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Learning from your tests

'For small businesses, the test-and-learn approach makes perfect sense.'

Posted 8/27/12

When business owners create products or services – and the marketing plans to sell them – they often base their decisions on what customers tell them. But which is more important: What customers say? Or what they actually do?

The answer, of course, is actual behavior. And therein lies the power of a marketing trend that’s changing how millions of business owners think. It’s called A/B testing, and at its core the concept is rather simple: Test something several different ways in the real world and see what works best. Then go with that. What could be more basic?

Yet businesses both big and small trip on this every day. They survey customer preferences and base decisions on what they say. But stated preferences can’t hold a candle to actual behavior when it comes to identifying what works – and what doesn’t.

The Internet world has long used A/B testing to try out different website designs. But the concept is so straightforward and effective that it can apply to almost any circumstance where a choice must be made. And for small businesses, the test-and-learn approach makes perfect sense.

A/B testing is exactly what it sounds like. You test approach “A” and approach “B” and see which does better. The key is that you do it in the real word with real customers and real-time results. And you keep doing it with different customer segments until you have the answers you need.

Entrepreneurs are told over and over to conduct surveys and other traditional market research. But observing actual behavior is almost always a better predictor of future behavior. The hugely popular drink Red Bull is a good example. When first surveyed about it, customers called it disgusting. Yet annual sales are now in the billions of dollars.

The beauty of A/B testing is that it has no problem delivering solid answers about highly subjective preferences for such things as taste, color, shapes, images, layouts and the like. If you simply ask customers which color they prefer, for example, they’ll express a preference. But when you actually observe and measure their response to different colored products, packaging or even web pages with A/B testing, the results might be radically different.

In the real world of small and local businesses, what this means is that while many things influence consumer purchase behavior, the consumers themselves are often unaware of them.

Don’t simply ask customers to “imagine” something. You have to create it and actually let them experience it. This live testing gets the best results by far. It works even better if people don’t know they’re part of a test. You want people to behave as normally as possible. •


Daniel Kehrer can be reached at editor@bizbest.com.

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