The Value of Testing in a Tight Economy

It’s a common fact. Times are tough for marketers.

Most likely, you’ve heard some of the following lines. They’re some of the most common gripes voiced by executives just before dropping the budget-slashing bombshell.

Our response rates (sales) are down, so the marketing budget is being cut. Get your response rates (sales) back to where they should be and we’ll talk.

To certain executives, this actually makes sense. You can’t spend money if you’re not making money. But others, the wise ones, know that the time to spend more marketing dollars is when sales are down.

A vehicle running on empty needs more petrol to win the race, especially when there are mountains ahead. Unfortunately, you can’t always get the person signing the checks to see this. So, you look for shortcuts, and stretches you driven before and know to be easy on fuel.

Here’s an idea: When the marketing budget is cut, take time to concentrate on segmentation and testing of the customers you already have in house. When you hone in on a specific market or audience, you can specialize your offer, messaging and tactics to specifically appeal to their wants and needs. You just may find your loyal regulars ready to spend extra, for the something more you suddenly have to offer them.

For example, say current market conditions aren’t stopping “Acme Electric” from launching a new product. With a keen eye on the markets most receptive to its messaging, and just the right hot buttons to place in front of decision makers, Acme is engaged a financially responsible and finely-tuned launch.

“Gaining and maintaining a leadership position in the marketplace is a 24/7/365 effort,” explains Monte Roach, business leader, Acme Electric. “What we can’t afford is to miss opportunities or lose market share because our marketing is out of sight and therefore, out of mind. Our competitors are facing the same issues in this market – it’s who does the best job in a slowdown that wins in the long run.”

No, we can’t afford to make that offer!” (Or, worse yet “We can’t make any offers.”)

Be the hero your clients need in this challenging economy. Show them how the creative use of affordable offers can substantially contribute to their growth.

For example, in gourmet food—an area where you’d think spending would be coming to a grinding halt – we discovered how simple offers earned generous orders. Looking back at 12 months of e-mail promotions for a particular gourmet client uncovered the fact that the top 10 most successful campaigns featured free available product, or savings that could be offered without slicing into profits on specific, popular products. The open and clickthrough rates for these campaigns were double or triple compared to the typical tightfisted campaigns. To ignore this invaluable data would have been villainous.

“We don’t need to test. Our marketing strategy is working just fine.”

They say what you don’t know won’t hurt you. But it’s always wiser to understand what you do and don’t know so you can plan accordingly.

Resistance to testing formats, offers, messaging, copy platforms, segments, creative, media channels, etc. is not uncommon, especially for organizations that have been handling their sales and marketing efforts the same old way for decades.

It’s true, there is a risk involved in testing new ideas in an effort to “beat the control” and increase response rates. Testing takes an investment in time and resources, and often additional funds. However, the outcome is often worth the risk.

You want to test, not only to increase your ROI, but also to learn. The more you know about what works best, the better you can market to segments that emerge as your marketing programs proceed. As the late direct marketing guru Dick Benson said, “You’ve got to determine if the information you can reasonably expect to gain is really worth the expenditure.” If it proves to be, you win.

For example, a not-for-profit faced an economic climate that could impact the typical success of its annual holiday appeals. They were urged to test a new direct mail approach against its time honored control. The ultimate success of the control-beating test—generating a 25% increase in individual giving—was due to several new tactics:

• People are more apt to donate if there is a freemium included.
• The use of the emotional copy platform brought a fairy tale story, and ending, to life.
• A two-part mailing keeps this cause on the minds of donors twice as long as the typical one-time mailing.

Plus, thanks to testing a new list, more than 500 individuals became first-time donors.

When your fresh marketing ideas are turned down by nay-sayers or provincial politics, don’t feel defeated. Simply adjust your game plan to focus in on specific markets, audiences or objectives; be a hero to your prospects with meaningful offers; and test, test, test to learn and position your organization for growth.

Grant A. Johnson ([email protected]) is CEO of Johnson Direct LLC, Brookfield, WI.