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Unlocking the commercial value of testing
Polly Walton, UNRVLD Head of Experience Optimisation and Optimizely Strategy MVP, hosts a webinar to explore how justifying the commercial impact of testing is key to maximising revenue potential. During the webinar, Polly delves into the challenges and misconceptions surrounding A/B testing and emphasises the need for a balanced approach that aligns with business objectives. The key insights focus on understanding what and where to test, as well as the critical aspect of why testing is essential for unlocking additional revenue.
Understanding What and Where to Test:
Polly uncovers the key areas to consider when deciphering what and where to test on your website to ensure that data is driving the reasoning behind every test.
- Identify key conversion points: pinpoint the crucial conversion points on the website to establish a baseline for testing.
- Analyse the conversion funnel: delve into the conversion funnel, exploring granular interactions to uncover potential roadblocks and improve conversion rates.
- Evaluate performance: determine the best and worst-performing areas on the site to prioritise testing efforts effectively.
- Identify user behaviour: explore how users navigate through the website, ensuring alignment with intended design and uncovering unexpected user paths.
The Why of testing:
Next, Polly focuses on the importance of incorporating a value-driven approach to experimentation by commercially justifying each test through a simple methodology. A well-structured testing program, following the similar method below, can pay for a year's worth of experimentation and software licensing within the first 3-5 tests.
- Create a financial model: develop a financial model for estimating uplifts and justifying each test using the steps below. This can be tailored for both ecommerce and non-ecommerce websites.
- Establish baseline metrics: populate current metrics for funnel interactions, including conversion rates, monthly users, conversions, purchases/leads, and revenue.
- Apply an estimated uplift: add a projected uplift to metrics and calculate the annual value of the uplift to understand the potential impact on revenue.
- Prioritise tests: use the data to review and prioritise test hypotheses based on their potential value, giving precedence to high-impact tests.
- Track actual uplift: replace estimated uplift with actual uplift post-test to determine the true value delivered by the tested feature. This identifies the high-value tests and can help prioritising future testing efforts.
By adopting a comprehensive approach that combines strategic analysis of website data, financial modelling and continuous evaluation, businesses can unlock millions in additional revenue through experimentation. The key, Polly reveals, is to strike a balance between running a sufficient number of tests and ensuring each test aligns with the overarching goal of driving revenue and business metrics. This methodology is not only effective but can be applied across various sectors, making it a valuable strategy for both ecommerce and non-ecommerce businesses looking to enhance their online performance.
If you’d like to learn more about creating a successful testing programme for your business, get in touch to speak to Polly direct.