Welcome to Advanced Statistical Techniques! You've mastered prediction basics and experimentation. Now let's explore powerful statistical methods that tackle complex business challenges beyond simple forecasting.
These techniques help you understand relationships between variables, not just predict single outcomes.
Engagement Message
Which two business metrics do you find linked but still puzzling?
Let's start with regression analysis - the foundation of advanced statistics. While prediction asks "what will happen?", regression asks "what causes what to happen?"
Regression reveals how changes in one variable affect another variable.
Engagement Message
Can you describe this sentence: "When price increases, sales typically..."?
Here's regression in action: Instead of just predicting next month's sales, regression shows how sales respond to price changes, marketing spend, seasonality, and competitor actions simultaneously.
This reveals which levers actually drive business outcomes.
Engagement Message
What is one business lever you suspect affects performance but aren't sure how much?
The power of regression is isolation. It can show that marketing spend increases sales by 15% while accounting for seasonal effects and price changes happening at the same time.
This separation helps you understand true cause-and-effect relationships.
Engagement Message
In a sentence, why is isolating individual effects more useful than just citing correlations?
But regression requires careful thinking about causation. Just because two variables correlate doesn't mean one causes the other. Ice cream sales and drowning incidents both rise in summer - but ice cream doesn't cause drowning.
Always ask: "What else might explain this relationship?"
Engagement Message
What is an example where correlation definitely doesn't imply causation?
