raw data but it will not translate correctly to real world understandings so its important to order your data set. Median is the center value of your data set as we have 9 numbers the middle value is easy to find, its 4.
Mode: This will be the most frequently occurring number in our data set. In this case its 2. In the real world you will find data sets use decimal places making each value in a data set unique, the solution for this situation is to assign ranges like 0-2, 2-4 … this will help you find mode for your data. The range size and distribution is decided by your data set.
Now What: Well now that your data has some manner of sanity to it start playing with it…good ol spreadsheet program. Sort, filter, arrange, pivot to your heart’s content and enjoy the beauty of numbers.
until next time,
image credit: mr-iouscurious.deviantart.com