“The goal is not to conduct perfect experiments; it is to make better decisions.” ~ Eric T. Anderson and Duncan Simester
If we knew exactly what our customers wanted, everyone could run a successful business. But you already know it’s not that easy because customers’ wants and needs change with the wind.
There is a way to get closer to the heart of the matter, to better understand their deepest wants and desires. This requires a convergence of art, science, and design to create a Test & Learn discipline by which businesses can innovate quickly to keep up with customer demands. You might be curious as to the benefits of a Test & Learn strategy and how can you use this methodology to drive innovation and future growth for your company.
Test & Learn Defined:
Simply put, Test & Learn is a set of experiments that allows a business to try out new ideas and concepts, either with a small subset of customers or in a limited number of locations (e.g. in only a handful of stores) in order to understand the impact on factors such as customer experience, sales, and employee productivity among others.
Whether you are looking to validate marketing campaigns, product development, new software systems, or website user experience, Test & Learn strategies allow businesses to innovate and stay relevant in an ever-changing market by helping them meet customer demands (that were previously unmet or unarticulated). Of course, not all ideas/concepts/products will win with customers (hence the name, Test & Learn), but using this strategy will allow you to shift and make changes more quickly to meet new demands.
Three Benefits of Test & Learn Implementation:
- Allows you to test on real customers (by subset or geographical location).
- Speed to market – prototypes are designed quickly and then tested and refined.
- Reduces the risk of innovation – real-time customer results eliminate the sole reliance on historical data and market research alone (which may not accurately predict desired outcomes).
Winning business strategies include rapid test-n-learn to vet the reiteration of product/marketing/systems concepts to better serve customers’ needs. Don’t waste time trying to get your offering perfected straight out of the gate.
Minimum Viable Products (MVP) are essentially simple prototypes developed in this fashion and sent to market. With data collected from sales and customer feedback, the product or offering is then refined to drive customer value and market share through organic growth.
Think Like An Artist & Scientist – Here’s What You Will Need:
- A creative workforce. Hire talent with creative and visionary skills – they are your best innovators. You can teach someone how to manage a P&L much quicker than you can build someone’s creative thinking skills. Creativity is at the heart of innovation and it shapes solutions to meet customer needs. The solutions designed by a creative team will be tested for validation and refined to maximize intended behaviors.
- A supportive and collaborative work environment that encourages the sharing of ideas. Foster innovation by breaking out of silos and focusing on cross-disciplinary team collaboration. Organizational silos that work independently often hamper progress by eliminating the teamwork and creativity necessary for innovation. To create forward momentum, eliminate favoritism and fear as these quickly degrade a collaborative environment and hinder creative thinking. Reward associates who are willing to take calculated risks.
- A proof-of-concept. Start small and specifically lay out what you want to test with your consumer base. To understand what works, you will only change one variable at a time.
- A control group and a feedback loop. Select your control group through randomization and make sure it’s large enough for statistical significance. If you’re not sure how to do this, an analyst can help define your test and control groups as well as the metrics that best define success. A feedback loop allows you to understand how consumers respond to different treatments and provides valuable insights into behaviors (actions they took) and perceptions (how they view the experience/product).
- Data analysis. Once you’ve conducted a test, it’s time to analyze the data and make product/concept enhancements so you can retest. To avoid analysis paralysis, glean data points quickly and move forward to your next educated assumption. An analyst will help you determine what’s working and what’s not based on your business objectives for the test.
“Innovation begins with the permission to fail. Adopt this mindset and engrave it in the hearts of your associates. Risk is only pursued when fear of repercussion is removed.” ~Andrea Cadelli
No matter how big and successful your business is today, the future belongs to those who are agile and focus on testing and learning. Don’t try to find one big idea and cling to it. Tomorrow it will be a thing of the past. If you’re waiting for an original idea to get started, shift your mindset and your strategy. Originality is rare in today’s digital world – you already have access to all the ideas. You must only take an idea and make it better to succeed. You can accomplish this by incorporating Test & Learn into your overall business strategy. Empower your team to experiment with many ideas and start testing, learning, and refining. Becoming a more agile company focused on innovation is the way to continue winning in today’s ever-evolving market.
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Christopher Baird, The Test & Learn Approach To Business Innovation; https://www.capgemini-consulting.com/blog/customer-experience/2017/06/the-test-learn-approach-to-business-innovation
Eric T. Anderson and Duncan Simester; A Step-by-Step Guide to Smart Business Experiments, HBR https://hbr.org/2011/03/a-step-by-step-guide-to-smart-business-experiments
Linda Naiman; Design Thinking Strategy For Innovation; Creativity At Work http://www.creativityatwork.com/design-thinking-strategy-for-innovation/
Rae Owen-Wolking, Test and Learn; https://www.harlointeractive.com/blog/post/test-and-learn
Rikke Dam Teo Siang, Test Your Prototypes: How to Gather Feedback and Maximize Learning; https://www.interaction-design.org/literature/article/test-your-prototypes-how-to-gather-feedback-and-maximise-learning