A Step-by-Step Guide to Smart Business Experiments

The power of analytics in decision making is well understood, but few companies have what it takes to successfully implement a complex analytics program. Most firms will get greater value from learning to do something simpler: basic business experiments. Managers need to become adept at routinely using techniques employed by scientists and medical researchers. Specifically, they need to embrace the "test and learn" approach: Take one action with one group of customers, a different action (or no action at all) with a control group of customers, and then compare the results. The feedback from even a handful of experiments can yield immediate and dramatic improvements. In this article, the authors provide a step-by-step guide to conducting business experiments. They look at organizational obstacles to success and outline seven rules to follow.