Instinct
Think about you’re providing software companies to clients. You have an interest in how a lot income your software will generate from clients’ yearly membership purchases.
You’ve tracked key metrics just like the time they spend on the app, their common session length, and the size of their membership.
Moreover, you will have information on the quantities clients have spent on the app. So your information appears to be like one thing like what’s illustrated under.
You consider this info might assist predict how a lot a buyer is more likely to spend this 12 months, and thus, the income generated.
That is the place a statistical method turns into helpful. For instance, by inspecting the connection between “Yearly Quantity Spent” and “Size of Membership,” you possibly can estimate how a lot a buyer is more likely to spend within the upcoming 12 months.
After plotting these two columns from a 500-row dataset, you see the graph proven under.