How to Bet on Research
prequel here
Howard W. Campbell, III here, I want to start with the three most important takeaways of this article:
1. A confused mind won’t buy.
2. Customer offers must be easy to understand.
3. Repetition works.
Let’s begin…
Sales Offer = Customer Proposition.
Business is a proposal made to a customer that is accepted and delivered. Sustainable businesses make irresistible offers that are accepted again and again and again, at a premium price, to customers who become irrationally loyal.
The best way to learn how to make an irresistible offer that is accepted again and again and again (at a premium price) to customers who are irrationally loyal is to model and swipe the successful sales systems you see around you. (PLEASE NOTE: Plagiarizing is NOT swiping, it’s stealing. That aside, swiping is key to entrepreneurial success in Direct Response marketing.)
In poker, there are only two ways to make more money: make more money with every pot you win, and put less money in the hands you don’t win. Simply put… Make more money when you make money, and invest less in losing propositions.
Avoiding Losing Propositions
Making an unclear customer proposition is like wearing sales repellant. Confusion leads to inaction, which kills sales. If there is one lesson I want to you take from this article, it is that a confused mind won’t buy. (I should know! One place I have great room for growth is making my ideas simple. )
In 1996 we asked 200 Baskin Robbins customers how interested they would be in buying a $1.99 Ice Cream Sundae with Warm Cookies, which included two-scoops of ice cream of your choice with two freshly baked chocolate chip cookies, whipped-cream, hot fudge or caramel, peanuts and a cherry on top. Slightly more than average said they wanted to buy our $1.99 warm cookie ice cream sundae. However, after tasting this product, over 90% said they wanted to buy another $1.99 Ice Cream Sundae with Warm Cookies. The taste-testing research house said that our test product had the highest taste satisfaction rating they had ever seen in their 23 year history of taste-testing products.
I thought, “Ice Cream plus Warm Cookies, what’s not to love?” I championed the new product. I proposed a sampling campaign, figuring that if we got folks to try one, they’d want to buy more.
RESULTS => Twenty Baskin Robbins’ franchise owners invested $12,500 in the equipment to bake cookies in their stores. After our 30-day market test, the new product was deemed a flop.
LESSON=> Beware of confusion. There was something confusing about our product description.
We never overcame the intial communication challenge that out of those who had never actually tasted the warm cookie sundae - only slightly more than average said they wanted to buy one! I figured that the smell of cookies baking would fix that.
What happened was… The test flopped harder than any product test in about seven years. Bummer. Ben looked baaaad. I lost trust from my client and a score of franchisees lost money following my bad advice.
My biggest lesson learned… Nobody ever lost money underestimating the laziness of the American mind. If we can’t immediately grasp the proposition, we won’t buy. If there is one lesson I want to you take from this article, it is that a confused mind won’t buy.
If there is a second lesson I want to you take from this article, it is that surveying your customers is never as accurate as testing what they actually do in a buying environment.
Part II => For advanced marketers only!
(If you get confused by what I'm about to say, please stop reading immediately and simply remember… If there is one lesson I want to you take from this article, it is that a confused mind won’t buy. If Part #2 confuses you, stop reading and just remember the previous point: A Confused Mind Never Buys.)
If there is a second lesson I want to you take away from this article, it is that surveying your customers is never as accurate as testing what they actually do in a buying environment. In order to make this business lesson more clear I want you to see yourself as owning a casino with scores of Automated Profit Machines scattered around your casino.
I’ve been a project manager on consumer research for casinos. First they use qualitative research to generate and refine ideas. Second, they use quantitative surveys to identify what appear to be winning concepts. Third, they market-test a new game in a couple of their casinos. Finally, when they have a new winning customer proposition, a game customers want to play, they roll it out across all their casinos. It’s as simple as this… Testing leads to sustainable profits.
Test before you bet big.
Paying for Media, like PPC or a CPA offer, is just like making a wager; we’re betting that we’ll get back more than we put in. Scientific marketers and profitable gamblers are in the business of mathematics, we make our livings identifying and investing in profitable propositions. From a business model perspective, the biggest difference between marketers and gamblers is scalability. On the one hand, gamblers need to scramble from one game to another, investing their personal time in every transaction. On the other hand, scientific marketers enjoy the leisure that comes from automating repeatable profitable propositions.
Established marketers are more like casino owners, than players. Casinos have enough traffic coming to them, that whether they win or lose on any given transaction is largely irrelevant. The casino owner’s profits go up as their traffic increases. From the owner’s perspective their casino is an automated profit machine.
In order to construct your casino, you need to first be a player, identifying your repeatable profitable propositions, extending your winning streaks, and automating the traffic generation to your store. Extending your winning streak entails thinking two sales ahead, optimizing your sales process and thereby increasing the average lifetime value of your customers.
When you know the LTV, your customer average LifeTime Value, you can appraise what traffic you can purchase profitably, automating your traffic generation.
Scientific marketing is about mining your data and minding your store. Whenever possible, wager on split-testing, not survey results. Yes, surveys will help you uncover what’s worth split-testing. A single mistake of mine in misinterpreting survey results cost 20 small business owners $12,500 each, a tidy $250,000. Fortunately, split-testing saved another 3,000+ entrepreneurs from making the same costly mistake.
In 1996 I worked for Donny Deutsch at Deutsch L.A., the ad agency that won ad agency of the year that year, and the next year. I was the #2 account planner on Baskin Robbins, under Jeffrey Blish, the marketing genius strategist often credited for the meteoric growth of the fledgling Los Angeles advertising agency.
How did I misinterpret survey results costing 20 Baskin Robbins’ franchisee owners $250,000? I put too much weight on taste satisfaction while I discounted the value and importance of confusion. We went into test-marketing before we had a winning proposition. We failed at crafting an irresistible offer.
In a short article like this, I can’t teach you everything you need to know about consumer research. On top of that, I’m only an expert on surveying, not testing. However, to avoid costly mistakes, you should know the five primary errors in consumer reported data, what puts “FILMS” (described below) over your lens of consumer research.
There are five primary errors in consumer reported data. Business decisions based on faulty consumer reported data are financially and emotionally costly. Poor research costs you money in lost revenue, wasted resources and halted momentum. Losing profitable momentum can breed distrust among business partners.
FILMS The 5 Errors in Consumer Reported Data
1. Fatigue
• Inaccurate responses can come from participants growing tired.
2. Inability to gauge
• Most people can tell how much milk they drank yesterday, however, asking them to gauge how much milk they drank last year will likely generate inaccurate results.
3. Lens of self-perception
• Everybody’s perception of themselves is somehow skewed. These are honest mistakes, and reflect a participants self-perception as opposed to an objective reality.
4. Misunderstand what’s being asked
• Confusion from the question or the category of the question will lead to inaccurate responses.
5. Social desirability
• When it feels better to lie, then to tell the truth, is the conscious face of being motivated by social desirability. The far subtler side is seeking to be liked and thereby intentionally giving answers expected to be pleasing to the interviewer.
There are at least two types of data collection in consumer research: Surveying & Testing. Surveying is the land of make-believe, asking prospects and customers to imagine what they might do. Testing is split-testing, where participants don’t realize their behavior is being aggregated and analyzed. StomperNet employs the brightest minds in Testing. Andy Edmonds, Dan Thies and David Bullock are some the world’s most profitable split-testers.
While my data analysis cost 20 small business owners $250,000, fortunately market-testing saved another 3,000+ entrepreneurs from making the same costly mistake. That’s the power of test-marketing, limiting liability. Split-testing sales processes often reveals one process is more profitable than another. Split-testing creates profitable results you can bank on with confidence. It’s as simple as that… Split-testing creates profitable results you can bank on with confidence.
Before we conclude, I want to review the three most important takeaways of this article:
1) A confused mind won’t buy,
2) Customer offers must be easy to understand, and
3) Repetition works.
Let’s show you how to make money with surveys…
I want you to see yourself as owning a casino. I want to show you how consumer research is used before split-testing, while the sales page is being written, research to help "casino owners" like you make more money.
Come learn from a Master… Audrey Kerwood http://eComIncubator.com
Howard W. Campbell, III here, I want to start with the three most important takeaways of this article:
1. A confused mind won’t buy.
2. Customer offers must be easy to understand.
3. Repetition works.
Let’s begin…
Sales Offer = Customer Proposition.
Business is a proposal made to a customer that is accepted and delivered. Sustainable businesses make irresistible offers that are accepted again and again and again, at a premium price, to customers who become irrationally loyal.
The best way to learn how to make an irresistible offer that is accepted again and again and again (at a premium price) to customers who are irrationally loyal is to model and swipe the successful sales systems you see around you. (PLEASE NOTE: Plagiarizing is NOT swiping, it’s stealing. That aside, swiping is key to entrepreneurial success in Direct Response marketing.)
In poker, there are only two ways to make more money: make more money with every pot you win, and put less money in the hands you don’t win. Simply put… Make more money when you make money, and invest less in losing propositions.
Avoiding Losing Propositions
Making an unclear customer proposition is like wearing sales repellant. Confusion leads to inaction, which kills sales. If there is one lesson I want to you take from this article, it is that a confused mind won’t buy. (I should know! One place I have great room for growth is making my ideas simple. )
In 1996 we asked 200 Baskin Robbins customers how interested they would be in buying a $1.99 Ice Cream Sundae with Warm Cookies, which included two-scoops of ice cream of your choice with two freshly baked chocolate chip cookies, whipped-cream, hot fudge or caramel, peanuts and a cherry on top. Slightly more than average said they wanted to buy our $1.99 warm cookie ice cream sundae. However, after tasting this product, over 90% said they wanted to buy another $1.99 Ice Cream Sundae with Warm Cookies. The taste-testing research house said that our test product had the highest taste satisfaction rating they had ever seen in their 23 year history of taste-testing products.
I thought, “Ice Cream plus Warm Cookies, what’s not to love?” I championed the new product. I proposed a sampling campaign, figuring that if we got folks to try one, they’d want to buy more.
RESULTS => Twenty Baskin Robbins’ franchise owners invested $12,500 in the equipment to bake cookies in their stores. After our 30-day market test, the new product was deemed a flop.
LESSON=> Beware of confusion. There was something confusing about our product description.
We never overcame the intial communication challenge that out of those who had never actually tasted the warm cookie sundae - only slightly more than average said they wanted to buy one! I figured that the smell of cookies baking would fix that.
What happened was… The test flopped harder than any product test in about seven years. Bummer. Ben looked baaaad. I lost trust from my client and a score of franchisees lost money following my bad advice.
My biggest lesson learned… Nobody ever lost money underestimating the laziness of the American mind. If we can’t immediately grasp the proposition, we won’t buy. If there is one lesson I want to you take from this article, it is that a confused mind won’t buy.
If there is a second lesson I want to you take from this article, it is that surveying your customers is never as accurate as testing what they actually do in a buying environment.
Part II => For advanced marketers only!
(If you get confused by what I'm about to say, please stop reading immediately and simply remember… If there is one lesson I want to you take from this article, it is that a confused mind won’t buy. If Part #2 confuses you, stop reading and just remember the previous point: A Confused Mind Never Buys.)
If there is a second lesson I want to you take away from this article, it is that surveying your customers is never as accurate as testing what they actually do in a buying environment. In order to make this business lesson more clear I want you to see yourself as owning a casino with scores of Automated Profit Machines scattered around your casino.
I’ve been a project manager on consumer research for casinos. First they use qualitative research to generate and refine ideas. Second, they use quantitative surveys to identify what appear to be winning concepts. Third, they market-test a new game in a couple of their casinos. Finally, when they have a new winning customer proposition, a game customers want to play, they roll it out across all their casinos. It’s as simple as this… Testing leads to sustainable profits.
Test before you bet big.
Paying for Media, like PPC or a CPA offer, is just like making a wager; we’re betting that we’ll get back more than we put in. Scientific marketers and profitable gamblers are in the business of mathematics, we make our livings identifying and investing in profitable propositions. From a business model perspective, the biggest difference between marketers and gamblers is scalability. On the one hand, gamblers need to scramble from one game to another, investing their personal time in every transaction. On the other hand, scientific marketers enjoy the leisure that comes from automating repeatable profitable propositions.
Established marketers are more like casino owners, than players. Casinos have enough traffic coming to them, that whether they win or lose on any given transaction is largely irrelevant. The casino owner’s profits go up as their traffic increases. From the owner’s perspective their casino is an automated profit machine.
In order to construct your casino, you need to first be a player, identifying your repeatable profitable propositions, extending your winning streaks, and automating the traffic generation to your store. Extending your winning streak entails thinking two sales ahead, optimizing your sales process and thereby increasing the average lifetime value of your customers.
When you know the LTV, your customer average LifeTime Value, you can appraise what traffic you can purchase profitably, automating your traffic generation.
Scientific marketing is about mining your data and minding your store. Whenever possible, wager on split-testing, not survey results. Yes, surveys will help you uncover what’s worth split-testing. A single mistake of mine in misinterpreting survey results cost 20 small business owners $12,500 each, a tidy $250,000. Fortunately, split-testing saved another 3,000+ entrepreneurs from making the same costly mistake.
In 1996 I worked for Donny Deutsch at Deutsch L.A., the ad agency that won ad agency of the year that year, and the next year. I was the #2 account planner on Baskin Robbins, under Jeffrey Blish, the marketing genius strategist often credited for the meteoric growth of the fledgling Los Angeles advertising agency.
How did I misinterpret survey results costing 20 Baskin Robbins’ franchisee owners $250,000? I put too much weight on taste satisfaction while I discounted the value and importance of confusion. We went into test-marketing before we had a winning proposition. We failed at crafting an irresistible offer.
In a short article like this, I can’t teach you everything you need to know about consumer research. On top of that, I’m only an expert on surveying, not testing. However, to avoid costly mistakes, you should know the five primary errors in consumer reported data, what puts “FILMS” (described below) over your lens of consumer research.
There are five primary errors in consumer reported data. Business decisions based on faulty consumer reported data are financially and emotionally costly. Poor research costs you money in lost revenue, wasted resources and halted momentum. Losing profitable momentum can breed distrust among business partners.
FILMS The 5 Errors in Consumer Reported Data
1. Fatigue
• Inaccurate responses can come from participants growing tired.
2. Inability to gauge
• Most people can tell how much milk they drank yesterday, however, asking them to gauge how much milk they drank last year will likely generate inaccurate results.
3. Lens of self-perception
• Everybody’s perception of themselves is somehow skewed. These are honest mistakes, and reflect a participants self-perception as opposed to an objective reality.
4. Misunderstand what’s being asked
• Confusion from the question or the category of the question will lead to inaccurate responses.
5. Social desirability
• When it feels better to lie, then to tell the truth, is the conscious face of being motivated by social desirability. The far subtler side is seeking to be liked and thereby intentionally giving answers expected to be pleasing to the interviewer.
There are at least two types of data collection in consumer research: Surveying & Testing. Surveying is the land of make-believe, asking prospects and customers to imagine what they might do. Testing is split-testing, where participants don’t realize their behavior is being aggregated and analyzed. StomperNet employs the brightest minds in Testing. Andy Edmonds, Dan Thies and David Bullock are some the world’s most profitable split-testers.
While my data analysis cost 20 small business owners $250,000, fortunately market-testing saved another 3,000+ entrepreneurs from making the same costly mistake. That’s the power of test-marketing, limiting liability. Split-testing sales processes often reveals one process is more profitable than another. Split-testing creates profitable results you can bank on with confidence. It’s as simple as that… Split-testing creates profitable results you can bank on with confidence.
Before we conclude, I want to review the three most important takeaways of this article:
1) A confused mind won’t buy,
2) Customer offers must be easy to understand, and
3) Repetition works.
Let’s show you how to make money with surveys…
I want you to see yourself as owning a casino. I want to show you how consumer research is used before split-testing, while the sales page is being written, research to help "casino owners" like you make more money.
Come learn from a Master… Audrey Kerwood http://eComIncubator.com
posted by Ben Mack at
9:14 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home