Define A/B testing

2013Nov12_BusinessValue_AWhen it comes to adding value to your business and the products or services you offer, you often need to carry out research. From the marketing to the actual products themselves, it can be hard to figure out what your customers will respond positively to. For many companies, the answers come from conducting tests, with the most common type being A/B tests. But are these of any real use to your company?

A/B tests defined

The concept behind A/B testing is to release two different versions of  what is being developed, to see which performs best. This can cover a wide variety of business processes from traditional direct marketing to websites and even email marketing.

A good example of A/B testing would be developing an email marketing campaign where two different versions of an email are sent out with the goal of getting people to visit a page on your website. Version A may have slightly different content and images from version B, and half of your list would receive A with the other half receiving B. You then track the responses and visits to your site to see which version has worked better.

The information gained from this type of testing can then be used to improve future email campaigns or products and zero in on what is really effective in getting clients to do what you want.

A/B tests can actually vary in purpose. The most common being testing the difference between two versions of the same idea. Other times version A is a current version, while B contains improvements and is sent out to gauge customer reactions to these new developments.

What benefits can a business gain from A/B tests?

Compared with other testing methods, A/B testing offers four concrete benefits:

  1. It’s cheap – While it may incur costs developing different versions, most of the time this is fairly minimal, with small differences between them. And, when it comes to testing, you can usually just split the groups in half, with no need to develop completely new groups for each version. Finally, when the test is complete and data has been gathered, it is usually not time consuming or costly. You can usually just decide to use the one that performed the best – with little need to invest in any big changes.

  2. It can accurately measure performance differences – A/B testing makes it easy to measure performance differences between two options. You really just have to collect the relevant data and then compare the results. Beyond that, this type of testing makes it easy to measure the difference between two options, even if this is small.

  3. It measures actual behaviour – During the development stage, it can often be difficult to accurately guess how products or different versions will fare when released to the public. By employing A/B testing, real customers are the ones who are testing, so you can better judge and see how your target market will react. This can go a long way in helping you create desirable products and services that will be well received.

  4. It can resolve trade offs – When unsure about wording, strategy and outcomes you can conduct an A/B test to see which option works best. A good example of this is offering a coupon. Do you offer it in the email or do you put a code on your site? If you include this in an email, other customers may react negatively if  they don’t get the same discount. A/B testing can help you figure out what style works best, while minimizing problems.

When should they be used?

When A/B tests are used correctly, they can be a valuable tool in helping you add value to your business. That being said, they aren’t great for all types of testing situations. In general, A/B tests are most successful when they are applied to projects with these three parameters:

  1. There must be only one clear goal – A/B tests work best when there is only one goal or outcome to measure. For example, which version of an email gets the most clicks, or which page gets the most amount of visitors clicking on a ‘call to action’. If you try to measure more than one goal at a time, the results can get complicated.

  2. The outcome must be measurable – If you cannot measure an outcome easily from this type of test, then you likely won’t be able to pick an option that works best. For example, it is difficult to easily measure satisfaction from A/B tests compared to what customers prefer.

  3. Designs need to be complete – A/B testing works best when you have a complete, or near complete, product, email, etc. The key here is to conduct A/B testing and possibly make minor changes to implement the option that provided the better results. The options are viewed to then be the final version employed.

If your project meets these requirements, then A/B testing will likely be useful and could help you improve your business profitability. To learn more about harnessing and gathering data from these and other types of testing, please contact us today.

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