Test Marketing: Fast, Cheap and Easy

If you’re a sole proprietor or small business owner, marketing can seem like a headache that just won’t go away. You might have lots of good ideas, but you’re not sure which ones to pursue. And, if you’re like most small business owners, you only have a limited budget to invest in marketing, so which marketing options should you pursue?

A really quick and dirty way to check out your ideas is to use test marketing. When you test market an idea, you implement the idea on a very small scale to a limited portion of your customers or “audience.” For instance, if you’re in the dry cleaning business and you want to try out a volume discount idea, you might test the idea by offering it selectively to people who regularly bring orders of $50 or more for dry cleaning. The people in this test market obviously do high volume and are probably interested in saving money.

Set a time limit for your experiment and keep track of the results carefully. Look back through your records and see how many orders these people brought in, how often they came in and how large the orders were. Then, see what changes, if any, your promotional discount created. See if you get an overall increase in revenue and profit. If there are no changes, talk to those high volume people and find out what’s on their mind. It may be that they already bring all of their dry cleaning to you and have no more volume.

If that’s the case, then try your promotion on the next tier of customers – the people who may bring you only pants and skirts, but who take their shirts to the 99 cent place around the corner. Offer a volume discount to this group of customers and see if they will increase their volume to get the discount. Talk to them and find out what’s important to them as you hand them a coupon for the next order.

If you run this experiment for a month or two, you’ll begin to really see the effect (positive or negative) on your bottom line. At the same time, the only money you’ll spend on this effort is printing up some coupons to hand to customers. If this really works, then you might consider increasing your investment in this idea and advertising it through newspapers or coupon services.

Test marketing is a great way to test out all of your ideas on the cheap and limiting any possible negative effects. Sam Walton, founder of Wal-Mart and Sam’s Club, once said that if you keep your expenses down you can afford to make a lot of mistakes and still recover. That’s the very essence of test marketing! Good luck and have fun!

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