Testing: The First Rung on the Ladder of Your Financial Success

Testing is a powerful principle that should be the driving force behind every piece of marketing that is undertaken. Testing eliminates the unnecessary risks that rob you of your financial success.

Traditionally, part of the entrepreneurial profile has been to risk all in search of a dream, but this is a very different era. The marketing techniques available to you today, especially online, mean that you can test everything, small scale, before you put your shirt on it!

Take direct mail, for example. We all know, when done correctly, this method of marketing can be highly effective. It’s on that basis that many a company has spent thousands of dollars on brochures, sales letters, huge mailing lists and postage to send it all out. All without doing a test first!

A few days pass and a trickle of enquiries and a handful of new business leads come in. More days pass and there are one or two more enquiries. The horror begins to dawn. That’s it! The pendulum swings and the business owner decides direct mail is rubbish and he/she will never do it again!

The good news is that there is an alternative to taking massive risks or none at all and it’s called testing. This is where even the ‘failures’ are successes of a kind, as you learn what works for your business without losing all your profits in the process. It’s not difficult.

• You do your research and find out who you should be contacting.
• You prepare your mailshot.
• Instead of trying to reach the multitudes, you test 500, 1,000 or even 1,500 people.

Rather than spending $25,000 in one hit, you spend $800-$1,000 and yes, you may lose that money, but it’s nothing compared to the first scenario. So it didn’t work as well as you hoped but at least you still have $24,000 to test something else that might.

What if your small test did work to some degree? If you sent out 1,000 pieces and got 10 sales that’s a 1% response. It may not be brilliant, but at least you can assess whether you’ve recovered the cost of the mailshot. You may have even made a profit.

From the above metric you can safely reckon that if you send 2,000 you will get 15-25 responses and 10,000 will give you about 100. How does that compare with your investment?

If your initial test is not quite what you had hoped for, but still too good to scrap the idea altogether, you could try another one but make an improvement in some way. It has been known that one word changed in a heading has greatly increase response rate.

Test one new marketing approach every month for a whole year. You may discover five of those methods don’t work well for your business, but you’ll still have seven marketing methods, now proven, with which to grow your business.

Similarly, before rolling out a full blown ad campaign, test small. If the publication’s salesperson suggests your ad will be more effective if you run it for two weeks instead of one, don’t you believe it! If it hasn’t worked in the first week, it’s not going to suddenly do something different in the second!

Your website is great ground for testing too. If you’re getting a two percent conversion rate on your sales page, perhaps a change of headline will increase it by another one percent; an improved product shot may get you another half percent and a guarantee - one percent more. This may not seem much at first, but imagine what would happen over time.

The principle of testing isn’t new. It came out of the direct mail and advertising industry decades ago. So, it’s quite surprising that so few business owners actually test their marketing ideas first!

How else will you find that on-going, ever-growing stream of new business you’re looking for?