Question

How to test hypotheses and compare results for the purpose of forecasting and making better strategic business decisions.

Answer 1

Hypothesis testing is an act in statistics whereby an analyst tests an assumption regarding a population parameter. Hypothesis testing in statistics is a way for us to test the results of a survey or experiment to see if we have meaningful results. We’re basically testing whether our results are valid by figuring out the odds that our results have happened by chance.

Hypothesis testing is an important tool in business development. By testing different theories and practices, and the effects they produce on your business, we can make more informed decisions about how to grow our business moving forward.

Hypothesis testing has many uses for helping to develop our business. Suppose we are training our outside sales force, and want to know whether a specific sales technique results in a higher close ratio than the methods currently employed by our company. To make this determination, we can take the same steps as outlined above for the Toronto IQ experiment. Our null hypothesis would be that the new technique has no effect on sales that isn’t explained by random chance, while our alternative hypothesis would be that the method does have an effect, whether positive or negative. If we conclude that the technique has an effect, and it is positive, then we can implement the new method with confidence, knowing it is likely to bring results.