Question

A marketing manager believes that changing the color of the "Buy Now" button on the company's website will increase the number of purchases. Currently, the button is green. To test this hypothesis, the manager randomly selects two groups of website visitors. Group A sees the website with the green "Buy Now" button, while Group B sees the website with a new orange "Buy Now" button. After one week of observation, the manager records the number of purchases from each group. Data:

Group A (Green button): 50 purchases Group B (Orange button): 65 purchases Perform a hypothesis test at the 5% significance level to determine if there is sufficient evidence to conclude that changing the button color affects the number of purchases. State the null and alternative hypotheses and your conclusion based on the test results.​​

Answer 1

Reduce revenue risk: by running the test on a small percentage of visitors, you reduce the risk of having one of your test variations causing a significant drop in revenue.