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Marketing Insights for Entrepreneurs

Everything You Need to Know to Get Started with A/B Testing

When you launch a website, traffic acquisition is only half the marketing equation. In addition to recruiting an audience, you need to convince the world that your product or service is worth buying.

That’s the premise of conversion optimization — the marketing practice of transforming your website visitors into first-time customers and first-time customers into repeat buyers.

It’s common for marketers to focus on amplifying their web traffic through social media, writing blog posts, email marketing, and paid channel advertising. For these marketing initiatives to be worthwhile, however, they need to generate an ROI.

Let’s say that you spend $100 on a marketing campaign that generates 100 website visitors. If one of these individuals spends $1,000 with your company, your conversion rate is 1%, and you’ll earn $10 for every dollar spend.

Imagine what would happen if you boosted your conversion rate to 2% using the analytical framework from above — that’s $1,000 in extra revenue. Now let’s say that you’re able to scale your traffic volume to 1,000 website visits a month. At a 1% conversion rate that monetizes at $1,000 per deal, you’ll make $10,000. At a 2% conversion rate? You’ll make $20,000.

Remember– You’re in the Driver’s Seat

It’s common for marketers and small business owners to leave their conversion optimization strategies to chance alone. In reality, you have complete control over your results.

Subtle changes on your website can help you generate more leads, sign-ups, and long-term customers. It’s difficult, however, to identify what those subtle changes should be.

That’s where A/B testing comes in.

A/B Testing Transforms Details Into Significant Gains

As a small business owner— also known as your company’s lead sales strategist — you’re probably focused on chasing ‘big’ wins. What’s important to keep in mind about conversion optimization is that the details have the potential to become your biggest wins.

That’s why A/B testing and conversion optimization go hand-in-hand. A/B testing is a simple way to test concepts and changes on your web pages against one another. Typically, marketers will take an existing landing page, paid channel ad, website layout, or email and then compare it with a new version.

A/B testing shifts marketing conversations from guess-work to data-driven conversations. Marketers will know that their data is valid based on statistical significance — a mathematical concept that tells you that the trend you’re observing is grounded in reality (as opposed to chance, alone).

When you measure the impact of changes made to website elements like headings, font colors, and website calls to action (CTAs), you’ll make sure that every design or copywriting decision positions your business towards a strategic win.

You and your team members may have suspicions about what website elements will perform better, but the truth is that you’re dealing with a major blind spot. Without data, you’re throwing darts in the dark — and that isn’t smart marketing. A/B testing ensures that you’re pursuing the right direction.

An Example of an A/B Test

Liftopia, a hub for skiers and snowboarders, wanted to optimize its search engine marketing (SEM) ads to connect consumers with ski deals on its website.

SEM is a channel with a reputation for driving highly qualified traffic — when users are looking for discounted ski lift tickets, they’ll see Liftopia’s deals front and center of Google’s search results, in the exact moment that they’re ready to buy.

Liftopia’s original landing pages were generic and presented too many options for new website visitors. Audiences could buy tickets, search for new products, or click directly on deals for other resorts. Liftopia suspected that these audiences were confused and overwhelmed with options.

source: Optimizely

Source: Optimizely

Liftopia wanted to see if they could boost conversions by personalizing the website experience to the exact keywords that users were searching for on Google.

The company hypothesized that custom-tailored (and much simpler) landing pages would boost website conversions.

Source: Optimizely

Source: Optimizely

Here’s what happened when Liftopia put its assumptions to the test:

Liftopia ran an A/B test for just seven days, splitting web traffic between the original landing page and the simplified variation. Just as Liftopia suspected, the winning page was the new version — it boosted conversion rates (measured as clickthrough rates on deals) by 23.7%. After observing these results, the Liftopia team pushed 100 percent of its web traffic to the new landing page.

Liftopia’s A/B test had value beyond boosting revenue. By amplifying conversions, Liftopia was able to make its ad spend more efficient — the company can generate higher conversions and revenue while keeping ad spend steady.

Starting with Simple Ideas

A/B testing doesn’t need to be complex. The fact is that most small business owners won’t have the resources to create highly customized (and personalized) web pages. That’s okay.

Tools like Optimizely and Unbounce make it possible to design landing pages and run A/B tests without needing to touch a line of code. All of the resources to run simple A/B tests are pre-built into these platforms.

Here are some ideas for concepts that you can test:

After a few iterations, you’ll figure out which testimonials help you sell most effectively. Just make sure to keep your mind and heart open — your favorite client comments may not be what resonates with your prospects.

Final Words of Wisdom: Keep the Right Approach

Before we send you off into the world of A/B testing, we want to solidify a few best practices:

Always be clear about the problem that you want your A/B tests to solve. It may help to frame this problem as a research question. For instance — ‘Will changing my CTA button from red to blue increase click-through rates?”
Answer your own research question with a hypothesis. Before setting up your first A/B test, think about what your gut is telling you. Heck, you can even put your answer on paper (or place bets at the office).
Know what metric you’re measuring. Are you looking at direct sales? Click-through rates? Make sure that you know what metric you’re trying to optimize before running your first test.
Back up your studies with qualitative research. Numbers alone aren’t enough for solving your marketing problems. Understand why you’re seeing certain patterns. Ask lots of questions (hey, it’s a good excuse to talk to your customers.
Be relentless about staying objective. It’s natural to have favorites — we’re human. To the best of your ability, however, you need to keep your emotions quiet. A/B testing is powerful because it reveals your company’s blind spots. Don’t let your (natural) biases cloud your judgment.
Have fun. A/B testing can be frustrating. You’ll learn things that you probably don’t want to know, and you’ll probably need to invest money in fixing problems on your website. Don’t let these moments bog you down. A/B testing really is a blast. Make it a game. Place bets. Do it with monster-smile.

Your Turn: As a small business owner, have you tried A/B testing? What did you find out?

  • Charles Brodeur

    Hi Ritika:

    Thanks for the article on A/B Testing. Please note that your ROI calculation in the 4th paragraph should read “you’ll earn $10 for every dollar spend.”