One essential skill that certainly useful for any data analytics professional to comprehend is the ability to perform an A/B testing and gather conclusions accordingly.

Before we proceed further, it might be useful to have a quick refresher on the definition of A/B testing in the first place. As the name suggests, we can think of A/B testing as the act of testing two alternatives, A and B, and use the test result to choose which alternative is superior to the other. For convenience, let’s call this type of A/B testing as the binary A/B testing.

Despite its name, A/B testing in fact can be made more general, i.e. to include more than two alternatives/classes to be tested. To name a few, analyzing click-through rate (CTR) from a multisegment digital campaign and redemption rate of various tiers of promos are two nice examples of such multiclass A/B testing.

The difference in the number of classes involved between binary and multiclass A / B testing also results in a slight difference in the statistical methods used to draw conclusions from them. While in binary testings one would straightforwardly use a simple t-test, it turns out that an additional (preliminary) step is needed for their multiclass counterparts.

In this post, I will give one possible strategy to deal with (gather conclusions from) multiclass A/B testings. I will demonstrate the step-by-step process through a concrete example so you can follow along. Are you ready?

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