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Now that we have all the abstract ideas and terminology down, I would like to attack the practical side of things.
How do we actually go about conducting a test? Let me teach you how to do it - the simple three step way.
Step 1: Set up a site To sell any product you need a storefront.
If you are looking to do online marketing or a single product, that storefront will most likely be a landing page.
What is a landing page? Good question.
A landing page is a single page on the Internet where the goal is solely to ENGAGE THE READERS to buy, or at the very least to submit their email for your contact list.
A Landing Page can be your site's home page, or can lead to your site's home page.
In any case, it's the first page they see.
If your product is a service, you may want just to acquire their email address (in Internet terms, this is often called having a "squeeze page").
This is a page where the only option for the viewer is to hand over their email (you can then send them more information so that they will use your service).
For now we are just creating the site.
Make it look pretty, add some SEO friendly content and maybe link it up to a blog or some other site that will draw traffic to our landing page.
At this point, you haven't invested in anything but the site.
You have no products; you have no checkout, nothing.
The site is only on the Internet to see if there will be positive reactions to it.
Step 2: Test Your P's Do you remember the Four P's of marketing we discussed? I hope so, because here is where they really come into play.
These four things- product, price, promotion and placement-are the only variables you have to play with.
The whole point of the test is to try to find the perfect balance to make your business most successful.
Just like in science class, you want to have as few variables as possible.
I recommend you should choose your product and stick with it until the end of the test.
This is the most important variable and therefore you will find the best test results when you keep it consistent.
Product and placement has been decided - we are selling our product, on the Internet.
This leaves price and promotion to play around with.
Price What happens when you give your product a 60% mark up? How about a 45%? As all the economists will tell you, you are looking for the price point that will maximize profit.
(Keep in mind, this does NOT necessarily mean maximizing sales!).
Choose a reasonable length of time (two weeks, a month, etc.
) and set a price for that time.
At the end of the set time, look at the number of people that would have bought if the site had been real.
Did you make enough monopoly money to make it worth it to spend the real stuff? If yes, GREAT! If no, try another price or throw in the towel.
Tip: Ironically, sometimes raising the price will cause people to be more likely to buy.
Promotion This is where you need to decide how many hours this job is really going to take you.
Remember we are aiming for things that will run themselves.
There's nothing better than The Four Hour Work Week and that is what we are moving towards.
If you are going to spend eight hours a day being active in the social networks to sell six eBooks, chances are you are not getting your money's work.
When testing this variable, look into the following things and more:
- Automated Twitter postings
- Blog posts
- Content for Landing page
- Linking sites
Step 3: Abandon or Invest.
Run the numbers for as long as you need.
Like I said in the first post, this isn't Las Vegas, this is your life.
You need to make a decision that you can live with.
Flipping a coin is always an option, but I generally prefer better than 50/50 odds with my money.
You are looking for a price that will give you enough sales to make a profit that more than covers the expenses (plus the trip to Tahiti you are planning in all your new found spare time).
If it doesn't, you may want to head back to the drawing board.
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