Qualitative Methods Enrich Quantitative Data

Posted by | Fuld & Company

Seventy-six percent of millennials want to drive an eco-friendly car. Ninety-two percent of students prefer physical books to e-readers. Ninety percent of senior executives confirm that customer experience is one of their top three priorities. Sixty-seven percent of U.S. manufacturing executives plan to increase investments in data analytics next year.

Data is king. Statistics and opinion polls accompany every article, analysis, and prediction. It’s difficult to find a claim without a piece of quantitative evidence behind it.

Many of our clients – especially those in engineering, science, technology or other data-driven industries – are incredulous when we uncover insights using information that is not replete with huge data sets. Yet, our experience continually demonstrates that correctly placed people, with the right information, can illuminate important factors of a client’s market, competitors, or customers. Coupled with expert analysis, the conclusions may be unexpected or run counter to long-held beliefs. Nonetheless, the accuracy is continuously proven.

Without having previous exposure, client executives don’t trust that qualitative research and analysis is as structured and can be as definitive as the research and analysis of a thousand data points. But, not all questions can be answered with quantitative data. The question that executives should be asking is “what research approach is best suited to the problem I’m trying to solve?” In many cases, qualitative beats quantitative hands down.

Quantitative methods seek to measure + calibrate

Quantitative research and analysis is effective at measuring current conditions, whether that means gauging an industry sector’s investment trends or testing consumer preferences. Analysts can represent results in scatter plots, pie charts, and a stream of sophisticated statistics. The value of quantitative data gathering centers on its mathematical precision, its objectivity, and the ability to generalize findings to some larger population.

Our quantitative research and analysis of clients’ customer preferences, for instance, provide significant value in product development and design and service implementation. Together with clients, we can extrapolate the findings developed from the quantitative data and our analysis to larger customer segments, thereby expanding the value.

Yet, as concrete as they are, quantitative methods have limitations. Statistics alone can’t fully explain the behavior of market players or help executives better understand their future direction.

Measuring the “how many” or “how frequently” isn’t applicable when you want to achieve a richer understanding of the “why.” Further, quantitative data are for the most part backward-looking and, by themselves, may not be an accurate predictor of future developments or conditions. Such broad questions and thematic conclusions are best tackled by qualitative research and analysis.

Developing and executing a sustainable competitive strategy requires the mix of the answers to “how many”, “how frequently”, as well as “why” and “what’s next?” Only with this combined understanding do executives have the insight to anticipate market shifts and risks, and implement strategies that create competitive advantage.

Qualitative methods seek to explain + pinpoint meaning

Depending upon the question at hand, qualitative methods are applied to provide contextual information not otherwise available. A recent client, for instance, wanted detailed insights and explanations about the plans, intentions, and activities of a select set of market players. By carefully selecting and interviewing well-informed people in various segments of the industry, we were able to draw upon their perspective and direct experience.

By seeking independent confirmation of qualitative information, we were able to verify and validate significant pieces of information to improve the reliability of our research. And, using relevant analytical techniques, we were able to come to precise conclusions and to provide explanations for the behavior of market players and recommendations to our client for competitive strategies to deploy.

Qualitative research and analysis enables the discovery of specific behavior patterns of individual market players over time or identifies possible correlations between variables to investigate through quantitative research. It gives executives insight into the context or the genesis of current conditions, shedding light on both problems and successes that particular market players have experienced and that their own firm may experience.

Because qualitative and quantitative methods offer different kinds of insight, they become more powerful when used together. Such mixed-methods research and analysis can be applied with either methodology as the lead, or at times, in a tandem manner. For instance, qualitative research can inform the design and structure of subsequent quantitative studies; quantitative research helps analysts generate hypotheses that can then be supported or refuted by evidence from qualitative work.

Analysis provides the “so what”

The value of information is only as good as the analysis that follows. Ultimately, either type of information collection and analysis – whether qualitative or quantitative – is applied to gain understanding and to refute or support hypotheses.

Analytical techniques vary across the spectrum of qualitative information and quantitative data sets, and ensuring proper conclusions means ensuring that appropriate analytical techniques are applied. For instance, successful analysts use tools created by Michael Porter, such as The Five Forces and The Four Corners, to assess qualitative information. The application of such models to quantitative data sets is not prohibited, but may be limited. Here mathematical models and statistical analysis usually prove more valuable.

Executives who rely heavily on quantitative research can become frustrated by the answers they receive. They resort to seeking more data on customer behavior and competitor activity without addressing the root of the problem: they’re asking the wrong questions. We’ve seen even experienced strategists fall into this pitfall.

Our advice: don’t be skittish about the small sample size. Trusting insights uncovered from key opinion leaders and well-positioned sources can only enhance your understanding of your competitive landscape. These insights will enrich findings from quantitative data. More importantly, qualitative research has the potential to point you in directions that other players haven’t even considered.

Tags: Brand Strategy, Competitive Intelligence, Competitive Strategy, So What Analysis