{"id":84176,"date":"2017-07-30T11:38:23","date_gmt":"2017-07-30T18:38:23","guid":{"rendered":"http:\/\/thegood.com\/?post_type=insights&p=84176"},"modified":"2023-09-14T09:34:12","modified_gmt":"2023-09-14T16:34:12","slug":"focused-consumer-testing","status":"publish","type":"insights","link":"https:\/\/thegood.com\/insights\/focused-consumer-testing\/","title":{"rendered":"The Iteration Engine: How Focused Consumer Testing Leads to Compounding Growth"},"content":{"rendered":"\n

What is it that makes it so easy to purchase from Amazon? How have they achieved total dominance in the ecommerce space? Three words: focused consumer testing<\/em> leading to compound growth.<\/p>\n\n\n\n

They\u2019ve figured out exactly what their customers want and then given them exactly that. They know that before making a purchase, potential customers want to read reviews, see multiple pictures, compare to similar products, have questions answered, and be able to seamlessly purchase. They\u2019ve put all those things together into a single page, enabling their customers to research and purchase in one step.<\/p>\n\n\n\n

\"consumer<\/figure><\/div>\n\n\n\n

Amazon determined what their customers wanted through consumer focused testing. They haven\u2019t guessed or relied on gut feeling. They haven\u2019t randomly tested variations on pages and products. They\u2019ve strategically and systematically used data and consumer testing to determine what converts most effectively.<\/p>\n\n\n\n

As Chris DeRose told Investor\u2019s Business Daily<\/a>:<\/p>\n\n\n\n

As Amazon pursues growth through small experiments, they have tried to use data to trump intuition. The company culture embraces experimentation and Bezos recently said at a shareholder meeting that 99% of all innovations at Amazon are incremental. The company relies on “Testing in Production,” or TiP, methods such as A\/B testing and ramped deployment. By showing user group “A” a different version of a Web page than group “B”, the company can measure how long they stay on the site, how much they spend, etc.<\/p><\/blockquote>\n\n\n\n

Amazon analyzes, hypothesizes, tests, and then iterates. They don\u2019t try for home runs or stratospheric growth. They take small bets, leading to incremental improvements, ultimately creating compound growth.<\/p>\n\n\n\n

Bottom line: Amazon has used consumer focused testing and then incremental consumer experience changes to create an amazingly user-friendly ecommerce experience, leading to high conversions and massive long term growth.<\/strong><\/p>\n\n\n\n

If you want to experience ecommerce success, you need to pursue the same strategy as Amazon. Today, consumers are more empowered than ever and if your consumers have trouble engaging with your site, they\u2019ll simply move along and won\u2019t buy from it.<\/p>\n\n\n\n

We\u2019ve grown accustomed to seamless research and purchase experiences, which means that if you can\u2019t keep up and don\u2019t provide an exceptional consumer experience, they\u2019ll buy somewhere else.<\/p>\n\n\nIf you can\u2019t keep up and don\u2019t provide an exceptional consumer experience, your consumers will buy somewhere else. <\/a><\/span>Share on X<\/a><\/span>\n\n\n\n

So how do you create that beautiful ecommerce experience? Focused consumer testing.<\/strong> Focused consumer testing is designed to allow for incremental improvements to the consumer experience, which in turn increases conversions. Over time, this creates compound growth that leads to big<\/a> revenue increases. It\u2019s not fast and it\u2019s certainly not sexy. It probably won\u2019t get you featured in marketing blogs. But it will generate results, which is what really matters.<\/p>\n\n\n\n

What Do We Mean By Growth?<\/h2>\n\n\n\n
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If we\u2019re not careful, we can land on the wrong definition of growth. So let\u2019s start by talking about what we don\u2019t mean.<\/p>\n\n\n\n

One Time Spikes<\/h3>\n\n\n\n

Every marketer dreams of checking the numbers one morning and seeing a massive, mountainous spike in revenue or conversions. Maybe you were unexpectedly featured on a large website or magazine. Maybe an influencer shared your product on social media. Or maybe you accidentally wrote a viral blog post that led to a flood of traffic. And while spikes may get your heart racing, they\u2019re not ultimately what you want. Spikes don\u2019t last. They don\u2019t create long term growth. Remember Pets.com, Drugstore.com, eToys? They all had massive spikes and significant funding, and yet in the end they all collapsed. Spikes aren\u2019t enough to keep an ecommerce business going. <\/p>\n\n\nWhile spikes may get your heart racing, they\u2019re not ultimately what you want. <\/a><\/span>Share on X<\/a><\/span>\n\n\n\n

Nir Eyal puts it this way<\/a>:<\/p>\n\n\n\n

I actually think that virality by itself is not enough. Having your product spread virally or some piece of content spread virally is not enough. We have seen a lot of businesses that have achieved viral growth but then they can\u2019t sustain engagement and we call those businesses leaky buckets. How valuable it is when there is a bunch of users checking out your product and then they leave, they don\u2019t stick around. So, virality on itself is not good enough. You have to have high engagement, you have to build a habit-forming product or else your users don\u2019t stick around.<\/p><\/blockquote>\n\n\n\n

What you\u2019re after is sustainable, incremental, long term growth. You need to pursue steady improvement month over month, not one-time jumps. The worst-case scenario is a massive spike followed by a catastrophic crash. You need to pursue steady improvement month over month, not one-time jumps. <\/a><\/span>Share on X<\/a><\/span><\/p>\n\n\n\n

Unaligned Growth<\/h3>\n\n\n\n
\"consumer<\/figure><\/div>\n\n\n\n

It\u2019s also easy to get excited about growth that\u2019s not ultimately aligned with business goals. For example, if your PPC strategy is working properly, you\u2019ll probably see a growth in site traffic. However, unless traffic is an explicit business goal, it doesn\u2019t do any good unless the traffic is accompanied by increased conversions. Cameron Chapman puts it this way<\/a>:<\/p>\n\n\n\n

If you only focus on raising your visitor numbers, you\u2019re eventually going to hit a ceiling, where you just can\u2019t bring in any more visitors, either because you\u2019ve reached the vast majority of people in your niche or because your niche is so large that you can\u2019t afford to reach any more of them. What can you do to prevent hitting this ceiling? It\u2019s simple: focus on your conversions first.<\/p><\/blockquote>\n\n\n\n

Your email list is another prime example. If your lead magnet and opt-ins are converting well, your email list will grow. But if your email list doesn\u2019t lead to increased revenue, then it\u2019s relatively useless. The bottom line is that growth always needs to be tied to your consumer and business goals. You\u2019re not after vanity metrics, you\u2019re after revenue growth.<\/p>\n\n\n\n

The Moneyball Mentality<\/h3>\n\n\n\n

The book (and film) Moneyball, tells the true story of how the Oakland Athletics created a winning team with very little money and in a small market. How did they do it? By focusing on the right kind of growth. Traditionally, baseball teams evaluated players based on a few key metrics (batting average, homeruns, RBI\u2019s, etc.) and a lot of gut feeling. <\/p>\n\n\n\n

The Athletics determined that the bottom line goal that would lead to wins was simply getting players on base. And so instead of pursuing big hitters who cost a lot of money, they went after players who could get on base in non-sexy ways like walks and getting hit by pitches. The end result was that they began winning like crazy. The lesson? Small, repeated improvements (getting on base) leads to big results over time. <\/p>\n\n\nSmall, repeated improvements (getting on base) leads to big results over time. <\/a><\/span>Share on X<\/a><\/span>\n\n\n\n

The same applies to you as an ecommerce marketer. You need to have a moneyball mentality<\/a>, going after the small, incremental improvements rather than the massive, sexy home runs.<\/p>\n\n\n\n

Why Testing?<\/h2>\n\n\n\n
\"consumer<\/figure><\/div>\n\n\n\n

When making improvements which you think will lead to increased conversions and revenue, it can be tempting to move fast. You want to get the changes in place so that you can start reaping the benefits immediately. This is a mistake on multiple fronts. Proper testing is often a somewhat plodding process. Why is it plodding?<\/p>\n\n\n\n

It Allows You To Gather, Synthesize, and Learn From The Data<\/h3>\n\n\n\n

If you don\u2019t take the time to gather, synthesize, and learn from your data you\u2019ll probably implement an ineffective or even harmful change to your site. For example, let\u2019s say you have a product page that isn\u2019t converting<\/a> well. Before you can make any conclusions as to why, you need to know where the traffic is coming from, where visitors are clicking, what the bounce rate is, where visitor loops are occurring, and a host of other metrics. Once you gather the data, you can create intelligent hypotheses and then test them. Without this kind of data gathering, you may make a change that actually results in fewer conversions.<\/p>\n\n\n\n

Improvements Are Tailored To Your Audience<\/h3>\n\n\n\n

When you spend every hour of every day in your ecommerce site, it can be easy to make improvements you think your audience will like but that aren\u2019t really tailored to them. You may think that your audience will love the new layout of a page, only to discover that it causes your conversion rate to fall through the floor. Creating a data-based hypothesis and then testing it allows you to determine if your audience actually responds to change. Incremental testing also keeps you from making big mistakes which are difficult to recover from.<\/p>\n\n\n\n

It\u2019s Data Driven Rather Than Gut Driven<\/h3>\n\n\n\n

Gut feelings and intuition are often wrong. If your ecommerce strategy relies primarily on your gut feelings, you\u2019ll never succeed. Structured testing takes you out of the fuzzy arena of intuition and into the realm of hard and fast data. Hunches are often wrong, but the data never lies.<\/p>\n\n\n\n

It Shows You How Customers Want To Use Your Site<\/h3>\n\n\n\n

Friction is any portion of your website where visitors get hung up on the path to purchase. Friction can be caused by confusing navigation, poor design, technological issues, or a host of other problems. Testing allows you to see how your customers want to use your site and then eliminate the areas of friction. Through tools like heat maps, Google analytics<\/a>, and user testing, you can see where people are clicking, looping back, and even abandoning your site. If they\u2019re not using a portion of your site like you intended, that\u2019s an area to be thoroughly tested and incrementally improved. <\/p>\n\n\nTesting allows you to see how your customers want to use your site and then eliminate the areas of friction. <\/a><\/span>Share on X<\/a><\/span>\n\n\n\n

Why Must Testing Be Consumer Focused?<\/h2>\n\n\n\n
\"consumer<\/figure><\/div>\n\n\n\n

It\u2019s incredibly easy to get wrapped up in company goals to the point where you essentially forget about your customers<\/a>. For example, you may want to redesign a particular feature of your website to match modern design best practices. But if this design doesn\u2019t ultimately further the goals of your customers, you\u2019re shooting yourself in the foot. Testing must always be consumer focused. Why?<\/p>\n\n\n\n

Internally Focused Companies Will Cease To Innovate<\/h3>\n\n\n\n

Yahoo! was once a giant in the internet world, and yet now is a shadow of it\u2019s former self. Why? Because they failed to understand what their customers wanted, which then led to stagnation. Their list of missteps and mistakes is long and well documented<\/a>. They tried to remain a web portal for too long, not realizing that customers were moving toward social media and search engines exclusively. They missed out on the chances to buy Google and Facebook. They had a series of 24 different mission statements over the last two decades. <\/p>\n\n\n\n

If your company becomes too internally focused, you\u2019ll stop innovating. You\u2019ll be blind to what your customers really want and eventually get passed by other companies. You can\u2019t exist apart from your customers. Don\u2019t forget them. <\/p>\n\n\nIf your company becomes to internally focused, you\u2019ll stop innovating. <\/a><\/span>Share on X<\/a><\/span>\n\n\n\n

Customers Are Already Doing Their Own Research<\/h3>\n\n\n\n
\"consumer<\/figure><\/div>\n\n\n\n

Customers now have access to all the information they need to make informed purchasing decisions. They can read objective reviews, watch video demonstrations, and get commentary via social media. Jack Lowinger highlights the need<\/a> to tightly tailor ecommerce to the desires of consumers.<\/p>\n\n\n\n

While ecommerce platforms can present consumers with a wide variety of offerings (online-only coupons, exclusive items, express shipping), there is a significant lack of focus on building personalized relationships with shoppers and providing the interactive experience that comes with in-store shopping.<\/p><\/blockquote>\n\n\n\n

You need to be ready to give your customers what they want. Consumer testing is how you get there.<\/p>\n\n\n\n

Consumers Are Your Best Feedback Loop<\/h3>\n\n\n\n

Your consumers are the absolute best measure of what is and isn\u2019t working. Best practices can be helpful but the ultimate insights come from seeing what your customers are doing. This reveals the true problems – the places they get stuck, confused, or lost. It shows the biggest pain points for your customers and guides you in your incremental improvements.<\/p>\n\n\nYour consumers are the absolute best measure of what is and isn\u2019t working. <\/a><\/span>Share on X<\/a><\/span>\n\n\n\n

Additionally, consumer feedback loops give you a sense of overall trends. If multiple customers are having the same issue, it deserves your full attention.<\/p>\n\n\n\n

The Pieces of the Solution<\/h2>\n\n\n\n

How do you create an iteration engine that leads to compounding growth? It\u2019s a relatively simple, four-step process.<\/p>\n\n\n\n

Gather The Data<\/h3>\n\n\n\n
\"consumer<\/figure><\/div>\n\n\n\n

Before you can make incremental improvements, you need to gather the essential data. Your data is scattered across:<\/p>\n\n\n\n