Business Coaches often use the term testing and measuring. This practice forms an essential part of our ongoing mentoring programs with clients.

What is Testing and Measuring anyway? It’s quite simple…read on.

Why is testing important?

We don’t realize it but unconsciously, 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 choosing what you’ll wear 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 advertising campaign and hope they get a response.

I firmly believe in testing any new campaign before the majority of the budget is committed. It may be a crazy idea to some… but, face it…no one knows with certainty, the outcome of a daring new campaign. I suggest that clients commit 10 – 15% of the new campaign budget and test for the outcomes.

There is little point in going to the trouble of conducting a test in the first place unless you follow through with some type of analysis of the results. Imagine taking that new car out for a test drive and paying attention whatsoever to the quality of the ride, the noise levels and the engine performance.

The truth is, 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 think 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.

 

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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. These results can then be extrapolated to test the soundness of the campaign.

For example, consider 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. This means $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!!

As a responsible Business Coach in Melbourne, it is my desire to help you to understand and apply the right type of strategy that will lead to winning campaigns in your business.