Tuesday Marketing Notes (Number 34—May 23rd , 2006)
A B2B Marketing Newsletter for BMA Members
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Market Testing: Minimizing Risk and Expense on B2B Marketing Programs
By Eric Gagnon
What if I could tell you how many prospects would respond to your next big mailing? What if I could tell you which sales copy approach, headline, or positioning could be used in your ads, mailings, or online marketing to pull the best sales response, before you pull the trigger on a $200,000 marketing program, by spending a small fraction of this amount?
Do I possess a special gift? Nope. Am I, as George Costanza would say, a “delicate genius?” Hardly. What helps me to gauge sales response on projects we execute for our clients is the market testing we do for them—and if I can do it, then you can, too.
How much would this kind of foreknowledge about your own market be worth to you? A lot, probably, if you’re responsible for running your company’s marketing program. If you’re on the agency side, your best assurance of longevity in your client-agency relationships is your prudent care of the client’s marketing budget, and your aggressive, ongoing testing and execution of the best ways to sell your client’s product. This week and next, I’ll cover some techniques to help you integrate testing as an ongoing part of your marketing program.
Market Testing: The Best-Kept Secret of Direct Response
Interest in market testing has revived with the rise of Web-based advertising programs, such as Google AdWords, since every online advertising program is basically a series of tests, where different text or banner ads are tested against different landing pages and promotional offers to determine the best text ad headline, landing page presentation, and promotional offer—and every combination thereof.
There’s nothing new in marketing: Internet search advertising copies many of the same principles and methods that direct mailers and direct response advertisers have been using for decades—but now it’s done online without paper and ink, and using much shorter execution cycles of hours and days instead of weeks and months.
Why Test?
The most important reason to test is to minimize risk and expense when selling new products in new or existing markets, or when running marketing programs that use new deliverables and copy approaches, new publications, mailing lists, or other marketing media.
Even when your current marketing program is running well, market testing is still the best insurance you can have as a hedge against changes in your market. A marketing manager who isn’t constantly testing new sales copy, promotions, and marketing methods won’t have an ace in the hole to use in case sales response goes south on their marketing program. Testing is the best way for marketing managers and agency pros to get a firm, measurable understanding of the copy and positioning appeals that sell their company’s (or client’s) products, and the best methods and marketing media to use to sell their products.
If you don’t test, you will never know if there was more effective sales copy or a better positioning approach you could be using in your marketing program, and you will never know for sure if you can be running the best marketing media and methods to sell your products.
Given these benefits, the surprising thing about testing is that most business-to-business marketing managers don’t do it at all. Instead, they move right ahead with the latest new creative produced by their agency or consultant, and roll with the mailing or run the advertising program. When the ads or mailings don’t generate response, they try something else, or the client tries another agency—a risky, expensive, inefficient way to run a marketing program.
Measurement Begins With Market Testing
“Measurement” and “metrics” are the current buzzwords in marketing today. All of us who’ve been in direct response and direct mail for years have to chuckle at some of our friends in marketing who are just now discovering that they need to measure their marketing activities. In direct response marketing, we never even think of running any marketing project unless we can measure its result.
I’ve always been suspicious of any “delicate genius” in our business who says they can pull some ad, mailing, or other marketing project out of their brain (or some other dark place) that’s going to generate tons of sales leads, inquiries and orders merely from the power of their clever idea, without testing it beforehand.
That’s because I’m the guy who usually gets called in after the “delicate genius” advertising guy has burned out his (now) ex-client’s marketing budget. And the first thing I nearly always do is run a test to get the client’s message, media, and market targeting squared up, to eliminate these factors as potential marketing-related causes of poor sales response. Marketing is more hard work than genius, and the hard work of building most marketing programs starts with testing.
What You Can Test
Testing Positioning, Copy , and Promotions
Which of your product’s major benefits and features will be most compelling to potential prospects in your market? You can put your best work into researching, writing copy, and developing marketing programs and deliverables for your company or client, but you can never be sure which of your approaches to an ad, mailing, or Web promotion work best. You will never know how potential prospects will respond, so why not test to find out?
When we run testing projects for a client, we usually come up with three or four copy approaches we think work best for the client, using one or two concepts from our own research, and one or two promising concepts we’ve gathered from de-briefing the company’s sales reps and interviewing some of the company’s customers. Our goal is to provide the client with the unique positioning that, when joined with a compelling benefit, makes for effective copy used in the deliverable. We then test each of these approaches and count the results, and usually, one clear winner emerges.
You can also use testing to vary the intensity of the messaging and promotional offers used in your deliverables. For example, you can test “hard sell” copy approaches against softer alternatives in your deliverables, or you can test your current deliverable against one that aggressively compares your product’s features and benefits against your competitors, by name, using feature charts and bold copy. You can test new pricing and promotional offers to limited numbers of your customers to measure sales response, before deciding to roll these promotions out to your larger base.
Direct mail and Internet advertising work best (compared to print advertising) for testing copy and positioning, because you can control who receives your mailing piece or Web page, how many receive it, when they receive it, and you can clearly link any of these elements to the mailing piece, keyword, or Web page seen by the prospect.
Testing Marketing Media
Direct mail and print advertising are the mainstays of most B2B marketing programs, and testing is very important for each of these forms of marketing media. Testing is especially important if, for example, your company has generated most of its sales response using one or the other of these media, and you need to expand your marketing program to new media. The way to begin is not to jump right in with an expensive print advertising campaign or direct mail program, but to test on a much smaller scale, measure the response, and make your decisions based on this response.
Testing New Markets
When moving your company’s product into new markets, a smart, well-executed testing program not only helps you determine the most effective sales copy presentation, media, and promotional offers to use, but will also help you determine if you can generate sufficient sales response from a new market to make it a profitable part of your company’s sales effort.
Testing Start-Ups and New Product Launches
Market testing during the beta and pre-launch stages of a start-up venture (or for a new product launch in an existing company) can be executed at a pennies-on-the-dollar fraction of the start-up’s ongoing marketing budget. Positive results from market testing establishes the features, benefits and positioning that works best for the product, builds confidence among the start-up’s founding team, and saves tremendous amounts of money that might have been wasted on ineffective advertising or other marketing projects. “Informal” market tests can be done during the business plan development stage, even before the product is actually built, to establish assumptions used for sales estimates in the plan (more on this in Part 2 next week).
Testing Mailing Lists and Publications
Because direct mail plays such an important role in many business-to-business marketing programs, mailing list tests are the most common market test activity. A small “nth name” sample portion of a large mailing list can be tested, and the response from this small test will usually reflect the overall response from a mailing to the entire list. Mailing lists—especially those from a major trade publication in your industry—are a reasonably good representation of your market, so copy and promotional approaches used in your direct mail list tests can often be used in print advertising and other marketing media.
You can also test the viability of adding print advertising to your marketing mix, by testing either new types of publications, or new advertising concepts and layouts. Market testing works best for advertising that is direct response oriented, that is, an ad that clearly describes your product and gives the reader a compelling promotional offer in its call-to-action that can be tracked and measured by phone calls or Web clicks back to your company. While brand awareness and “image” advertising can be tested using surveys, this kind of advertising is clearly not as measurable as advertising that makes an offer that can be acted on by your reader.
Testing Online Pay-Per-Click and Banner Advertising
Pay-per-click (PPC) and other Net-based advertising programs are ideally suited to flexible testing and exact measurement of user response. For a modest expense, you can set up a PPC keyword search ad program on Google, Yahoo, or MSN and, in a day or so, get a handle on which sales copy, landing pages, and promotional offers work best for your product. Where it might take a month to receive responses from a mailing or ad placement, you can get invaluable testing feedback online, over just a few days.
Because you can link your test ads to specific, trackable landing pages, PPC advertising is also a very useful method for developing the best headlines, body copy, and other sales messages and promotions to help you sell your company’s products. The stripped-down nature of text-only online ads mean that users vote on which headlines they find most compelling by clicking on them.
There is no reason why a headline with a strong sales benefit that works well online couldn’t also work well in print advertising or direct mail or any other offline marketing program, which makes PPC ad programs a wonderful testbed for trying your new headlines and copy ideas. This benefit alone makes online advertising a highly useful tool for helping you develop the most effective copy for your company’s marketing deliverables.
Next week, in Part 2, we’ll cover common types of B2B market testing activities, how to measure test response, and how to respond to common test result scenarios. . .
Comments? Questions? Send them to me at: eric@realmarkets.net
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Attention Marketing Managers:
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Think you should be spending less and getting more from your current marketing program? Tired of hearing empty “branding” promises from your ad agency that never seem to translate to actual, measurable sales results?
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Eric Gagnon (eric@realmarkets.net), is president of GAA (www.realmarkets.net), a sales and business development consulting firm, and is the author of The Marketing Manager’s Handbook, the master study guide for the Business Marketing Association’s Marketing Skills Assessment, Skill Builder, and Certification (MSA/B/C) programs.
For more information on The Marketing Manager’s Handbook, available to BMA members at a special discount, link to:
http://www.businessmarketinginstitute.com/book.html
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Test, Train, and Build Your B2B Marketing Skills for Better Sales Success: BMA Announces New Assessment, Training, and Certification for B2B Marketing Managers
For more information on the new BMA Marketing Skills Assessment, Skill Building and Certification (MSA/B/C) training and professional development program, visit http://www.businessmarketinginstitute.com
