Wednesday, July 7, 2010

This is a test

The wonderous quality of science - its core - is the inherent ability to check up on a hypothesis. Scientific inquiry allows us to make a guess and then use our smarts to try different ways to understand if we guessed right or not. And beautifully, you can always go back and check again. Pure science puts forth that the checking is never done, and that infinite variations can be explored.

In math, the outcome of a hypothesis must be exact. In engineering, good enough is close enough. In physics, the outcome can be squishy and hidden within a cloud of not well understood rules in different environments. The human behavior science known as marketing puts all these back of the pack when amorphousness is considered the outcome; you just never know. Will this work? Have no idea. Why did this happen? Never know for sure. Can I reproduce these results? Can't be certain. So when my CEO asks me if I'm sure spending money on advertising is a good use of the budget, I can only offer my opinion. Certainly, I can prove the converse. Not advertising absolutely has a dramatic effect on lowering sales. But is one type of spend or another better? Is increasing the budget going to deliver more sales? I sure hope so. Unfortunately, when a CEO only looks at a spreadsheet to tell how the business is running, advertising only looks like an expense. And an - pardon the pun - an expensive one at that.

Ah, but sweet science offers the music to soothe a spreadsheet lover's ears. Test measurement delivers the opportunity, and I dig it. Our latest campaign featured Facebook ads on the local sites. So all those social networkers (networki? networksters? what is that term?) checking their Facebook pages 20 million times during the month of June in Wisconsin saw two different versions of our ad. How cool is that? A simple proposition, which of the ads is more popular? Is it the price point or the features/benefits? What captures their imagination and drives them to click? Only two choices...well, there is a third and that is to click not at all. But what does that tell me? Then I have to compare click throughs to a standard for Facebook advertising, which the current advertising agency can't provide - too new a medium.

Alright, so the choices are coupon phone or $35 unlimited talk, text and web. If the price point body slams the coupon phone concept, we're dead. Then it's either an expensive education campaign to get people to see the value of the coupon phone (and get them to click all those coupons), or we're in a race to the bottom on price and we should expect to go lower and lower over the year until our competitors vomit as they find the price they can charge for their product won't pay their bills. Problem is, we could find ourselves in this boat too. Don't want to land there, let me tell you. So it's coupon phone or nothing.

My doctoral training is in quantitative methods research. Statistics are my friend. Cross tabs, regression, ANOVAs, MANOVAs, cluster analysis, factor analysis - these shape my understanding of data and I revel when the moment comes when the data speak their secrets. I recall my first days in market research back in the early 90's when 500 pages of data yielded that Snapper Lawnmowers needed to sell to families with kids, cause that's who was buying them and considering buying them. Simple as that. 500 pages to say that one thing. Left an impression on me. Ever since I've adhered to the single statement when explaining research findings. Give people the key, and cut the noise.

Two ads. One winner. Serious consequences. Righteous.

And the winner by a hair is Coupon Phone. Whew. In every market, the coupon phone concept outperformed the $35 rate plan message in driving click throughs. Not by much, but enough to be significant without a type 1 or type 2 error. I can only speculate that people are curious about the combination of words "coupon" and "phone" placed in order. The ads themselves were colored similarly (black, white and red), and there were no flashy graphics or movement to draw attention. I can only assume the more than 10,000 who clicked on the ads in total engaged the messages with some affinity and curiousity. What better could I have hoped to achieve?

Since the two messages were so close, and the brand so young, I've decided for the banner advertisements we've just launched to proclaim more of the bifurcated messages. A twofer on 99.7 fm The Wolf country music station site among others to pique the interest of visitors. My goal is to understand before launching a widespread campaign if the coupon phone message can stand on its own. Can I get away from the crush of the price point? And further, can I get people to see value in the coupon phone beyond the price point, so that when competitors match the monthly charge for unlimited talk, text and web those who hold coupon phones will be loathe to release the phones from their grasps. Can't let anyone head for the exits. At least, not without testing why.