A/B testing: the secret sauce behind a killer acquisition strategy
This is the second article of our growth marketing series based on the popular AAARRR or pirate funnel. This framework will help you better understand user behaviour, from the very first stage of the buying journey (awareness) and data gathering and testing (acquisition) to spurring a user into action (activation), choosing retention strategies and the right revenue model and, finally, how to drive referrals.
This article explores the acquisition stage – all about the magic of A/B testing to help you craft effective digital strategies.
If the Awareness stage of the marketing funnel is about getting your name out there, the second phase is all about persuading the right customers to choose your brand. Acquisition is the second stage of the AAARRR marketing funnel created by Dave McClure – a guide to understanding user behaviour.
The acquisition stage is all about gathering information about your leads to help marketing specialists craft effective digital strategies through testing messaging, channels and funnels. We want to introduce our brand to users that we are mostly likely to convert – the ones that will eventually buy your product or service, and become loyal customers. This approach of constantly testing different angles and ways to reach the right users is known as rapid experimentation or growth marketing – a key driver in boosting customer acquisition.
Growth marketing vs traditional marketing
Think back to the days before the internet. You had one print ad, one billboard, one radio ad, etc. to appeal to a wide range of audiences. You got fast results but, after the sale, a customer was usually totally forgotten. With this one-size-fits-all approach, content was static and results limited because they were almost impossible to measure. Unlike digital marketing where you can track the number of people who watched a video or clicked a link, it’s trickier to know if someone bought your product because they saw your TV ad.
Growth marketing (or growth hacking) is a process of constant, scalable experimentation by zoning in on the entire sales funnel. It’s about learning fast what works and what doesn’t to identify the most efficient ways of growing your business.
What is A/B testing?
Like the name suggests, it’s comparing how two versions of the same marketing asset is perceived by two halves of your target audience – then rolling out this version to your entire audience. The one that has the best conversion rates is the one that performs best. For example, you could test two different subject lines or two different images on an email, then compare how they perform.
But it doesn’t stop with just one test – A/B testing also refers to a process of continuous testing to keep finessing your marketing to convert more prospects into leads and turn leads into customers. Some marketers call A/B testing Always Be Testing – constantly testing variables like images, copy, call-to-actions, channels, formats…the list goes on.
How A/B testing boosts customer acquisition
What’s the link between these split tests and customer acquisition? It’s simple: done right, it can dramatically drive down your conversion costs (average spent on to convert one customer) and increase your sales volume through scalable experimentation. Once we find a formula that works well, we increase our budgets.
Getting to the gold is quite a complicated process. There is no magic formula to generate conversion. Only through testing can you better understand which approach performs well (or not) with your target audience. Different audiences might respond to different formulas.
Here are just a few elements we commonly test in A/B testing:
- Channels: We can dedicate a whole article alone to the intricacies of each social media channel and which one will best amplify your ad or offer. Will you reach more of the right people on Facebook, Instagram or TikTok? Should you offer your incentive over a tweet or email?
- Types of lead magnets: Everyone loves a freebie or an incentive but only through testing will you find out which offer has the strongest pull. For a property company, for example, you could test a handy mortgage calculator vs an e-book on buying your first home vs giving 1% off commission. Other lead magnets include samples, trial subscriptions and free consultations – anything that is given away in exchange for someone’s contact details.
- Messaging: The words you use are all-important and with limited space, you have to be economical yet persuasive. Do you lead with the benefit first or the product features? The offer or the deadline? Only by playing around with different options will you find out what best appeals to your customers. In your ad copy you can test things like long text versus short, with emojis or without, etc.
- Audiences: At this stage of the funnel, you might have an idea of your customer personas and which channels they frequent. Paid social and other ad platforms allow you to have very narrow audience targeting. By constantly testing new audiences, you can identify new business opportunities you might not have considered, further enrich your personas and even find new ones.
- Visuals: Humans are highly visual creatures so the images you show are everything. Not only the choice of visuals but the subject matter – with or without people, showing the product in action or the free sample they’ll get.
- Formats: Besides images and videos, there are a dizzying array of formats to trial on social media, from carousels to polls.
- Page elements: If you’re using unique landing pages to gather customer data, these too have lots of puzzle pieces to move around, such as navigation items, forms, headlines and sub-headings, visuals, buttons and social proof (things like testimonials, case studies and reviews).
Why does A/B testing matter?
Because why guess if you can test, right? Small changes can result in some big wins. A/B testing can help you:
- Faster discover what works and what doesn’t, on a much smaller budget: Unlike the days of traditional marketing where you had to wait 2-3 months to see if your efforts worked, with a growth approach of A/B testing you can make quick discoveries on a small budget. If you’re successful, you can quickly scale your efforts; if not – you just try another formula.
- Better understand customer personas: A/B testing gives you invaluable insights on user behaviour and preferences, helping you enrich your personas and spot new opportunities. For example, you might discover that your product is favoured by personas you’ve yet to identity.
- Increase your performance: Because you are reducing friction (by making journeys as seamless as possible), you will increase sales volumes, boast increased conversion rates and cut down on your Cost Per Acquisition (CPA) – the metric used to measure the revenue impact of marketing campaigns.
We hope we helped to shed some light on the magic of A/B testing. If you want to create a culture of experimentation in your business, we have the experts on hand to set a plan in motion. Send us a message today and we’ll turn user insights into action!