Testing – the Most Effective Tool for Database Marketing
Testing is essential in every campaign, given that the business environment changes dynamically. Nothing should be taken for granted. Testing can be used not only for the estimation of short term response rates, but also to monitor the ROI of a campaign. Each marketing campaign should be tested on a smaller group of customers before being deployed. Based on the results of the test campaign, the marketing campaign can be reshaped to achieve better results.
The steps to implement a test campaign are the following:
1. Identify a group of customers, who are potential buyers of a product.
2. Set up a test and a control group. The test group gets the offer. The control group is treated as usual, but it does not get the offer or any other offer. Ideally, the test & control groups consist of the same type of customers. The size of the control group has to be sufficient to provide statistically accurate results.
3. The test campaign is executed and results are captured.
4. The effectiveness of the test campaign is evaluated by the difference between orders between the 2 groups in the given campaign period.
The test group is expected to produce increased orders. The comparison to the control group can factor out any market or economy factors, affecting the result. This is why the set up of a control group is so important, in order to evaluate accurately the effect of the test campaign. In a test campaign, alternative offers may be tested, in order to figure out the most efficient approach, yielding higher ROI. Testing is critical to ensure that you maximize the effectiveness of your direct marketing campaigns.