August 04, 2010

At IPA we often sell organizations on the idea of doing randomized testing by pointing out that corporations do it all the time, and they wouldn't pay for the evaluations if it weren't useful to them.  In the Washington Post today Steven Pearlstein has an interesting piece with examples of randomized trials from the business world.  Capital One and Google I knew about but Pearlstein digs deeper, pulling up results from Kraft, Family Dollar stores, and even Red Lobster restaurants:

Red Lobster, for example, used software to test nine remodeling schemes for its restaurants, mixing and matching low-, medium- and high-cost options for interior and exterior designs. While the chain's finance chief won't say which combination won, he did report that the winner boosted sales by 8 percent -- a useful guide when you're about to invest $200 million.

Full article here.  Pearlstein also has an origin story for randomized trials I hadn't heard before, involving different cures for scurvy.