Qualitative vs. Quantitative Data: What’s the Difference?

As a small business owner, your eyes may glaze over when someone starts talking about data and different types of data. However, proper use of data can determine the success or failure of your business. Data analysis and understanding what data is—and how it can be helpful—are critical for your success.

There are many types of data that have different uses. The difference between qualitative vs. quantitative data is an example. It allows you to better examine how data can make a positive impact on your line of work.

What is qualitative data?

Qualitative data is inexact data. It cannot be easily defined or measured in numerical form. Instead, it is data that comes from observing and recording. Unlike quantitative data, qualitative data cannot be measured with precision. It comes with more subjective measurements, like reading facial expressions or gauging someone's reaction. However, this allows you to get an in-depth understanding of someone's thoughts.

For qualitative data to have meaning, it will have an agreed-upon definition and criteria. This means that qualitative data must be gathered in a standardized way. It also means that the measurements used to determine this data are agreed to and made understandable. This is necessary for analysis.

Qualitative data examples

Since qualitative data is derived from observation or questioning, it tends to favor open-ended questions. Examples include:

• Questions on responses to surveys

• Responses of focus groups

• End results of conversations with customers

• Feedback after a sales call or use of a product

What is quantitative data?

Quantitative data are numbers or answers that come from measurement and observation. This allows for the data to be sorted, analyzed, and displayed visually. Quantitative data is usually numerical or an either-or (such as yes or no). As such, it is rendered into some sort of graph or chart.

Types of quantitative data and examples

There are three types of quantitative data:

1. Discrete data

Discrete data is data that can only take on certain values. These are definitive values that exist in concrete numerical forms.

Examples can include:

• Employee numbers

• Sale figures

• Responses to yes/no surveys

2. Continuous data

Continuous data is data that could, in theory, exist anywhere on a scale. The only variable that would limit your ability to measure continuous data would be the accuracy of your unit of measurement.

Examples can include:

• Temperature of a room

• Weight of a person

• Measurement of a piece of clothing

3. Interval vs. Ratio data

Interval data is data that can fall below zero. A positive or negative integer is used to represent interval data. Ratio data is data that can never fall below zero.

There are a few examples that would apply to your business. Ratio data could be sales numbers, which could be zero, but never fall below zero. Interval numbers would be your net profit and loss statement. The number could be positive or negative.

Measurements and observations vs. descriptions and open-ended questions

There are major differences when it comes to utilizing or conducting quantitative vs. qualitative research. Both can tell you interesting stories. However, they have different applications that you have to consider when using the two.

Small businesses will have different reasons to want to explore both of these research approaches, as both pieces of data can give away different pieces of information. Quantitative data may be able to answer questions and gauge sentiment in an exact way, but qualitative data may be able to give you specific insight and advice that you would be unable to glean otherwise.

How your business can take advantage of quantitative data

Graphs or charts are used to display quantitative data. The data will use numbers and draw broad conclusions from those numbers. As a small business owner, you can use qualitative research to determine sales figures or customer sentiment.

For example, you could ask customers a series of questions about their willingness to shop at a new location of your store if it was located closer to them. Questions could include, "I would spend more money if a store was closer" or, "I would shop more frequently if a store was closer." These answers could be presented on a scale of 1-5. Another option is by using a series of answers. These answers would run the gamut between "strongly agree" and "strongly disagree."

How your business can take advantage of qualitative data

Words or observations tend to be the preferred method for the display of qualitative data. This can make qualitative research more difficult to quantify. Fortunately, it can still be insightful information.

Qualitative research would be how customers responded to open-ended questions. Examples include, "How much of a hassle is it to drive to our current location?" or, "Does the distance of our location keep you from using our store?" This is why focus groups are a form of qualitative research.

Observation and analysis

Qualitative data requires more analysis and interpretation. This is why many businesses tend to conduct quantitative research. In quantitative research, the numbers speak for themselves. In qualitative research, you may have to put more thought into the interpretation and study of the data collected.

You can conduct your own qualitative research. This can happen through the review of relevant literature in your field of business. This may give you open-ended insight into a field by allowing you to summarize the information put together by others.

Qualitative research is great for the detection of trends. It can also be highly insightful and potentially make suggestions for your business that you hadn't even thought of.

Using research to improve small business performance

Small business owners can use qualitative and quantitative data to boost their performance. For example, business owners could survey customers to determine their satisfaction. This would be quantitative research. At the same time, SMBs could ask their employees to gauge the reactions of the customers they serve. This would be considered qualitative research.