The Widemile Blog

Today’s industry journals, news sites and blogs are dominated with headlines highlighting the recession and the reduction in consumer spending. Cutbacks are impacting corporate marketing budgets and forcing retailers to rethink their multi-channel marketing investments.

This “do more with less” operating environment playing out across marketing departments has elevated the priority of maximizing return on marketing investment (ROMI) for all acquisition, conversion and retention activities. As highlighted in industry and business articles on almost a daily basis, traditional qualitative marketing activities (e.g. offline advertising, sponsorships) that cannot be directly measured are being slashed – and increased emphasis and budget is being shifted towards digital marketing (e.g. search, social media) as the medium delivers measurable activities. Multivariate testing, i.e. testing different versions of page elements simultaneously, and executing tests against key audience segments generates is quickly growing in adoption as it delivers marketers with the ability to achieve greater ROMI without impacting their overall investment in marketing.

For multichannel retailers, online testing is a cost effective way to quickly refine messaging, test price points, and discover and target customer segments. Insights from testing and optimization can and should inform other marketing channels in order to maximize their effectiveness.  For example, one of our clients assumed their audience was mainly male, SMB. As a result of testing they learned the majority of their market was female, SOHO. This insight improved their conversion rate by over 500% and radically changed their creative to better serve their true market.

In a time of declining marketing budgets, how much should be invested in testing? If 5% is spent on testing and increases the effectiveness of a remaining budget by 10%, a measurable gain has already been achieved. Now apply that logic to an annual marketing budget of $10,000,000. The budget is now performing as though $10,500,000 had been invested. At a 40% lift in conversion rates, the marketing will perform as though over $13,333,000 had been invested in your 2009 marketing.  That translates to a 33% boost in marketing results, without increasing budget. And that’s just for online.

Testing your content allows you to answer not only what works best, but why it worked and what mattered to your customers.