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Testing and Measuring

Business coaches use the term testing and measuring frequently. This practice forms an essential part of ongoing mentoring programs with clients. What are we talking about anyway? It’s really quite simple.

We don’t realize it but we test everything in our daily lives. You always take a new car for a test drive before you sign on the dotted line. When you go shopping at the supermarket, clerks are standing in the aisles with samples for you to test before you buy. Waking up in the morning and checking the weather before selecting your clothing for the day is also a form of testing. See…we do it all the time…we just don’t think about it.

Don’t Commit Your Budget without Testing First

Yet businesses persist in embarking on expensive marketing campaigns with little or no idea of the outcome. These same businesses will spend thousands of dollars on an ad campaign and hope they get a response. I firmly believe in testing a new ad campaign before the majority of the budget is committed. It may be a whale of an idea but face it, no one knows with certainty, the outcome of a daring new campaign.

The Taco Bell Chihuahua is a great example of an idea that didn’t work. Despite heavy use of the talking dog, Taco Bell sales were stagnant. Interesting, a whole lot more Chihuahuas were born, but not a lot of burritos. Now they have returned to showing the product and their sales are growing again. I suggest that clients commit 10 – 15% of the new campaign budget and test for the outcomes.

Take Your Advertising on a Test Drive

This then leads to the balance of the phrase testing and measuring. There is little point in going to the trouble of conducting a test in the first place unless one follows through with some type of analysis of the results. Imagine taking that new car out for a test drive and not paying any heed whatsoever to the quality of the ride, the noise levels and the engine performance. Not reasonable…is it?

You would instantly compare this new car to your old one or other new cars you were considering…wouldn’t you? You would have your own form of measurement to compare the car with others. Your taste is a form of measurement when you try those samples in the supermarket. If you lost your ability to taste…why bother trying the sample at all?

Measurement and Analysis

Now, back to our business analogy…there is no point in testing the outcome of any type of marketing campaign with no measurement of the outcome. Careful measurement and analysis of the results of a test campaign will provide much needed information on which to base decisions. The results of the measurement will quantify the success of the test campaign. The results can then be extrapolated to test the soundness of the campaign.

Example…a test mailing to 500 households yields 10 responses. Each response results in an average sale of $150 with a margin of 40% that adds $60 to the company’s profits which is $600 overall ($60 X 10 responses). Let us assume the overall cost of the mailing is $1 each or $500 in all. The company then made a net profit of $100 ($600 profit less costs of $500). This campaign appears to be a winner!

Start Testing and Measuring Now

Now is the time to start your advertising campaign by testing and measuring your ads. Set up a system to inquire where customers hear about you. Then run the ad, but change the headline every issue until you find the best response. Track the results and find out which headline has the best draw. Next, change the offer each issue until you find the one that works the best.

You are now a marketing genius! You have created an advertisement that consistently produces results and you are measuring those results.

Set up a call with us for help with your testing and measuring.

Jim Shumate
About the author

My business coaching and consulting business wraps all my experience into one package. My goals are to help you meet your revenue objectives.If you have a challenge and need an extra pair of hands, give me a call at 727-204-0035.