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Experiments Illustrated: How Random Assignment Saved Us $1M in Marketing Spend
- IntelyCare, a platform connecting nurses with work opportunities, faced challenges in hiring nurses during the 2020-2021 global pandemic.
- To attract candidates, they considered offering a $100 bonus for completing the first shift, but decided to run an experiment instead of implementing it directly.
- The experiment involved randomly offering bonuses ranging from $0 to $100 in increments of $25 to applicants, with thousands of participants at each bonus level.
- Analyzing the data, they found that the effectiveness of bonuses varied between nurses and nursing assistants.
- Nursing assistants were more likely to start working with any bonus amount, whereas nurses were less likely to start working with a bonus.
- After considering multiple comparisons, they discovered that the applicant's role as a nurse or nursing assistant was a significant dimension affecting the bonus impact.
- The study revealed that for nursing assistants, smaller bonuses had a more significant effect initially, while for nurses, no bonus proved to be more effective.
- Based on the findings, IntelyCare decided to do away with bonuses for nurses and opted for a $25 bonus for nursing assistants.
- This approach saved them from spending an extra $1 million in bonuses while still achieving the desired recruitment outcomes.
- The experiment highlighted the importance of testing and data analysis in making informed decisions, especially in marketing strategies.
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