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Business coaches with Action International use the term testing
and measuring frequently. This practice forms an essential part
of our ongoing mentoring programs with clients. What are we talking
about anyway? It’s quite simple…read on.
Why is testing important? 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.
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. Action International firmly believes 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. We at Action suggest
that our clients commit 10 – 15% of the new campaign budget
and test for the outcomes.
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? I believe you get my point!
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!
Action International is a business coaching and training company
that works with small to medium sized business educating the business
owner how to improve the sales and marketing in their business.
For further discussion on the above, or coaching services in general,
please call your local Action International Business Coach, Action
USA’s Home Office at 1-888-483-2828, or visit www.actioncoaching.com
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HOW
TO GET RESULTS FROM YOUR ADS WITHOUT SPENDING A FORTUNE
