Last year, Facebook made a groundbreaking decision to forego significant ad revenue in favor of accurate measurement. Instead of a “one-size-fits all approach,” the debut of its conversion lift measurement helps advertisers determine conversions versus clicks. At its core, this includes a “test” group who see ads and a “control” group (think of it as a certain percentage of Facebook customers that never gets the ad). The only way to know the true incremental lift of the Facebook campaign is to compare test and control group lift. For instance, how do you know that people who convert via Facebook would not have converted anyway? Compare, test, and control is the (only, really) answer.
But wait a minute, doesn’t this mean that revenue is lost in the name of measurement? Yup. Is this crazy? Nope.
This is a brave example, but it’s one that makes more and more sense. Running every marketing campaign, product feature, and new marketing strategy as an experiment with test and control groups is the only way to know for sure that your marketing works and has net incremental value. Testing shows if what you’re doing has the results that you intended and if you gained attribution.
For instance, McKinsey & Company recently reported that “a leading apparel retailer we worked with went through four different iterations of a next-product-to-buy email until it found the winning formula, which ended up yielding twice the impact of the first iteration.” The first requirement to being agile and improving quickly is the ability to measure if what you are doing works or not. This is what a test/control strategy buys you.
“Always be testing.” Should this be the new mantra for marketing organizations? You wouldn’t dream of not performing A/B testing for your website. The same should go for marketing across the board.
Here’s a classic example that most marketers will recognize. Many companies just send out way too much email. Maybe it’s an email every day or multiple emails per week—or even multiple emails per day.
These companies are essentially addicted to sending all of these emails and deriving a certain amount of revenue. They often reject any ideas to try something new and more targeted due to the concerns over taking a hit to that revenue. This is, of course, a valid concern and there’s a reason for that: They don’t have a “testing-first” culture. Since every new campaign or change affects the entire customer base, a single mistake can be very costly. Carving out a small percentage of their customers for quick-iteration testing and control groups is the answer to this Catch-22 and the opportunity to start moving the needle.
Unless the concept of “always be testing” and having control groups for every marketing strategy becomes a, well, strategy, a marketing team will be hamstrung. If you are committed to modernizing your campaigns, the first thing to do is make an executive decision that a small test group (say, 1 percent of your customer base) is a reasonable investment. In return, you can gain confidence and an opportunity to develop marketing strategies that really work. By failing fast you can succeed faster–and achieve in a few months what would otherwise take years (or infinity!)
The benefit to testing first is also holistic: The marketing organization, analysts, and IT can all come together to start implementing new marketing strategies at a rapid rate by deploying them to smaller testing groups—all without worrying about negative business impact on the overall customer population. It becomes like a pipeline. And the moment you can prove a strategy works in a small percent of the population, you can now deploy it with confidence across your whole customer base.
In fact, it’s a strategy that will increase revenue, decrease conversions, increase engagement, and more. Plus you don’t just hope it’s going to work; you know it’s going to work.
If managing all of that sounds complicated, this is where ActionIQ comes in. Our CDP Marketing Activation Platform simplifies sophisticated testing at scale, giving your organization the ability to spend their time thinking about marketing strategies and leaving the details to the technology to manage.
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