Your company runs a marketing promotion and wishes to evaluate its performance. You design a campaign to test the “experimental” promotion given to a group of prospects versus a “control” group that experiences business as usual. You then collect data on sales by group for a month and contrast the results of the two. Is there evidence that the promotion enhances sales?
For kicks, I've generated random data to use for illustration. In my “campaign”, there are 400 customers exposed to the promotion treatment, with 500 in business as usual. The promotion group spends $206.85 on average; the control $195.49. When I apply a standard t-test to the data, I reject the hypothesis that the average spending is the same for each group – assuming of course that stringent assumptions about the collected data are valid. In this case, the evidence suggests that the promotion group spends more. If I'm VP of Marketing, I'm happy.
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