Power Testing to Profits

If you are a startup, small business or manager with your neck in the noose of a deadline, then hear this: You can design an effective test even if you don't have the time or budget of a big marketer.

I'm often asked what's the "best" way to test a direct marketing program before committing to a rollout. I confess, the answer depends entirely on who's asking. My larger clients have the full resources of marketing, finance, credit risk, IT, money and especially the TIME to develop statistically valid tests that derive near-guaranteed rollouts. Do you? Well you may not need a "statistically valid test" to get the direction you need right now. Read on.

"That sample's not large enough to be statistically valid."

You've heard it and I've heard it. I've said it myself more than once. Let's forget about all that for now. Don't get me wrong. Statistical testing and validation are indispensable rules to any serious marketer. Ignore these axioms for too long, and you will regret ever doing what I am about to suggest.

What I am about to tell you is a method that can get you into the ballpark where you'll be able play the game of more scientifically accurate and reliable marketing. Through 20 years of testing, I've found that statistically valid numbers are important and can be established when the market is established, and somewhat stable. However, the practical use of testing comes from the direction the market will give you right away, if you know how to ask. Advertising direction is far better than statistical data because you get actionable information on several test variables faster. Your consumers will tell you if you are on the right track, if you know how to listen.

Power Testing

At the start of a new direct marketing program, you need to find your winning control messages fast. You can test things like paper stock, fonts, color and other tidbits of your packages to improve later, but first, get to the things that matter most, such as your list, offer and creative. Think of setting up high-performance Power Testing to get you the direction you need.

Here's an example of how we might use Power Testing to find a winning "groups" or even an initial control from a 30,000-piece mailing. The old 40-40-20 direct mail rule is a good tool here. A direct mail package's success typically relies 40 percent on the list, 40 percent on the offer and 20 percent on your creative. I've weighted 30 test cells below with that in mind:

  • LISTS: Acquire five lists at 6,000 quantity each.
  • OFFER: Establish three offers: Offers A, B and C); and
  • CREATIVE: Test two package formats (Package X, Package Y)

It's true, a 1,000-piece sample is statistically unreliable but we're not looking for statistical validity here. All we need is a direction to take. The market can give you an idea of what direction to take, and you can execute on the winning test groups. Then you can progressively roll out on the winning lists and offers, refining your creative as you go. The important thing is that you're getting to the best list, offer and creative executions as fast as possible.

Power Testing is a great tool, but you need to have a relentless discipline over the list, offer and creative variables:

* Lists. Do focus on lists that will provide you the capacity for a profitable rollout. You may be tempted to throw in the free list of 3000 names you got from Uncle Larry's website. Don't do it. Everything you do should be geared toward a profitable rollout. You can always save a portion of your budget later for those periodic opportunities that are too good to pass up.

* Offers. The right offer gives your target audience a reason to respond. Determining the right offer requires careful consideration of your audience and what excites it. Start with these basic offer categories and brainstorm to get inside the head of your recipient:

  • Product related hard offers such as discounts or free shipping.
  • Product related soft offers like a free trial of your product or service or a white paper.
  • Contests and sweepstakes can work very well, especially when the prize matches with your target psychographics.

Remember: Offers are an emotional driver. The more passion you can put into your offer, the better.

* Creative Copy Platforms. It's important to test copy elements that address both sides of the human psyche-the emotions and the intellect.

  • Emotional copy: Use a letter format to be more personal and emotional. Ask yourself, what emotions will drive the decision? You may decide to test different approaches based on anger, fear, greed, exclusivity or salvation to reveal which emotion works best.
  • Intellectual Appeals: Test a cost benefit against a productivity benefit with two different copy platforms, or test different leads based on different benefits. Try different benefit statements to create a variety of logical reasons to respond.

Most importantly, after you conduct your test will you be ready to act on it? Your competition may if you don't. Whenever you receive market information from testing, it's important that you are able to respond quickly. Think ahead! Those 30 test groups will provide valuable information on three critical categories. Design a matrix of your test cells and paste it up on a wall. (Trust me, it is more effective than looking on a laptop.) Recruit the best ones in your brain trust to anticipate the potential results and then analyze the actual results. You should be ready to act on any of the list, offer and creative scenarios for your next mailing.