Skip to content

Hard data vs. soft data – what should you choose to fuel your business decision-making? Spoiler: Both are important. See for yourself in this article.

In the information age, data is essential for business growth and success. But between endless data streams and analytics techniques, determining the right data to drive decisions can be challenging. Understanding the core differences between hard data and soft data is key.

Hard data consists of cold, objective facts and metrics. Soft data includes subjective insights on human perspectives and motivations. While some leaders rely solely on hard data, the truth is both data types are critically important. This article will compare hard and soft data, providing actionable guidance on leveraging both to make smarter business decisions.

What is Hard Data?

Hard data refers to quantitative, definitive facts and statistics that are concrete and consistent regardless of interpretation. Also known as "deterministic data," hard data is precise and structured. It answers objective questions like how many, how often, when, and where.

According to IBM, 2.5 quintillion bytes of data are generated daily through customer transactions, social media, smartphones, and more [1]. Structured hard data makes up a significant portion of this data explosion.

Some common examples of hard data include:

  • Financial metrics – revenues, profits, costs, cash flow
  • Operational metrics – production volumes, defect rates, cycle times
  • Web analytics – traffic, conversions, bounce rates
  • Sales data – leads, opportunities, average deal size
  • Testing data – clinical trials, A/B test results
  • Demographic data – age, location, income

Hard data is collected through quantitative methods like surveys, system monitoring, and web analytics. It is highly measurable and can be analyzed using statistical techniques. Hard data provides concrete evidence of business performance and metrics.

What is Soft Data?

Soft data consists of qualitative insights that are subjective and interpretive. It includes people‘s opinions, perceptions, sentiments, and behaviors. Soft data is unstructured and contextual. It provides color behind the cold hard facts.

Soft data types include:

  • Customer feedback – satisfaction surveys, product reviews
  • Buyer insights – sales notes, win/loss analysis
  • Focus groups – product feedback, usage trends
  • Social conversations – commentary, conversations
  • Employee perspectives – satisfaction, culture

Soft data helps explain human motivations, preferences, pain points and changing behaviors. It is collected through qualitative techniques like interviews, observation, and open-ended surveys. Soft data analysis involves synthesizing patterns and themes.

According to estimates, over 80% of an organization‘s data is unstructured [2]. Tapping into these soft data streams can radically improve context for business decisions.

Complementary Value of Hard and Soft Data

On their own, neither hard or soft data gives decision makers a complete picture. Hard data identifies what is happening but not why. Soft data provides subjective color but lacks hard precision.

Together, they form a powerful combination. As this example illustrates:

Revenue growth declined from 4% to 1% over the past quarter (hard data). Customer feedback indicates satisfaction with a recent product redesign has dropped (soft data). Combined, these insights suggest the redesign has caused issues leading customers to buy less. Addressing this issue could boost revenue growth.

This example shows how soft data complements hard data by revealing the human behaviors and motivations driving the numbers.

According to research, analytics programs that leverage both hard and soft data drive more than twice as much annual growth compared to programs focused on just one data type [3]. The future of decision making involves tapping into both.

Best Practices for Collecting and Analyzing Hard and Soft Data

There are proven techniques organizations should follow to harness the full power of hard and soft data, including:

Hard Data

  • Instrument data collection – Track key business metrics automatically through systems like web analytics, CRM, and business intelligence.
  • Prioritize accuracy – Ensure data is consistent and accurate through data governance processes. Address any inconsistencies or inaccuracies.
  • Run controlled experiments – Leverage A/B testing to generate hard statistically significant data on digital experiences.
  • Visualize data – Use dashboards and data visualization to spot hard data patterns and trends.
  • Conduct statistical analysis – Run statistical tests to analyze relationships between metrics and data points.
  • Automate web scraping – Leverage web scraping APIs to collect vast public data sets at scale.

Soft Data

  • Ask open-ended questions – Avoid yes/no questions. Ask "why" and "how" to uncover deeper qualitative insights.
  • Listen on social channels – Use social listening to analyze unstructured public conversations at scale.
  • Run focus groups – Gather different customer segments for guided discussions on their perspectives.
  • Interview users – Conduct one-on-one interviews to gain rich insights into user motivations.
  • Send quick surveys – Use short post-interaction surveys to capture experience feedback.
  • Analyze patterns in feedback – Identify common themes in open-ended feedback through qualitative analysis.
  • Contextualize hard data – Factor in soft data insights when interpreting hard data reports.

Balancing both data types is critical. According to one survey of business leaders, companies that are more mature at using analytics are over 5 times more likely to leverage both hard and soft data in decision making [4].

Conclusion: Harness the Power of Hard and Soft Data

In today‘s highly competitive environment, business success depends on evidence-based decision making. Leveraging both hard and soft data provides the objective metrics and human perspectives needed to make smart strategic moves.

Hard data identifies what is happening through concrete statistics and facts. Soft data reveals the behavioral contexts and motivations driving the numbers. Together, they provide comprehensive insights for optimizing performance across metrics like revenue, customer satisfaction and retention.

By instilling processes to effectively collect, analyze and act on hard and soft data, organizations can thrive supported by the full picture. The future belongs to those who recognize data is not just numbers and dashboards, but also perspectives and conversations. With both, anything is possible.






Join the conversation

Your email address will not be published. Required fields are marked *