What is A/B testing and how can it help you make more money?
Have you ever wondered why your online customers start bouncing more and more? Are you losing business despite your efforts to innovate? Are you struggling to improve the conversion rate of your product? A/B testing might be the solution you are looking for. For anyone who is in the online business, it is probably a term you hear 20 times a day. But beyond the buzzword, A/B testing is a powerful marketing and product design tool.
According to Wikipedia “A/B testing, split testing or bucket testing is a method of marketing testing by which a baseline control sample is compared to a variety of single-variable test samples in order to improve response or conversion rates. A classic direct mail tactic, this method has been recently adopted within the interactive space to test tactics such as banner ads, emails, landing pages or even entire websites. For instance, on an e-commerce website the purchase funnel is typically a good candidate for A/B testing, as even marginal improvements in drop-off rates can represent a lot of additional sales.”
Behind this very complex definition, A/B testing is just what its name says: the comparison of two things A and B using a predefined metric to measure success. In a Darwinist approach, the best wins and is applied in the real world. Apply that selection process to your different products and to their different components and you will be iteratively building a high-performing product portfolio.
you have been weighed on the scales and found wanting;
Book of Daniel 5:1–4
A/B testing is not something new neither is it limited to the online business, although the web has given it a completely new dimension as the interaction with customers has become more transparent to companies.
My first encounter with split testing goes to more than a decade ago at Synovate where we had prototypes of consumer goods tested by two focus groups. Their feedback was collected and their behavior recorded for later analysis. Consumer goods, however, stop giving any insight on how they are used once they pass the cashier boot. The only indication of a product’s success is the sales figures. If you are selling cosmetics for example, once it passes the cashier desk you lose track of the customer’s behavior. Therefore you can’t know whether that customer used your product or just threw it away after the first use. Of course, your sales figure will show you if something is wrong, but it might be too late and the costs can be substantial.
Online products, on the other hands, can be monitored in real-time and all-the-time. Consumers’ behavior is recorded as it happens and we can know what they use, how many times they did so and even from which part of the globe they’re using it. All that information accessible almost instantly.
The benefits of A/B testing do actually reach beyond the testing itself. It is a pragmatic way to force the reflexion around the impact of a decision on the bottom line. Thus allowing for a better prioritization and giving an empirical dimension to any discussion. Any data-driven thinker will love it. For anyone who has suffered from endless meetings discussing the same matters without ever going beyond the statu-quo, it is a powerful enabler to enforce decisions “two options” at a time.
A/B testing can give business insight about what works and what doesn’t. It is the antidote to guess-driven decisions that can kill your product in the prairie of the adoption curve. One of A/B tests’ major strengths is that it allows to test changes and monitor their performance on a live website, significantly shortening the feedback cycle and focusing your product development effort.
