Test, measure and monitor EVERYTHING
One of the key principles we want you to get from this material is that you must test everything you do. Any marketing or sales efforts for your business have to be tested. Without testing, how will you know what is working? And as important, how will you know what is not working? The purpose of testing is to enable you and your business to be even more successful over time.
And, there is a critical distinction between testing and experimenting. By testing, we mean “Taking a marketing or sales program that is already working, changing or refining the offer, then testing to see which version works best. If you were experimenting, you would be trying several different types of marketing or sales programs to see if anything works. One of the biggest challenges for startup businesses or businesses that are fairly new – say less than 2 years old – is to know about and recognize the difference between testing and experimenting. If you have been in business for a while, have had success with marketing and sales campaigns, and want to improve them, then you need to be sure to test and measure everything that you do.
If you need to experiment with different marketing tools and sales techniques in order to get sales in the first place, that is beyond the scope of this book. There are several excellent resources available that can help you with marketing experiments. If you search online with Google, Yahoo, or MSN you will find plenty of information about how to experiment with your marketing.
Basically, the idea behind this first principle is simply stated as “Never, ever run an ad without monitoring the response.” And, you can extend that to nearly everything you do from the marketing side to mean, “Monitor everything you do to promote your business.” One of the main reasons for this strategy is also simple: “You cannot improve on something if you do not know what is working and what’s not.” For your business to grow you must measure and monitor all of your marketing and promotion efforts in order to gain an understanding of how to improve. The focus of this approach is to improve your business results in a BIG way.
Let’s work through examples of what happens when you test, measure and monitor and what happens when you don’t. Before we start with any specific strategies or tactics, you need to have a couple of definitions about testing. This is one of the most important skills you will develop in marketing and sales. Essentially, the idea of testing allows you to connect the unknown with the known. By testing you will be able to clearly see which marketing and sales tools you are using are actually working.
- Marketing test objective: TO IDENTIFY WHAT IS WORKING FOR YOU AND WHAT ISN’T, BECAUSE YOU CANNOT IMPROVE SOMETHING THAT YOU CANNOT OR DO NOT MEASURE.
- GOLDEN RULE: NEVER START ANY SALES, ADVERTISING, OR MARKETING CAMPAIGN IF YOU CANNOT MEASURE THE RESULTS.
Just by monitoring your marketing efforts, you can double your business by cutting the expenses of something which doesn’t work and spending money where something does work.
Now, let’s look at a specific example.
Advertising Testing: Example Test Development
Think about the last time you used the Yellowpages to advertise your business. Or, if you have never have, you can probably think of a business that does use the Yellowpages. And, you can probably also remember the last time you got one of the Yellowpages books.
In today’s market, there are still both printed and online versions in use. But, what is happening to both? The delivery channel has changed in the last 2-3 years. Instead of picking up a Yellowpages directory to look for a business like yours that is close by, people are using information online or over the internet instead. It is much quicker for customers or your potential clients to get information from Google or Yahoo. There is also a lot more information online. Customers have access to reviews from other clients, location information or maps, and more detail about your business than they will find in a Yellowpages book.
Do all of these recent changes mean that you should not use the Yellowpages? No, not necessarily. There may still be situations when Yellowpages advertising makes sense for you and your business.
One simple way to find out would be to run an ad in the Yellowpages books in your area – and there are usually several key providers for any geography – and test the results.
To test this ad, you will need to include a way to track customers that respond to the Yellowpages ad. One simple way is to ask customers how they heard about your business. But, customers may not always accurately recall or tell you how they heard about your products when they buy. Or, you might be busy and not have an opportunity to ask everyone.
A better way to test this kind of ad would be to include a “special” offer – coupon, offer code, discount, something free, etc. – that you can track along with sales. If a customer redeems this offer then you know they came to your business from the Yellowpages. If you also have unique offer codes in your other advertising then you can track those as well. This kind of tracking and testing will give you a view of which ads are working, how well they are working, and what kind of return you are getting on your advertising dollars.
And, you can run a parallel test with advertising in online versions of the Yellowpages or other online business directories.
As close as you can, make the two ads match. If you then compare the sales that you get from the two ads – the online version and the book version – you will know that the only difference is the placement of the ads. Once you have the tracking and detail, compare the sales from each ad to the dollars you spent for each. This will give you a perspective on which ad is working the best for your business.
And, unless you are testing and measuring the impact of your ads you won’t know if you are wasting money, not only in the Yellowpages but in other ads as well.
There are key lessons to be learned from testing your marketing and sales offers and the results you get for your business. In the Yellowpages example, one of the key things to pick up is that the MARKETING CHANNEL HAS CHANGED. The implications for you and your business are:
- You need to be on the web. Not just being on the web for the sake of being on the web.
- You have to be locally adjusted for local advertising. If someone types your business product and your city or location name, you have to be there or you will lose sales to your competition.
- Your website has to be search-engine optimized so that it comes up first or close to first in that particular search.
So what you’ve learned by testing is that
1) the internet is a channel for successful marketing and sales because that’s where your customers are and
2) the internet is a marketing channel you can use for your business.
Here are things you need to do for your business marketing on the internet.
- Make sure you have a website that is targeted to the type of business you have.
- Put in the time and effort to make sure your website is optimized for search engines – this way your customers will find you when they search.
- Use the internet to test different marketing campaigns.
- Expand your business web presence to include sales and distribution if it makes sense for your type of business.
You can learn too from large companies that have an internet presence. For example, Google and Yahoo! obviously have a huge online presence, but they have large office complexes and offline capabilities too. Another example comes from eBay. They are a big player online, but now they have retail stores too. You can take your things into the store and one of their customer service people will list and sell the item for you. So, keep in mind that the internet is important for marketing and sales, but so are your actual business locations.
When you test marketing and sales programs, keep in mind that the primary objective is to identify what’s working and what’s not working. You should test everything you do but focus on tracking and analyzing the results. Our example from the Yellowpages shows that
1) if you weren’t testing this part of your marketing campaign, you would not be able to see the shift from printed directories to online marketing and
2) you would not know the importance of having a presence on the internet.
Through testing you also have an opportunity to learn more about what you don’t know. Testing marketing and sales campaigns allows you to evaluate what you know or think you know about your customers and your business and track the importance of what you know. As your customers change, by testing you can change with them. Test results will reinforce what you do know, help you change or shift what you know, and help you understand more about what you don’t know. From testing, then, you will be able to change and improve your marketing and sales programs to make your business more successful.
As you consider testing different marketing and sales programs, think first about what can be measured for your business. Most often, most of us think about measuring results in terms of customers and sales. Increased turnover that results from a specific piece of marketing can be said to be successful. However, as you evaluate one program versus another, you will want to refine your measurements and look at the separate parts of each program. By using different levels of detail, you will have more input to help you decide what’s working or what’s not.
Let’s break down the marketing and sales process a bit further into different parts that you can measure.
- Each program will have a sales pitch. The pitch includes the words you use to communicate your offer to your customers.
- Similarly, each marketing or sales program will have a price. This is the price you put on your products and services as you sell them. We’ll talk in more detail about price and changes in price. Price is one area where testing can be especially productive for you.
- Headlines in each campaign grab the customer’s attention and get them to look further at the marketing or sales material. If you change your headlines, this can have a significant impact on how many potential customers get involved with the rest of your offer.
- The opening statement of your marketing and sales materials needs to be compelling and draw your customers in. The opening should be concise with as few words as possible, but have enough information to get customers interested. Testing opening statements can be a very effective method for fine-tuning the offer to your customers.
- Guarantees can be part of any marketing or sales program. Testing changes in the guarantee can help you determine how important guarantees are to your customers.
- Target market and media are a vital part of testing. If you think you know which types of customers are the most likely to buy your products and services, you may be absolutely correct. However, there may be other types of customers that respond in different ways to your offer.
- Packaging and bundling different products and services together will generate different sales and profit results. If you test different combinations, you can find out which ones work best.
- Special offers can be used to entice customers to act now and buy your products or services today. Part of your unique selling proposition can be translated to a special offer or promotion. As you test different special offers, it’s like any other part of your campaign. You have an opportunity to learn more about what your customers like or don’t like.
- Up-sells and cross-sells that are contained in your marketing and sales programs and campaigns need to be thoroughly tested. It is possible that one combination of up-sell or cross-sell may not work well for all of your customers. Different types of customers or customer segments may react differently to different up-sell and cross-sell marketing.
It’s important for the development of your marketing and sales programs to recognize that you should test in small increments. What do we mean by small? You will want to test one thing at a time. The main reason to test one thing at a time is to make sure you can interpret the results. If you only test differences in the sales pitch – and leave everything else the same – then you will be able to see the impact of different sales pitches on how your customers react. Otherwise, if you try to test more than one thing at a time, you won’t be able to see what’s working and what’s not working.
SALES PITCH TESTING
Any marketing or sales program that you implement will have a “sales pitch” as part of the program.
Sales pitch: MAIN SELLING PROPOSITION UPON WHICH AN ENTIRE SALES CAMPAIGN IS BUILT.
One of the key elements to remember about testing is that small changes are the basis for getting better results. For example, what will happen if you change one or two words within the sales pitch? Consider this first pitch.
“Box4Blox–The Amazing Toy Storage Box For Lego.”
Then compare it to the following.
“Finally! Discover the Secret That’s Got More Than 50,000 LEGO-Crazy Kids Worldwide Actually LOVING Clean-Up Time!”
Which one do you think drives more sales? The second one as you can tell from your own interpretation. Basically, the idea is that the first phrase describes what the product is but the second one describes the benefits or what the product does for you. You can easily see the difference when you look at these phrases side-by-side. But, it’s important to keep testing so that you continuously improve.
What do you think would happen if you changed some of the words in this last pitch statement? Would using “At last!” instead of “Finally!” make a difference? How about the term “LEGO-Crazy Kids”? What if you changed that to read “LEGO-Crazy Boys”? Testing at this level gives you an opportunity to see which part of your sales pitch have the most impact.
Another example of how to test a sales pitch comes from JustBeachTowels.com
By testing his Sales Pitch, Rob at JustBeachTowels.com was able to realize very large increases in his monthly sales – by a factor of 10! Is there any business that would not like to have 10 times more sales this month than last month?
How can we test different price levels? There is one pretty famous example from a recent website that we can use to illustrate how to test price.
There was a flashlight business that was selling products on their website over the internet. They decided to test three options and see which one sold more flashlights. Here are the three prices they tested:
Option 1: Price = $5.00, shipping and handling = FREE
Option 2: Price = $2.50, shipping and handling = $2.50
Option 3: Price = FREE, shipping and handling $5.00
Which of these three options do you think sold more flashlights? As you might imagine, the last one – Option 3 where the product is offered for free – actually “sold” more flashlights for this particular business. The charges for shipping and handling were evidently not viewed as restrictive and customers responded to the “free product” part of the offer. This offer wound up putting more revenue in the hands of the business owner compared to the other two.
We wouldn’t necessarily recommend offering your products and services for free and expecting your customers to be comfortable with paying shipping and handling fees. But, this illustrates the kinds of things you can test with price.
According to current best practices for price testing, here are a few ideas to remember when you are thinking about what to test with your pricing.
Things to work on as you test price:
- Very small changes in price can have a huge impact on your business. Try to test small changes in price first.
- The “right price” varies for everyone based on their perception of your company and their need for your product or service. Keep in mind that lowering prices too much or raising prices too much can also have an impact on how your product and business is perceived.
- Unless you and your competition are in a commodity business (where price is the only thing that makes a difference), there is always room to vary prices, at least by a little bit.
Headline testing might be one of the easiest things you can test in your marketing and sales programs. Everything in the headline can make a difference in the headline response rate. Things that make a difference in response are called response modifiers. In addition to the items mentioned above, other response modifiers in a headline might include the font used, the size of the font, the capitalization of the first letters of each word, etc. Everything in your headline can and should be tested.
For an example of how a very minor change can make a difference in your headline response, take a look at these two headlines:
Headline # 1: “Put Music In Your Life”
Headline # 2: “Puts Music In Your Life”
The only difference between the headlines is the addition of the letter “s” to the first word. The second headline greatly out pulled the first headline. In this case we believe that the second headline was more targeted on the benefits of the product. It may have been easier for customers to understand how the product enabled them to accomplish what they wanted.
Three Qualities of Winning Headlines
When headlines and subject lines apply these three qualities, they are more apt to connect with the reader – which is the true objective.
A typical approach to this kind of headline testing is to start with a headline that is working for you now. You are getting sales with the headlines you are currently using. Test one different version of this headline by making a very small change. Then monitor the results to see which one “wins” or gets you more sales. If the current copy does better than your change, then use your current copy as a baseline. For a second test, make another small change by varying something else in the headline and test the second version. If the second version “wins”, then use the second version as your new baseline. The next step would be to make a small change in this latest version and test again. In this way, you can always be testing new headlines to see if small changes make a difference.
Each tweak of your headline that results in a new baseline improves the desired outcome. Your response rate increases, you get more sales, and you are on the road to continuous improvement. While you can never know for sure why one headline outsells another, the reason is not important. At the end of the day only the results matter.
Things to work on to test headlines
- Decide which headline you want to test first. It’s important to pick a headline from one of your marketing and sales programs that is generating customers for you.
- Select a small part of the headline to change. Remember – small changes are the right way to approach testing.
- Pick a market segment or customer group to test the new headline. If the new headline gets more sales than the old one, use the new one as your new baseline.
- Continuously repeat this process in order to get ongoing improvement in sales.
OPENING STATEMENT TESTING
Why are opening statements so important? One reason – and there are several – is that most of your potential customers have very little time. It’s important to capture them on the first attempt you make. This applies to both online or internet marketing as well as offline marketing and sales. For the internet, the “average” website visitor spends about 8 seconds on any particular website. And, the time potential customers are willing to look at your materials is even less for offline marketing and sales – assuming you can get them to take a look in the first place. So, opening statements are very important because you have limited time to help potential customers make a decision about your products and services.
Let’s say that you’ve done a good job with your sales pitch, offered a good price, and written a great headline. With these parts of your marketing and sales in place, a great opening statement will be the next part of what your customers sees about you and your company. To develop better openings, a similar approach to the one you developed for testing headlines can be used.
- Start with a version of an opening statement that you are satisfied with today, one that is getting sales.
- Make small changes in the opening statement to test for increases in sales.
- Replace your opening statement if the new version beats the current version.
- Try another small change in the opening statement and test again.
- If the changes have an impact on how many sales you get, change the opening statement you use in all of your marketing and sales materials.
- Continue to test and test again, using test results to identify the best opening statement for you to use.
Example Opening Statement:
A publisher recently had a book written to guide authors and potential writers on how best to sell their manuscripts. After several tests, here is their opening statement:
Sample Opening Statement:
“Want to sell your work? Want to make more money? Would you like to know the secret to being published often?”
To test this opening statement, you could change the word work in the first sentence. What would happen if you changed the word “work” to “writing”? Or another change that has been proposed would be to change the second sentence entirely. What would be the impact if you changed the second sentence to read … “Want to get more recognition from your work?” We can all guess about which versions we think will work best, but until we actually test both versions among our real customers, we won’t know for certain. And, we may never know why one set of words works better, but remember – only the results count. Did you get more sales or not?
Guarantees are really a way for you the businessperson to assure your customers that there is little or no risk in purchasing your product or service. We are all sensitive to risk to some degree. And, we’re all skeptical at first. To reverse or address this risk, consider using some type of guarantee.
There are basically two types of guarantees: Conditional or unconditional.
You know your business and situation better than anyone. What type of guarantee do you currently offer or could you offer? Would this guarantee be enough to help your potential customers get over their skepticism and make a purchase?
There are a couple of classic examples of the different types of guarantees.
Shoe stores and online shoe retailers often offer to take a product back, refund the purchase price or give the customer store credit. The guarantee is usually conditional and based on the fact that the customer has not worn the shoes outside. When the guarantee is written, it specifies exactly the conditions under which a refund will be made.
Another type of conditional guarantee applies to the workmanship or quality of the product. For example, a recent guarantee was offered on a pair of running shoes.
“…1,000 kilometer guarantee on unitsole wear” (Source: Shoebuy.com)
If the customer is nervous about the soles wearing out on this pair of shoes, then by offering this type of guarantee the business owner can help the customer feel better about their purchase. For the running shoes, if the soles wear out with less than 1,000 kilometers of use, they will be replaced. After 1,000 kilometers, the customer is on their own.
For an avid runner or jogger, getting in about 20 kilometers per week is a quite a lot of running. To go over 1,000 kilometers in one pair of shoes would take almost an entire year. For an average runner or jogger, about 10 kilometers per week is more likely. The average runner then will have the soles of his or her shoes guaranteed for at least two years. With this conditional guarantee, the customer knows that they will have a usable product for a long time.
This type of guarantee is often quoted in terms of price. Retailers often guarantee to match a competitor’s price or offer “lowest everyday prices, guaranteed”. To complete with Coles Myer and Woolworths, Wal-Mart offers “Always low prices”. Woolworths on the other hand offers “everyday low prices”. These types of guarantees are unconditional in the sense that the business owner promises to come up with the lowest possible price and the customer can count on that as a guarantee.
You can also use unconditional guarantees to help you distinguish your business from your competition. Back in the shoe category, Zappos.com an online retailer offers the following:
Shopping at Zappos.com is safe. Every credit card purchase on Zappos.com is covered by our Zappos.com Safe Shopping Guarantee. Zappos.com takes great pride in offering a safe and secure online shopping experience. We understand that the safety of your personal information is extremely important to you. We use a wide array of electronic and physical security measures and devices to protect your personal data and credit card information from unauthorized access.
There have been efforts to increase security on many websites and online stores. If you can offer this type of guarantee to your customers, do you think it would make a difference?
As you think the different types of guarantees you can offer, remember to test them too. You must test everything to be able to see what works and what doesn’t. Generally, the fewer conditions there are as part of the guarantee, the better it will perform in helping you get your customers’ trust. Unconditional guarantees are usually the best, so the challenge for you is to find parts of your products or services that you can guarantee in this way.
There is also a performance effect that results from your offering a guarantee. We’ll cover this in much more detail later, but for testing purposes keep it in mind. If you offer an unconditional guarantee, what do you have to do in your business to make sure that your products and services have great quality? As you test different guarantees, keep in mind that each one will have different implications and ramifications for how you run your business.
TARGET MARKET TESTING
How do you know if your marketing and sales communications are reaching the right audience? One of the best ways to start is to look at a profile of your current customers that are in segments or groups.
- Target market segment: SUBDIVISION OR GROUP OF CUSTOMERS THAT HAVE DISTINCT BUT CLOSELY LINKED OR RELATED ELEMENTS, MEMBERS, OR PARTS.
For example, there are several ways you might group your current customers:
- Top 100 customers
- Top 10% of customers
- Frequent buyers
- Top customers by geography
These segments or groups of customers are intended to show you the detail behind who your most important customers are and what they like.
In order to evaluate and test target markets, see if you can answer the following questions:
- Who, exactly, is your perfect customer?
- What’s a day in the life of your perfect customer like?
- Why did they buy your product? If not, why not?
- Why did they buy from you or your competitor specifically?
- Why did they not buy from you or the competition?
- Why did they buy from you at that specific point in time?
- Why did they buy right away (on impulse) or took their time?
- If they shopped around, why did they? Where did they go?
- What do they like the most and the least about the product?
- Would they refer you to others? Why? If not, why not?
- What specific benefits do they see in your product?
Once you know more about who the most important customers are for your business, then you can begin to explore ways to find more of them. Tests of your marketing and sales material among prospective target markets are intended to show you where to get more customers. You can take one of your successful marketing pieces and introduce it to a new location, source or “watering hole” where you think your target market can be reached. Remember to try to test in small increments. You would not want to test any changes in the marketing materials or message at the same time. Testing to see how best to recruit new customers that match the characteristics of your current customers will be enough to test at one time.
Other Marketing Testing
There are many other possibilities that you must test in your marketing and sales materials. These include:
Here are a few examples from recent news and headlines that show you the importance of testing these parts of your marketing and sales communications. Large companies benefit from testing just like small companies. Remember, the purpose of testing is to continuously grow your business through small changes in parts of your programs.
PRODUCT BUNDLING TESTS
UP-SELLS and CROSS-SELLS
We will cover these in more detail as we discuss each part of the structure in your marketing and sales programs. Basically, the idea will be the same. Test, change your marketing and sales approach based on results of the tests, then test again. You probably get the idea by now. To make continuous improvements in your marketing and sales materials to continuously improve your sales and profits, you need to develop an ongoing testing program.
Marketing Testing Review and Things To Do
Basically, your testing systems will include the following no matter which part of the marketing and sales program you are testing.
From this review and these steps you will find yourself in continuous testing mode. Remember that one of the ideas we described earlier was that applying these principles consistently over time gives you what you need to drive BIG results. By testing and re-testing, your marketing strategies and tactics will begin to drive bigger and bigger sales and profit results. This will help you achieve that dividend goal and objective that you established early on for your business.