Testing is the mantra of our industry. Most people recognize its importance in creating more conversions. However, most companies will not test. In so doing, they embrace bad assumptions and leave a helluva lot of money on the table.
Recently, I was reminded of the parable of the bell and the cat. As the story goes, there were some mice who lived in great fear of a cat. The cat watched the house so carefully that the mice never dared to venture out from their holes in search of food. They were therefore in danger of being starved. In their dismay and desperation, the mice called for a meeting to discuss the matter. While they were talking the situation over, a very conceited young mouse stood up and said:
"Dear friends, after much deep thought about this situation, I have discovered a plan which will save us all. I propose that we tie a bell around the cat's neck. That way, we will always know where the cat is."
Then the conceited young mouse sat down amid great applause. All the mice were delighted with the solution. However, one old mouse who had not said a word then spoke out:
"I agree that your solution is indeed excellent. And since you have been so clever to think of it, perhaps you will also tell us how to carry it out? I want to know who is going to bell the cat?"
The point of this parable is that tactics and strategies have to be realistic if they are ever going to be executed.
A great example of realistic tactics and strategies is the case of America Online, the Vienna, Virginia based company that demonstrates this principle perfectly. In the mid 1990's, there were several very well financed companies who were positioning themselves for the growing Internet Service Provider marketplace. Among those, Sears the owner of Prodigy, H&R Block the owner of Compuserve, IBM and a new startup called America Online, who were all pursuing different tactics to capture the burgeoning internet service provider market.
By all standards, America Online was the longshot in the race. They did not have the resources or infrastructure in place that the other competitors had.
Prodigy was being marketed through 500 Sears Stores for $39.95 initial cost and $9.95 per month.
Compuserve was being marketed through television and magazine ads. It had been growing at 30 percent to 40 percent annually.
What was it that Steve Case, Chief Executive Officer of AOL, knew about this battle that the competitors didn't?
Two things.
- America Online knew that when it comes to purchasing new technology, customers will not tell you that they do not understand something. When customers do not understand something they do not purchase. They will simply go to a competitor who makes the experience more user friendly. High tech companies are famous for thinking that customers can successfully evaluate technological innovation. It is tantamount to asking children in kindergarten, "Which do you prefer, Trigonometry or Calculus?"
- Also, America Online had "hard data" they had tested. They had spent $250,000 on a test of giving away their software for free. The results even surprised them. Roughly ten percent of the disks that they gave away became paying subscribers.
With that kind of testing having been done, increasing the conversion rate was simply to "add more traffic." AOL was going to put a bell around the cats’ neck by simply giving away disks everywhere people congregated.
AOL gave disks away in computer magazines, at football games, at the post office, with Omaha Steaks purchases, on airline flights. All in all, they gave away over 250 million disks. However, the brilliance of their strategy was also that they had worked through the assumptions the better established giants were embracing.
Most "newcomers" to the Internet did not know how to install software on to a computer. The AOL install was so simple that a child could do it.
Within a very short period of time, the AOL free giveaway was the brunt of every comedian’s jokes. However, it was AOL that was laughing all the way to the bank.
Within a few years, Prodigy and Compuserve cried "UNCLE," never to be heard of again!
Within six years, AOL took over the largest media conglomerate, Time Warner. All this from a contender who was not taken seriously by its competitors. The lesson to be learned here is that you can put a bell around the cats’ neck if you have superior plans, tactics and strategies backed by hard data.
Just think of the value that AOL created for all of its new subscribers. A user friendly World Wide Web experience! No muss. No fuss. And more importantly, the scary cat was now wearing a bell.
The moral of the story: You can create tremendous value and dramatically increase conversions when you ADD traffic based upon data acquired from the TESTING you have done. That is how professionals increase conversions.
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