Types of Advertising:
How To Test Your Advertising
by Tom Egelhoff
My first rule of advertising is, "Advertising must be an investment not an expense." In simple terms your advertising has to not only pay for itself but make a profit for your business just like a good stock or mutual fund.
In order for that to happen you must know how to evaluate your advertising.
Is it really producing customers? Are they buying?
Is the advertising paying for itself and making a profit? In this article I will explore the ways to test advertising so you can answer these questions.
Get It Right the First Time?
If you are new in business you probably haven't placed a lot of ads yet. Let me save you a little frustration.
Rarely do even experienced ad agencies get it right the very first time out. Not to say it doesn't happen but it's extremely rare. So don't be discouraged if your early efforts don't bare immediate fruit.
Advertising takes time. Remember, you are developing a relationship with the customer. Friendships and relationships take time to develop... be patient.
If you think this sounds discouraging just keep in mind that testing and being able to evaluate your advertising will make it effective in a much shorter time.
It's much more economical and efficient than just placing ads without a plan and hoping something happens.
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How To Create A Plan To Evaluate Your Advertising
The success or failure of any plan, advertising or any other, comes down to a strict definition of what you want the plan to accomplish.
Yes, I know we want more business but it must be more specific than that.
For example: Do you just want to generate more traffic in your business? Do you want to increase the dollar amount of each sale?
Do you want to attract a better quality customer? Do you want to reduce the cost of bringing a customer to your business?
Your first response might be all of the above. If so, put them in order of importance and let's begin there.
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How Do I Start The Plan
Well, if you are familiar with medical testing you may have heard the term, "control group." A control group is a known entity.
It's the best we've been able to do so far. Even if your advertising isn't working, this will still be your control group. (See: Here's Why Your Advertising Isn't Working.)
So, we have an ad that's working or not working. Start with that and test against it. If it's a newspaper ad you might try testing the identical ad on radio and evaluate any change.
If the radio ad is more successful, then that becomes your new control group.
Caution: Keep in mind that a one time good response may be just a fluke. Look for consistent improvement before you make the new group the control group.
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How To Format Your Test
There used to be a company in San Diego, California called King Schools. Not sure if they are still in existence. They advertised a video package to help pilots get their licenses and instrument ratings.
They ran two test of an ad in magazines in two parts of the country. One test priced the packages at $199.95 and the other at $249.95. Which one do you think would pull the most customers.
The lower price right? Wrong. The higher priced course pulled more customers than the lower price.
Why? Because people felt that to offer so much for so little there must be a "catch." The customers felt there was something wrong to offer it for such a low price.
People are happy to pay the price if they can see the value. (See: Pricing Methods And How To Use Them)
Don't feel compelled to only test price. Remember, people are not shopping exclusively for price they are really looking for benefits that will make their life better is some way. See: "Why Customers Buy."
As you can see, knowing your customers can play a large part in the success or failure of your advertising.
The better you know them the easier it is to find the message that works and the fewer tests you'll have to do.
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Can I Test Too Much?
You can test too much and that's what you'll want to avoid. The purpose of testing is to do as few as possible and lean from the results to make the testing pay off in the long run with profitable advertising.
Here are some testing guidelines to keep in mind when you design your test packages.
- Testing can be an ongoing process. How many times has your brochure or business card changed? That's a form of testing that never ends.
- Don't try to test everything at once. It's too hard to keep track against the control group. Find one item that you really think would make a difference to your customers and just test that.
- If you are using direct mail to test you need about 100 responses for the test to really give you a good example. Test about 5,000 names and hope for a 1% to 2% response=100.
Try telemarketing to test before you spend bigger bucks. 100 phone calls will get as good a result as 1,000 mailers.
- In a small town there is a chance that people who receive different offers may compare notes and wonder what's going on. Be honest and tell them you are testing some advertising they will understand.
Always honor whichever offer the customer wants. Also always provide the customer with the item at the lowest price being tested.
- Tests can be expensive. Only use them to test the important things. Test the "offer", the "message" and the format and usually in that order.
- The test may reveal some negatives about your business. Learn from these numbers and make the necessary corrections.
- Always "key" your ads. That's the next item I'll discuss.
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How Do I Know My Advertising Is Pulling Customers
In order to know if your advertising is really pulling customers you need a way to track the ads.
We do that by "keying" the ads. There is something in the ad that will alert us as to what media the ad come from.
For example: If it's a coupon in the newspaper or direct mail, you can imprint a small code in one of the corners to let us know what newspaper or mailing the ad came from.
BC 06/16 might mean the Bozeman Daily Chronicle - June 2016.
We would then start an advertising file and collect these coupons and compare them to rate of sale and whether or not they produced paying customers.
If it's radio or TV, you can have them ask for a product or person.
Call now and ask for Jim or extension 123. Some keyword to let people who answer the phone to record this as an ad response.
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The Last Word On Testing Advertising
The real secret of testing advertising is knowing your customers. The better you know them the easier and cheaper your testing will be.
After all, the purpose of advertising is to reach the right people with the right message at the right time.
Knowing who they are is the most important part of that equation.
Return to the "Low Cost Advertising" Directory
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© Eagle Marketing PO Box 271, Bozeman, MT 59771-0271
http://www.smalltownmarketing.com - Phone: (406) 585-0219
Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 406-585-0219 or PO Box 271, Bozeman, MT 59771-0271
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