What is frequency distribution?

If you’re conducting research and you’ve completed a large-scale data collection, it’s now time to organise the data and see if you can spot any trends. Frequency distribution is one of the most effective ways to collect data in either graph or tabular form. Find out a little more about the characteristics of frequency distribution with our simple guide.

Frequency distribution explained

If you’re dealing with a considerable amount of data, it can be challenging to find the frequency of individual data values. That’s why frequency distribution – a basic statistical technique – can be highly useful for anyone who works in data collection. Essentially, frequency distribution can help you see the number of occurrences of distinct values within a given period. You can use frequency distribution to explore if certain occurrences are high or low, or whether they’re spread out across the scale or concentrated in one particular area.

In other words, frequency distribution is a fantastic way to organise large datasets and spot trends. There are two primary forms of frequency distribution – frequency distribution tables and frequency distribution graphs. Now, let’s explore these in a little more detail:

Frequency distribution tables and graphs

To understand how frequency distribution tables and graphs work in practice, let’s look at an example. Imagine that you’ve conducted a survey, asking 20 of your best customers which payment method is best for their needs. You’ve received the following answers (in reality, frequency distribution would be used for considerably larger datasets):

• Credit Card, Direct Debit, Direct Debit, Credit Card, Digital Wallet, Direct Debit, Cryptocurrency, Cash/Cheque, Direct Debit, Standing Order, Credit Card, Cash/Cheque, Direct Debit, Digital Wallet, Bacs Transfer, Direct Debit, Direct Debit, Credit Card, Credit Card, Standing Order

The frequency of each answer may not be immediately apparent, which is why you should use a frequency distribution table to gain a better understanding of the data:

As we can see from this frequency distribution table, Direct Debit and Credit Card payments are by far the most popular answers. For a more visual representation of the same dataset, we can use a frequency distribution graph (we’ve selected a bar chart):

Frequency distribution in business

Now that you know a little more about how frequency distribution tables and graphs work, let’s think about their application in the world of business.

As in the example above, surveys and reports are often used in market research, a strategy used in several areas of business, i.e., monitoring the competition, conducting customer surveys, analysing industry trends, testing products and services, using focus groups, identifying your target market, and so on. However, once you’ve collected the data, it’s essential to display it in such a way that it helps you to understand what it means for your business.

Thinking again of the example above, the data strongly indicates that your customers prefer Direct Debit. If you’re not already using a Direct Debit payment solution like GoCardless, this research is a strong argument in favour of starting. However, you may not have known that this was something that your customers were crying out for if you hadn’t been able to ascertain the frequency of their responses. Hence the potential importance of frequency distribution for businesses.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.