Last week, we discussed two dumb mistakes that companies frequently make and tonight we are going to discuss two more:
It is extraordinary to me how many companies fail to Test, test, test before they take products to market, they don’t test the packaging and they don’t test their advertising messages. Add this to the discussion we had last week about company’s lack of understanding of who their customers are and it is not surprising that so many companies fail.
They bet their destiny on arbitrary, subjective decisions. This is unfortunate for a number of reasons. We have an obligation to put every important marketing question to the only people who count: customers and potential customers. How do we test these areas? By testing a number of alternative options of our products appearance and packaging against each other and the competition, how one price performs against another, test one advertising concept against another, test one headline against another, one TV or radio commercial against another, one follow-up or up-sell against another.
The point is when you test one approach against another and carefully analyze and tabulate the results, you will be amazed that one approach frequently substantially out performs all the others by a tremendous margin. You will also be amazed at how many more sales or how much larger the average orders can be by doing these simple evaluations. The purpose of testing is to achieve maximum performance from every marketing effort.
If each of your sales people averages 10 calls a day, doesn’t it make sense to find the one sales pitch or package that lets them close twice as many sales and increase their average order with the same amount of effort? You can easily achieve immediate increases in sales and profits merely by testing. Tomorrow, have your salesmen try different pitches, different hot-button focuses, different packages, differently specially priced offers, different added value or upgrades, different follow-up offers, etc.
Each day, review the specific performance of each test approach then analyze the data. If a new twist on your sales approach out performs the old approach, doesn’t it make sense for every salesman to start using this new approach?
Any positive or negative data can help you to dramatically impact the effectiveness of your sales efforts. But do not stop at merely finding those approaches, offers, prices, or packages that outperform the others. Once you identify the most successful combination, your work has just begun. Now you should find out how you can do even better, keep experimenting to come up with even better approaches that get greater results. Test your prices. Different prices often outperform one another on the same product by an enormous margin. The value proportion is the key. What is the right price for this value proposition? Sometimes the price may need to be lower, often higher. Only testing will determine what that magic price is. Probably for a lot of reasons: psychological image of value, perception of quality, etc. Every situation is unique, so you have to test several different prices. You will be amazed at the difference in profit and total orders one price will produce over another.
Testing applies not merely to prices, but to every aspect of marketing. If you run ads in newspapers or magazines, test different approaches, different headlines, different hot-button emphasis, different packages, different rationales, different pricing, and different added value…… on top of the basic offer. Test different directives to the reader or listener on how to respond and what action to take. Test positioning in the front, back, right, or left-hand side of the page. Test where your commercials run.
Make specific offers and analyze the number of responses, traffic, prospects, and resulting sales for each specific advertisment. Then compute the cost-per-prospect, cost-per-sale, the average sale-per-prospect, average conversion-per-prospect, and the average-profit-per-sale. This reveals the obvious best options.
Remember, salaried salesmen cost you the same fixed amount, whether they make one sale a day, three sales a day or more. An ad costs you the same amount of space, production time, or air time whether it produces 100 prospects, 1,000 prospects, or 10,000 prospects. Therefore, it stands to reason that you should test different ad approaches and find those that out perform all the others, then use those approaches to maximize your investment.
Test everything……………………………………………. starting right now.