Why Do Marketers Test?

Jim Novo recently commented that few online marketers deploy testing the way it’s often done in the offline world. Jim speculates that the reasons for this include cultural issues and a lack of ideas about what meaningful tests to conduct. For me, this raised a more fundamental question:

Why do marketers test in the first place?”

You could argue that the answer to that is simple — to increase the effectiveness of marketing programs. But I think there’s another side of the coin: To improve the efficiency of marketing programs.

In the “old” world of direct marketing, where direct mail costs are significant, marketers test to determine who not to mail to. But in the online world, where the incremental cost of sending out one more email is practically non-existent, suppressing marketing messages is less of an issue.

So why should online marketers bother to test? If online marketing response rates are higher than direct mail response rates, and little opportunity to reduce campaign costs, then marketers will have little incentive to test.

The distinction — and balance — between effectiveness and efficiency is subtle. But marketers who recognize that their testing approaches have been more focused on efficiency than effectiveness will realize that they’re missing many opportunities to create and execute a strategic test and learn agenda that not improves effectiveness but drives marketing strategy.

The notion of a test and learn agenda isn’t new. But many database marketers’ agenda is undeveloped, underdeveloped, or misguided. Often, testing plans are focused on short-term and tactically-oriented questions like who should be mailed to, and which messages work better than others.

There’s a bigger opportunity here, specifically, to test to help answer more strategic marketing questions like:

  • What number of touches is best for which customer segments?
  • How can a sequence of messages help lift response?
  • How does time between touches effect response and conversion rates?

The opportunity to be more strategic with testing isn’t limited to marketing effectiveness. In many firms, it falls on the shoulders of market research to answer questions about consumer behaviors and attitudes. But far too often, market research is burdened with addressing tactical issues. Database marketers can step in and help here, and devise tests to help understand:

  • Which customer behaviors are most closely correlated with response and conversion and help define an “engaged” customer?
  • What the optimal spend per customer to increase customer engagement?
  • What is the profit per customer impact of increased customer engagement?

Database marketers — or online marketers, for that matter — won’t be able to answer these questions if their testing approaches are limited to figuring out who not to touch. Or if they don’t test at all, for that matter. Marketing needs a new mindset about testing, and break out of the confines of campaign-centric ROI test and measurement.

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