7 Powerful Reasons for Embracing Qualitative Data in the AI Age

We live in a quantitative world. Quants rule Wall Street. And with the rapid rise of AI adoption, corporate decisions are increasingly driven by AI ingesting large amounts of quantitative data.

 Where does qualitative data fit into this landscape? Is it a technology of the past, eclipsed by newer methods in the age of AI?

At Silicon Valley Research Group, we continue to value the power of qualitative data, even more so today in the era of AI.  AI enables us to accelerate decisions and processes and we all value this speed, but not at the expense of context and authenticity. Here are the top seven reasons for continuing to embrace qualitative data and insights today:

1. While decision makers are comfortable with correlations found in data, causality is implied in conclusions from quantitative data. Qualitative data helps verify and eliminate erroneous correlations where causality does not exist. Uncovering the correlation enables you to derive tactical advantage from that correlation such as promotions that lead to increased short-term sales; understanding the causality behind the correlation leads to strategic advantage-uncovering underlying motivations and emotional triggers for a behavior resulting in revamping customer experience, creating new offering/revenue streams, etc.

2. Qualitative data provides a deep lens into the customer journey. Customer anthropology on how customers integrate your products into their lifestyles, habits and practices provide invaluable insights into product and customer experience design. Quantitative data misses these important components. Quantitative data focuses on data around customers’ consumption of a company’s products and related factors.. Conclusions from such data can be one-dimensional and miss salient points on customer preferences for design and experience. Customers don’t just buy your product, they integrate them into their respective lives and an over-reliance on quant data misses this vital component.

3. Qualitative data also performs a vital function in exploring “white space” opportunities not otherwise apparent of previously considered. Starbucks observed a spike in in-store consumption mid-morning driven by young mothers meeting up with babies in tow in strollers, requiring smaller stores with narrower aisles to rearrange furniture to accommodate strollers to create a more satisfying customer experience for this market segment.

4. Your CES or Customer Effort Score quantitatively measures the level of effort a customer needs to expend to solve problems relating to their consumption of your products or services. The metric revolves around a customer’s touch points with your company in their efforts to resolve issues around the consumption of your product and related items. Here again, qualitative data comes to the rescue to complete the picture and comprehend the private struggles customers have with your product (opening packaging, for example) that will not show up in the Customer Effort Score.

5. Observational data enables companies to hear what customers say-emotional attachments or conflicts with aspects of your product, unarticulated needs, workarounds they engage in while using your product. These are insights that will not appear in quantitative data and spreadsheets and are best derived from deep dives into customer's lifestyles, attitudes, habits and practices.

6. Qualitative data yields deeper and more actionable at the start of the product development cycle than most quantitative methods. While quantitative data may have been responsible for initial identification of the gap or need being explored, qualitative methods, are best suited for translating needs into product concepts and nailing your product market fit.

7. While qualitative data does not have the “cool factor” of spreadsheets and Tableau style dramatic data visualizations, it can be very impactful in the boardroom in presentations to executive decision makers. Independently obtained customer quotes, verbatim open-mic comments and video testimonials provide important color and context that executives seldom experience first hand.

Alan Nazarelli is Founder and CEO of Silicon Valley Research Group, a global market research and strategy development firm focused on the needs of technology companies.

Do you have questions, or would you like to hear from Silicon Valley Research Group on a specific topic in a future blog publication? Contact us.