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Business stats for novice!


loopydean
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Hello there. I found out about these forums from a friend and they said I may be able to get some quick help here.

Quick background - I own my own business and wanting to do some statistical analysis on the effectiveness of our advertising spend on bringing in new clients to my business. I am in the medical field and did statistics and research methods at university, but this was a long time ago and I am confused reading through my old text books.

I simply want to correlate our advertising spend per month to our new clients per month and see if our advertising is actually bringing in enough new clients to justify the spend. I have all the data for several years with new clients for the month and exactly how much was spent on advertising for each month.

Can someone give me some help to figure this out?? Any help would be much appreciated.

Thanks,
Dean
(Statistics beginner)

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This really isn't the right forum for this type of stuff (try stackexchange).

You are actually getting at something very deep: how can we extract causation (i.e. "variation in advertising spending causes variation in number of new clients per month") from correlation?

 

Try correlating # of new clients per month against advertising spend "X" months ago (i.e. lagged). If you want to be adventurous and take into account the effect of other factors (to lessen Simpson's paradox  http://en.wikipedia.org/wiki/Simpson%27s_paradox), try a multivariate Poisson regression (again with lagged factors).

Edited by DMX
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