How to find out which of your advertising techniques are working and which are not..

test marketing

Are you using a number of different marketing or promotional techniques in order to find new customers or increase the sales among your current customers?  Perhaps you have offered discounts on certain products or rearranged products in your store.    How do you know which promotional activities are working and which are not?

If you see an increase in sales after you have dropped the price of a certain product you may surmise that the price drop caused the increase in sales.  However, there may be some other reason for the increase in sales.  For example if you advertised the price drop in the local paper, how do know whether the price drop cause the increase, or whether the advertisement with the address of your store on it caused an increase of awareness and customer visits to your store?

One way of finding out which promotional activities are working and which are not is to carry out test marketing to find out if there is a causal relationship between your promotions and sales.  Which pretty much means find out which promotional activity caused and increase in sales.

In order to carry out test marketing, you need to have an experimental group and a control group.  The experimental group is the group exposed to the stimulus (i.e. promotional) material while the control group is not.    Or in some cases if you wanted to try two different promotional ideas you could have two different experimental groups exposed to two different stimuli (promotions).

An example of carrying out test research is as follows:

Let’s say you owned a beauty shop and you want to increase your sales for your full body massage treatments.  You think about offering a $10 discount or a $5 discount.  You want to work out the cost of each, after all what’s the point of offering a $10 discount, when a $5 will bring in the same number of customers.

You already have a control which is based on your current sales when you do not offer any discount.  Test group one would be those that get offered a $5 discount voucher and test group two would be those offered a $10 voucher.

Next divide your sample into two equally matched samples.  By equally matched I mean my age, gender, household size etc. anything you think may affect how people shop for a massage.    Then do door to door leaflets drop where half would receive a $10 voucher and half would receive a $5 voucher.

You can test which campaign is more successful by the number of vouchers you receive back.

There are a number of different ways you can do test marketing. You could test the best method of distribution for discount vouchers for example, by placing some online and dropping some in letterboxes to see which ones get redeemed more often.

Summary

In market testing it is important to manipulate one marketing element, such as price level or advertising message in order to measure the effect on their behaviour, i.e. buying the product.  This way you can understand which promotions are working and which are not.

Want more hints and tips on how to conduct your own market research?  Sign up for my free newsletter and you will also receive a copy of my ebook Understanding Your Market and Your Customers in Three Easy Steps.

One Response to How to find out which of your advertising techniques are working and which are not..
  1. Jennifer Fedewa
    January 30, 2012 | 10:50 am

    I must say this is a great article i enjoyed reading it keep the good work :)

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