A/B testing is an easy way to make decisions and more mulaaa!

One of my recent odd obsessions is A/B testing.  This involves running two images, ads, headlines etc. against each other and seeing which performs the best.

A/B testing is freaking awesome because it can help you find which Facebook ad gets the most clicks, which headline on your homepage causes more users to sign up, or even what price level is the most profitable for your product or service. I love the idea that tiny changes can have huge results.

Why bother with A/B tests?

Normally, final design and copy is chosen by your client or the most senior person on the project.  But there is no reason to rely on their opinion when you can make a decision with easily available data and information.

If you think one image or tag line should be used but your boss or client thinks differently, instead of putting your tail between your legs and saying ‘Yes sir!’, you can say “Let’s run a quick test and see which does better.”

You can make extremely informed decisions on copy and design, instead of relying on hunch or the client or highest ranking person’s opinion.

An example…

On one recent A/B test using an awesome tool called Unbounce, I tested the conversions of two similar pages except for their form design.  On one I used a normal name and email sign up box, while on the other I used a form that integrates with Facebook to auto-fill the user’s information so that they don’t have to type anything.  All they have to do is click register.

I decided to do this for 2 reasons:

1. All traffic was coming from Facebook ads, so I knew the user would be signed in to their account.
2. The page is for a Facebook training product, so it made sense to highlight a use of the platform the product is focusing on.

Now it sounds like the form integrating Facebook is a no-brainer, but I was actually really worried that people wouldn’t use it because it’s not commonly seen and would be unsure of what to do or what would happen when they clicked register.  In order to get a user to take a specific action, it has to be very clear, familiar and easy.

Without A/B testing, I would have had to simply make a gut decision, or rely on the client’s preference to decide if they wanted the Facebook form or the standard form.  But with A/B testing, I could spend a few dollars and see which performed better.

And that’s exactly what I did.

The Results

Option A: I sent 91 visitors to this page of which 22 entered their name and email for a conversion of 24% (22/91=24%)

Option B: With the landing page with the Facebook form I sent 91 visitors to the page of which 31 signed up for a conversion of 35% (31/91=35%).

Now 182 visits definitely isn’t enough to have statistical significance and declare an absolute winner, but with a limited budget it was the best way to make an informed decision.

So after this small test – going forward, I would move the majority of my budget and traffic to the higher converting page.

How an 11% conversion boost means thousands extra in your pocket

So we know that A/B testing can help settle debates between you and your boss or client, but how does it effect the bottom line as well?

Say I had a total budget of $2,000 to send traffic to a page.  Let’s assume on average it costs me $.80 every time somebody clicks on my ad.  That means with my budget I can send 2500 people to my page.  If I send them all to the higher converting Facebook form page, which converts around 35%, I will have generated 875 leads.

2500 people go to page > 35% submit their information = 875 leads

However, if I hadn’t done the A/B test and had instead used the lower converting standard form, and had sent the same 2500 people to the page which only converts around 24%, I would have only generated 600 leads.

The same 2500 people go to page > 24% submit their information = only 600 leads

This means I can generate 275 more leads with the exact same budget.  How would that impact your business?  If I can close 5% of my leads and a sale means $500, then I’ve generated $6,500 more without spending another dime.  Pretty cool, huh?

Have any questions on how you can use A/B testing to boost your sales or thrill your client or boss?  Shoot me an email at biddyco [at] gmail.com

One of my favorite business stories (how lame does that sound) is the story of Levi Strauss.

And how during the gold rush of the 1850′s, while everyone was busy looking for gold, he was busy selling them pants.

And other smart people were selling the miners shovels, pales etc.

The people who made the real money during the gold rush weren’t the people searching for gold.  They were the people like Levi who sold the tools to the miners (with the very rare exception).

So that had me thinking…

What is the gold rush of our time?

And how can you sell them shovels (or a nice pair of slacks)?

Here’s what I came up with from a quick brainstorm….

• Photography has never been easier or more accessible. More pictures are taken now then any time in history..more people want to do it professionally or as a hobby. How can you sell shovels like Canon and Nikon?
• Other examples include Instagram, which just sold for a billion dollars, and companies like Blurb which allow photographers to create beautiful books of their photos.
• Training – help people learn like on creativelive.com
• Creating websites for their work like behance pro, photoshelter, etc.
• Apps – Apps are like the dot com boom all over again.  What could be sold to developers?  Training?  Software to make it easier?  Example: Twilio and AppSumo.
• Environment – Electric Cars. Solar. How to serve these kinds of companies and consumers of their products?
• Installation and maintenance
• Supplying materials and parts
• Marketing and promotion to help secure position in their industries
• Publishing – Magazine and book publishing are both going through radical changes that will lead to more authors then at any point in history.  Amazon and Apple are setting themselves up to serve and capitalize on this growing market. But what are some other ways to serve new self-published authors?
• Helping them market themselves and find their audience (ex. entreproducer)
• Taking over the editing, proofreading and formatting for authors like http://winningedits.com/

Let me know what you think should be added to the list in the comments!

I’ve noticed a lot of people making this mistake lately (including myself)…

You know when you want something really, really badly?

So bad you’re SURE that the rest of the world knows exactly what you want.  Because, how could they not?

It’s obvious to you what you want, so it should be obvious to them as well.

Your body language and hinting has been a dead giveaway.

You’re doing everything you possibly could.  Anything else would be to forward and awkward, right?

Wrongggg.

People have absolutely no freaking clue what you want.

And in most cases they aren’t going to expend the emotional energy to try and figure it out.

Don’t believe me? – How often do you spend time thinking about what other people want?

The trick is then, if you want something, you just have to ask.

Want to work on a different project? 

Your boss isn’t going to just figure this out and one day assign you.  You have to tell them what you want.

Want to go on a date with that girl?

Have fun waiting for her to ask you out.

Want to close the sale?

It’s never going to happen if you don’t ask.

Want to partner with that other company?

Of course, everybody wants to work with them – they should know you want to partner up right?

Wrong, you have to tell them.

If you go through life assuming people know what you want and wait for them to give it to you, you’re going to find that the world doesn’t read your mind and deliver everything you wish.  But sometimes it’s as easy as asking.

Yesterday, Facebook unveiled Timeline for brand pages.

Like most Facebook redesigns it made a lot of people happy and a lot of people really pissed.

The biggest gripe I’ve heard so far is that Facebook completely got rid of the ability to have a ‘landing tab’ for your fan page.

Now everyone lands onto your wall (or should I say Timeline), whether you like it or not.

This wasn’t just a small feature but something that entire companies built themselves on.  And now ‘their’ platform is gone overnight.

It’s generally seen as a smart idea to build a business on top of something bigger or build it into something that already has traction.. example: iPhone case makers.

But when your entire business depends on someone else’s and they can completely disrupt your offering without a warning or a care, well – that’s pretty scary.

Why do you think Zynga announced an all new Zynga.com today.

They are probably the most Facebook dependent company in existence but are now making moves to be able to stand on their own 2 feet.

Should you?

There’s a bar down the street from me that is trying to brand itself as a ‘speak easy’ of sorts. It’s located in a sparsely lit back alley and claims to require a password for entrance.  (There’s a surprising lack of hipsters)

So how do you get this secret password?

You have to check their twitter page where they post the new, daily password.

Yeahhh. – Not so secret.

I like the concept. It creates exclusivity and makes it feel like a private club – which suits its small, dark interior.

But I hate the execution.

First, no – you don’t actually need the password. They’ve never once asked me for it.

Second – having the password of the day publicly on twitter automatically eliminates all feeling of exclusivity and secrecy.

So how could they do this right?

By building an email list instead of a Twitter following.

Hear me out…

If I were them I’d send people to a specific landing page on my site or Facebook page that captured their email in exchange to get the password of the day sent to their inbox.

Why? Because having the password sent through email creates more of an exclusive feeling and gives people incentive to give you their email if the password is not available anywhere else. Look at sites like Gilt creating the feeling of an exclusive, members only community by requiring you to login with your email.

Also, the fact that you can now send people an email every single day keeps you top of mind. People who follow your twitter maybe see 10% of what you actually tweet. You know people will see your email. Bud Light pays millions to keep their beer always on the minds of their customers. You’d pay virtually nothing to do the same with email.

Discounts that don’t make you feel like a coupon clipper

To encourage people to look for the password, open the emails and go to the bar, I would also give a small discount on drinks to whoever uses the password. In the email I’d tell customers to whisper the password to the bartender in order to get $2 off their beverage.

Why would this work? Because It’s like an upscale, super exclusive, hip coupon.

Except you don’t feel cheap and broke using it. It makes the experience fun.

Imagine going up to the bartender and saying “I’ll have a gin & tonic…. also, ‘moisturizer.’”

Where else could you do that??

Can you measure it?

It also lets you directly measure how many people the password emails are bringing into the bar. This way you would know if people were actually receptive to the idea or not and if you should continue to use it.

If people found it annoying to get an email everyday with the password, you could later add the option for them to sign up to either a) get an email every day or b) only get the password on the weekends.

Twitter is great for posting short updates and engaging with local liquor lovers, which they should absolutely keep doing. But email is a better medium to help drive the exclusivity and secrecy needed for a password based promotion.

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I’m currently reading Tested Advertising Methods which has gotten me thinking more about the idea of testing.

One thing I learned from my last startup is that you have to test your assumptions.

Because most of the time they’ll be wrong.

We all get what we think are great ideas everyday, but in reality you have no clue until you put it to the test. And that’s where most people hit the wall. Because the truth is, it’s easy to come up with interesting ideas. But people have a hard time figuring out how to put the pieces in place to test something.

When we were building an email newsletter that sent out cool job listings, I thought it would be interesting to create a paid version in addition to the normal free one. I didn’t expect many people to pay for the premium version (as we were targeting students) or for much of our revenue to come from it, but I thought it would be a great way to encourage students to share our site with their friends.

The idea was that we’d give you a free premium subscription (which cost $9/month) if you emailed or Facebook messaged 5 friends about the site.

I assumed buy offering an incentive like this a large portion of our free subscribers would send out a quick message to their friends in order to get the premium service (which contained more job listings). If that happened our subscriber base would have increased exponentially with little work and could’ve been our largest user acquisition source.

So out of our several hundred subscribers, how many people do you think messaged their friends in order to get a free premium subscription?

20%?

10%?

Try 1 person.

And to tell you the truth, I have no idea why it failed so hard.

It could’ve been because it wasn’t a compelling enough offer or because there is too much resistance for the user to ask them to send a message (maybe we should’ve created pre-written copy for them) but the point is that what I thought was going to be a big part of our growth only brought in a handful of users at best.

The up side was that we were able to do this as a test and explore it without spending any money or time.

What if we had gone ahead with something more elaborate that cost us thousands to set up and months of our time only to find out that nobody cared?

Yea – I’d want to jam a Q-tip deep into my ear.

So the next time you get some genius idea that you think is going to buy you a yacht or grow your user base 500%, put it to the test before you bet the farm.

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Have you ever been in love?

I’ve been obsessed with Chipotle and their truck sized burritos for a couple of years but let me tell you – yesterday sealed the deal.

So just what happened that solidified my man crush on a pile of rice?

Well you see, when I ordered my steak burrito I was informed that they had run out and I would have to wait a few minutes while someone chopped some more up (Have you ever watched them do this? I’m sure they’re going to take their thumb off every time).

Not a huge deal, it gave me time to checkin and write an email.  I’ve had to wait a whoooole lot longer when the line is out the door like usual.

When I went to checkout the girl at the register apologized for my wait and said my burrito was on them.

Whatttt!

I couldn’t believe it.

Have you ever been given a free meal at McDonald’s when you have to wait for them to make more french fries?  Nope.

Even at fancy restaurants if your food takes longer than expected, they usually just throw in some crappy dessert that you didn’t even want.

Jeeze, thanks but I really didn’t need your chocolate fudge mountain brownie, I’m watching my figure.

But luckily the good people of chipotle are even smarter then I imagined.

They realize that, yes a policy like this costs them a few bucks now and then, BUT when you mess up and are able to completely go above expectations you end up creating a stronger bond with your customers.

Chipotle realizes they don’t sell burritos.

They sell customer service wrapped in a tortilla.

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