Tests, trials and triumphs

The Internet offers a lot of opportunity -- mainly consisting of three areas: The opportunity to make money, save money and test. But it has been my experience that a lot of people seem to focus on the first one alone. They want to make a lot of money with the web. Admittedly, it is possible (I've encountered a few Internet millionaires and some of them are very young).

And the Internet is also an effective place to save money. For example, most offline businesses that are seemingly not poised or positioned for the web -- like a hair salon, a restaurant, a real estate agency, etc. -- can certainly exploit the cost-efficiency offered by the Internet (it costs almost nothing).

For instance, one can remain in constant contact with one's customers through email and even book appointments, provide menus and daily specials, offer "hot" real estate listings and additional home-related services (like insurance), and so on. The Internet can also be used to offer discounts and coupons electronically, follow-up with customers and preemptively troubleshoot any problems, and automate supply chains.

Sure, the web can make or save you money.

But the web is also an effective place to test your product ideas, survey your market or customers, and experiment with new marketing strategies -- costing you little if nothing at all to do. That's probably the most underutilized area of the
Internet. Seldom do people actually use it as a testing tool.

In addition to less costs, the web also makes it possible to quantifiably measure one's experiments. Here's a good example. You're a dentist -- a typically offline business. But you also keep a database of email addresses of your patients. You can easily automate the process of booking appointments, following up with patients, reminding them of their six-month check-up and confirming bookings. But more importantly, you can use it to sell additional, related products and services.

One such product may be, say, a whitening toothpaste. Here's where the experimentation comes in. You write a "pre-sales" letter emailed to a portion of your database -- just to see if the letter pulls. Ideally, you want them to click through to a longer copy, web page sales letter. You need three different statistics, here.

• Ratio of recipients to clickthroughs
• Ratio of clickthroughs to actual sales
• And ratio of email recipients to sales.
  

This will allow you to determine where a bottleneck could be, or where you can improve. For example, you may be frustrated when you discover that only 1% or less of email recipients have bought. But the question is: Is it your web page? Or is it your emailed pre-sales letter? That's the key, here. You need some kind of reference point to make a proper judgment.

Your web page may be tweaked well enough to close a high percentage of visitors. But if the email pre-sales letter is not pulling them to that page, what good is a well-written, direct response web sales letter in the first place?

Of course, you will need a special URL for this campaign -- perhaps a copy of the same web page put into a special folder in order to properly track responses. For example, if your website is "smilesareus.com," you might have a page for the whitening toothpaste at "smilesareus.com/toothpaste/c1/" (then "c2," "c3," etc, where "c" means "campaign").

(Or you can use a special software program to track campaigns -- more on that later, as I will provide you with a list.)

But if you discover that, of 50 visitors referred to your site by the pre-sales email, only 4 have bought, it translates into an 8% closing ratio. (Based on industry averages, that's pretty good. Most targeted direct marketing ratios hover around the 5% mark.) But if you emailed your pre-sales letter to 25,000 recipients, now you have a problem. Less than 0.02% (0.016%) of people receiving your email bought whitening toothpaste.

So where's the bottleneck? It's your email message.

Of 25,000 recipients, only 50 have clicked through to the web page. That's 0.2%. So when you compare 0.016% and 0.2% to 8%, you can clearly see that your email message did not persuade people to click through. What could be the problem? It could be numerous things: The headline (the subject, which probably caused your message to be instantly deleted), the copy, the length, the market (which may not be as targeted), etc.

It could be many things. But through constant testing and tracking, you will narrow the gamut of possibilities into a more concrete base with which you can work. Test again. Test some more. If you keep failing, that's good -- for the closer to the "right" approach you will be in your permutations.

(Once you've found it, you can then duplicate the process and fully launch, with the assurance that you have a "winner.")

The Internet makes all of this possible -- more accurately and cost-effectively than any other medium. But if you're thinking of testing heavily, this might become cumbersome. There are several programs and services that can do this for you, like:

• http://www.hypertracker.com/,
• http://www.assoctrac.com/,
• http://www.roibot.com/,
• http://www.ad-tracking.com,
• http://www.prolinkz.com/,
• http://www.promotionstat.com/,
• http://www.statcruncher.com/,
• http://www.wusage.com/
• http://www.referralware.com/MarketWisely/
• And http://www.monocle-solutions.com/.
  

Nevertheless, take some time to think about this approach -- especially now, when more dotcoms are falling by the wayside (and at the same time, more home-based businesses are turning into million-dollar ventures). Why is there a difference? One tries to launch an often unproven, untested and immeasurable business plan to the mass market, while the other tests, tests and tests -- often to a highly targeted niche...

... Big difference!