A Simple Rule for Making Your Testing Process Easier, Cheaper, and More Effective
Issue #2179
- WEALTHY: Keep an eye on the unfriendly skies (Rick Pendergraft)
- HEALTHY: Why you may want to start using the "European sports car position" (Dr. Bill Stillwell)
- WISE: Grenville Kleiser on ignoring what’s unimportant
ALSO IN THIS ISSUE:
- One of the biggest testing mistakes direct marketers make (Michael Masterson)
- Management advice from Jack Welch
- It’s Good to Know… about pain-free injections
- Add "apercu" to your vocabulary
Revealed: Probably the Biggest Red Herring in History!
While the world’s been stock watching (and losing!), the elite quietly play a different game with different rules…
Feeling cheated and disillusioned by the stock market? Sure, you may have made a good trade here… but then lost on another. The people dutifully pour their hard-earned cash into investment banks to put into the stock market for them… and those investment banks gladly oblige, for a fat fee… which they invest somewhere else! I’m no conspiracy theorist, but in my opinion the stock market is really a diversion for the masses… a distraction from where the BIG and consistent money is made… in the world’s money mountain. And when I say “Money Mountain,” I speak quite literally… the BIGGEST mountain of money on the planet. Click here to read more…
Grounded
Much has been made in the news lately about American consumers having less money in their wallets. Higher costs at the grocery store and elevated mortgage payments (for many with adjustable rate loans) are just two of the contributing factors. And one industry will be feeling the restrictions acutely.
I’m talking about airlines. As we’re heading into what has traditionally been a busy travel season, the airline industry is being hit with a double-whammy:
- Reduced disposable income will prevent consumers from taking trips during the Thanksgiving and Christmas holidays. When money is tight, more Americans may choose to drive to their destinations or not travel at all.
- With oil recently closing over $88 a barrel, fuel costs will soon be eating into U.S. airline margins. According to the Air Transport Association, a one-cent increase in a gallon of fuel translates to a $190 million to $200 million increase in their costs. In fact, fuel has now overtaken labor as the airlines’ top cost.
These factors point toward tough times for the industry. Look to sell American Airlines (AMR), which has negative quarterly revenue growth, negative quarterly earnings growth, and negative free cash flow growth.
[Ed. Note: Rick Pendergraft is a market expert and two-time winner of the "Top Trader" award at Schaeffer's Investment Research. In ETR's free e-zine, Investor's Daily Edge, Rick and a select group of market specialists will give you to-the-point analyses and tell you how you should act TODAY to make the most money with the least risk.]
"Do not let trifles disturb your tranquility of mind…. Life is too precious to be sacrificed for the nonessential and transient…. Ignore the inconsequential!"
Grenville Kleiser
A Simple Rule for Making Your Testing Process Easier, Cheaper, and More Effective
You’ve got a top-notch copywriter - one who’s made tens of millions of dollars for his clients. He’s at your disposal, ready to answer your biggest questions about what makes a direct-mail sales package attractive to a prospective customer. Do you ask him about the best color for a headline? Or the best type style to use? Or the best paper stock?
During a question-and-answer session at ETR’s recent Info Marketing Bootcamp, copywriting expert James Sheridan warned against getting bogged down in such things.
"Sure, you can test them," said James," but those are details that don’t matter."
Testing is widely accepted as one of the most powerful tools a direct marketer can use. But testing insignificant choices is one of the most common mistakes direct marketers make.
In an effort to "perfect" or "tweak" a promotional package, they test all kinds of things that have no real chance of producing a meaningful change in response rate. What they get is usually in the plus or minus 10 percent to 25 percent range.
That range is enough for many. For me, it’s inadequate.
I am not a statistician, so I can’t make the statistical argument - but I can tell you this: Getting a 10 percent or even a 25 percent lift on a test cell of 5,000 or even 25,000 names is not always reliable. It may sometimes be enough to validate going forward with something you want to do anyway (say, changing your price or your guarantee or the bonus you want to offer), but it may not give you the level of confidence you are probably looking for.
I’ve had 20 years of experience in planning and reacting to more than a billion dollars’ worth of direct-mail testing. I’ve seen - and have been responsible for - just about every kind of test you can imagine. During that time, I came up with all kinds of interesting theories that I proved through testing, satisfying myself with 25 percent lifts, only to see those results negated on back-tests.
This happened not just once but hundreds of times. In fact, I think it’s fair to say that back-testing nullified my prior tests more times than not.
It’s Amazing How Many Foolish Tests People Will Spend Money on
A young copywriter has the idea that several paragraphs in a sales letter are so bad that they must be rewritten and retested. The results come in - and, sure enough, the new package outpulls the old by 28 percent. A month later, however, the product manager screws up and mails the "inferior" copy, and guess what? It beats the new version by 22 percent.
An art director wants to demonstrate that his trendy new typeface will make a difference. He gets a 15 percent lift and is satisfied.
A product manager wants to prove to his client that he is right about something - almost anything - and creates a test to vindicate his point of view.
There are many reasons for testing insignificant options. Yet, every test costs money. Every test reduces profits.
I remember when I was younger and more foolish. My mentor, JSN, and I noticed that all the really successful packages for financial products at that time had one thing in common: the color scheme. They all used black and burgundy ink on cream-colored stock. We rushed to test it, and got a 30 percent lift. It was a "Eureka!" moment.
We immediately converted all our packages for financial products to this "ultimate" color scheme. Luckily, we also did a little back-testing.
It’s a little like looking at an oil stain on an old window. If you really want to see the visage of the Virgin Mary, you will.
A Simple Rule of Thumb
After thinking about this problem for a long time and reading some serious statistical stuff recently (that I only half understood but that validated my experience), I came up with a rule of thumb. I offer it to you for consideration: Test nothing except that which can potentially give you a 100 percent lift in response.
It’s radical thinking, but it does two things that are very good for your mailing results:
- It dramatically reduces useless testing and, thus, increases your profits.
- It forces you to do the hard thinking necessary to come up with truly breakthrough testing ideas.
[Note: There is one exception to this rule. If you are considering making a change for the purpose of making the package less expensive to mail - e.g., changing the envelope size to reduce postage costs - you must test it first to make sure it doesn't decrease response. In this case, you would be testing not in an attempt to lift your response rate but to make sure you're not going to decrease it.]
The Question Is This: What Can Possibly Double Response Rates?
Well, first I’ll tell you what won’t work: Changing your color scheme, paper stock, or type size. Making your body copy smoother or cleaner. (Forget Strunk & White.) Correcting your data. Substituting a Johnson Box for a regular headline. (You’ve seen a Johnson Box: an outline of a box on top of the salutation inside of which the headline and/or lead goes.) Changing the person who signs the sales letter. Adding marginalia. Using a live stamp vs. an indicia vs. a meter. Changing the response method. Using testimonials. Using a product photo vs. an illustration. Your selection of premiums. Most forms of personalization. Individual involvement devices. Most lift notes. A BRE vs. a self-mailer. And (usually) providing an 800 number.
I’m not saying these things don’t matter. They do. When you design your direct-mail sales package, you need to keep all of them in mind and use your judgment to make the most appropriate choices. But though they matter as a group, they are insignificant individually. So don’t test them unless you have a very good reason to… unless you think they can make a very big difference.
What CAN double your response rate?
- your headline
- using teaser copy on your envelope
- the subject line in your e-mail solicitation
- your lead paragraph
These are the most important copy tests, because they incorporate - in the most visible way - the fundamental promise of your promotion. The most important job of the copywriter is to choose the "Big Promise" of the promotion. If you get that right, you are 80 percent home.
What else can make a difference?
- your offer (an often-overlooked element)
- the length of your sales letter (longer is usually better)
- the size of your package
- the number of premiums offered
There may be a few others - but the point I’m trying to make here is that the number of things you should test is (1) probably smaller than you thought and (2) certainly smaller than you’d surmise if you listened to most experts. Remember, most of those direct-marketing experts are copywriters who see, relatively speaking, very few test results and aren’t responsible for the bottom line.
[Ed. Note: Michael Masterson is one of the marketing experts behind ETR's brand-new Internet business-building program. This breakthrough program gives you an all-inclusive, A-to-Z blueprint for starting your own powerhouse Internet business - from learning how to pick a product and set up a website to discovering copywriting secrets from the masters, techniques to help you create an e-mail list, the best ways to market your product, and more. Getting your name on our hotlist is likely to be your only chance to get into this very limited program, which we expect to sell out quickly. Hotlist registration closes today, so hurry.]
Wanted: Investors Who Want to Grow Rich the "Lazy" Way
It doesn’t take a lot of time. You don’t need a lot of money to get started. It doesn’t require a lot of work. Best of all, the returns you’ll pocket will shock you (how does 724% sound?).
Get all the facts right now here.
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A Driving Tip for Aching Knees
Have you ever noticed a dull ache in your knees while driving in stop-and-go traffic? It’s always right in the front, and seems to gnaw at you, just under your kneecaps. This is especially common in people who have long legs, because they’re driving with their knees deeply bent and nearly touching the dashboard.
What I’m describing is a condition called chondromalacia patellae, a degenerative softening of the protective coating of cartilage under the kneecap that can occur from injury, age, or misalignment of the kneecap (from anatomical variations or muscle imbalance around the knee). It is also the most common cause of pain when climbing or descending stairs, kneeling, squatting, running, or jumping.
One simple way to get some relief while driving is to change your car seat to the "European sports car position." Slide your seat way back, until your legs are as straight as you can make them while still being able to reach the pedals. Pivot on your heel, between the accelerator and the brake, and bend your ankle, rather than your knee, to operate the car. Your arms will be straight out from the shoulder as you grasp the wheel. Once you get used to it, it’s pretty comfortable.
In this extended position, with your knees straight, the kneecaps "float" above the rest of the joint, without any pressure, thereby relieving your pain. Try it. You’ll feel the difference immediately.
[Ed. Note: Dr. Bill is the online handle for William Thomas Stillwell, MD, an orthopaedic surgical specialist who was Chairman of Orthopaedic Surgery at his hospital and Associate Professor of Clinical Orthopaedic Surgery at SUNY, Stony Brook. He is currently founder and CEO of Dr. Bill's Clinic Inc., and is the author of Dr. Bill's Little Green Book for Eliminating Knee Pain. To sign up for his free Pain Relief Secrets, go to his website, www.drbillsclinic.com.]
Worth Quoting: Jack Welch on Weeding Out Your Worst Employees
"It’s letting the bottom 10 percent know where they are and then giving them a chance to move on. About 70 percent (of the bottom 10 percent) leave on their own. Who wants to be on the bottom once they know it? You don’t fire them. That’s being mean. This is not a mean-spirited thing. It’s you sitting across the table from me and telling me, ‘Jack, you’re not measuring up. You’re going to have to improve.’ If I don’t, you tell me that it’s best for me and my family to find someplace else to work."
(Source: USA Today)
It’s Good to Know: Pain-Free Injections
Good news for those who hate shots. Researchers in Wales have found that recently developed micro-needles are safer and less painful than regular hypodermic syringes when used to inject vaccines and other medicines. Volunteers reported five times less pain with the micro-needles, which are smaller than the width of a human hair. The researchers also found that micro-needles caused less skin trauma than conventional hypodermics.
(Source: Science Daily)
Start Making Money Today
Interested in getting a nice little side-business going on the Internet? Or maybe even from your living-room table?
But you don’t have too much money, you don’t have too much time, and you’re not exactly Bill Gates when it comes to technology. Sound familiar?
A lot of people are in the same boat. The good news is that ETR has heard you. And now we’ve done something about it…
We’ve asked our colleague Marc Charles to be on the lookout for profit opportunities that can be run from a kitchen table, your desktop or out on the road.
Criteria? They’ve got to be inexpensive, easy to start, and still have great income potential, but without a lot of red tape.
They say when you’re first getting your feet wet with a side-business, the most important dollar to make is the first one. Well, Marc is an expert at taking beginning entrepreneurs and showing you how to make that first buck. He knows, because he’s done it dozens of times for himself, his family and his friends.
If you’ve been dreaming about starting your own business… now you can get started for about the price of 2 lattes.
And get this - you could be making money literally just hours from now. Imagine the feeling of finally getting a side business launched - TODAY!
- Patrick Coffey
Word to the Wise: Apercu
"Apercu" (ah-per-SOO) - from the French for "to perceive" - is (1) a quick summary or (2) a perceptive insight.
Example (as used by Michael Kinsley in a New York Times review of Alan Greenspan’s The Age of Turbulence): "Not all of this is wildly original, but there are great nuggets and apercus."
[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007