How an experimental mindset can be a competitive advantage
If your competitors are still taking a seat-of-the-pants, gut-feel approach to marketing, you could snag more market share by methodically testing new ideas and following the data. You can do this by setting up experiments in the areas of content marketing, lead generation, sales strategy and customer retention.
Experimentation: the key to growth marketing
To empower marketing to drive growth in your company, you need to take the scientist’s approach: formulate hypotheses, conduct experiments, gather data and take action based on what it reveals. Instead of relying on gut feeling and “what has always worked before,” you can use data-driven experiments to iterate your way to more effective marketing.
Here’s what’s especially attractive about this strategy: Whether you work for a Fortune 500 company or a start-up, you can still conduct and learn from marketing experiments. No special technology platform or expertise is required. Just a willingness to follow the data and learn from it.
What are marketing experiments?
Growth marketing is an approach to attracting, engaging and retaining customers that is based on relentless experimentation and an intense focus on discerning the evolving behaviors and motives of your customers.
In today’s uncertain world, marketing experiments use data collected from interactions with customers to drive continuous improvement of marketing results. They offer several important benefits to marketers who are struggling to grow their businesses:
- They help you make better-informed marketing decisions. Over time, better decisions lead to growth, which can help you build a bigger base of support for marketing within your organization.
- They enable you to discern what’s working with your audience, in your market at this time – a combination of factors that is unique to every company. It’s dynamic, constantly evolving along with customer needs, preferences and behaviors. This is much different than the static approach that most marketers have traditionally used – which is experiencing a rapidly diminishing rate of return today.
- Marketing experiments help you to provide an improved customer experience because the data they provide empowers you to understand their needs at a much deeper level. Done right, growth marketing and experimentation can help you to deliver highly personalized experiences to your best customers.
- They help you to become a more agile marketer. Frequent experimentation enables you to figure out what works for your business and then iterate quickly to improve and scale your results. As the needs of your customers evolve, you can quickly respond and even anticipate their needs and behaviors.
Marketing experiments put you in control of your marketing spend. They enable you to prove the ROI of your marketing actions. Most importantly, they give you a measurable way to try out new ideas, which is incredibly important in today’s over-messaged world.
Without a data-driven model of testing and experimentation, you’re gambling with your marketing investment – and the odds are stacked against you.
How to organize a marketing experiment
Here are five steps to organize a marketing experiment:
Step one: Set an objective. What is the goal of your experiment? Most marketing experiments have one of two objectives: Optimizing performance or unlocking growth. Which will you focus on? Some examples include increasing registrations for a webinar series, improving a landing page’s conversion rate or growing the subscriber base of your newsletter.
Step two: Define a measurable hypothesis. If you change one element of your marketing strategy, what do you predict will happen? What’s your theory? Consider phrasing your hypothesis like this: “I believe that (action) will (predicted outcome) because (the reason this outcome will happen).” What KPIs will you use to measure the results of your experiment? What measurements will yield the most meaningful data based on your objectives?
Step three: Run your experiment. Here’s an example: Let’s say you want to test two subject lines for an email campaign. You select one segment of your email list and divide it in half. One receives the message with your existing subject line, while the other group receives an email with a new subject line that you theorize will perform better.
Step four: Analyze the results. After one week, compare the open rates of the two segments to determine which subject line was more persuasive. What insights can you extract from your data?
Step five: Iterate. Based on what you learned from your first experiment, how will you keep the momentum going? How will you iterate and further improve your email open rates through a series of A/B tests of other message elements? Use what you learn from each experiment to make additional tweaks, one at a time, measuring their impact each step of the way.
The agency connection
You may be asking yourself, “Why should I pay a marketing agency to experiment with my budget? Shouldn’t they know what they’re doing?”
In a world where nothing is changing, tried-and-true tactics may work very well. But that doesn’t describe the world we live in today, of course.
Customer needs, behaviors and preferences are constantly evolving. The only way to truly understand what resonates with them is not to guess at their needs – which, unfortunately, is still a popular approach – but to use marketing experiments to discern what actually works.
In today’s environment, that is the most reliable path to growth.
Marketing experiments in action
Stay tuned for part two of this article, where we will explore several examples of marketing experiments.
Meanwhile, contact us if you have any questions about marketing experiments and how to conduct them.