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Rocket Science - 4 top tips for Designing Growth Experiments that Convert

I've joined the latest PowerMBA cohort with the opportunity to share with the world what I've taken away from their course!

This will include a deep-dive on various topics from 'Engines of Growth' to value proposition and everything in between.

You can find out more here!

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Remember science class at school? Fun perhaps or boring - one of the two.

Either way, you will have likely encountered many experiments of all shapes and sizes.

From exploding foam in Chemistry to growing bacteria in Biology.

What ties these ‘tests’ together is an outcome.

Raw data.

Not only is it key for research, it’s equally critical for a business to survive.

Let me walk you through the reasons why I wholeheartedly believe that taking this same experimental approach is essential for growing your customer base.

Before we begin, let’s pick a handful of key metrics that any business needs to know.

  • CAC (Customer Acquisition Cost)

  • MRR (Monthly Recurring Revenue)

  • Conversion Rates

What ties each of these metrics together? They are all ‘lag’ indicators - i.e. a result that is directly impacted by ‘lead’ indicators that we’ll touch on later.

Essentially, the goal with experimentation is maximise our outcomes by testing with messaging, strategy and much, much more. Let’s get started!


1) Make one change at a time

A key principle of testing is to make it a ‘fair experiment’.

This essentially means that we must only change 1 or at the very most 2 factors at any given time.

Why?

To ensure that any change in the outcome (e.g. conversion rate increase from 2% to 5%) can be directly attributed to one cause.

Let’s take a landing page for instance.

Within your page, you could:

  • Update your messaging

  • Change size, colour of your CTA button

  • Add or remove content

  • Change visuals

Plus many, many more tweaks.

If you changed everything at once, you are suddenly faced with the reality of not knowing what had an impact and what didn’t.

One step at a time!



2) Notice your biases


The beauty of data is that it never lies.

Use this to your advantage.

As humans, we have a very hard time being impartial.

Especially if you are a founder or part of an early stage team.

You are quite literally tied to the outcome!

In this case, be proactive in tackling your beliefs surrounding growth strategies.

Be entirely unafraid of testing a new approach previously never tried.

For instance, you may look into:

  • Influencer campaigns

  • Guerilla marketing

  • Instagram competitions

  • Facebook Ads

Let the data drive your decisions and you’ll be far better off!


3) Pick your data wisely

To play devil’s advocate with myself, not all data should be given equal weighting.

To take the classic line from Animal Farm...

“All data is equal, but some data is more equal than others.”

In the world of growth, it’s easy to get lost in the pursuit of ‘vanity’ metrics such as:

  • Social media followers

  • Likes on content

  • Email subscriber size

  • Website visits

Each of these metrics may carry some positive weighting, but they are rarely directly correlated with your desired outcome - more customers!

Keep a set of core data trends at hand and focus on improving these over time.



4) Failure is your friend

Last, but very not least is the importance of welcoming failure.

Given the familiar statistic of 9/10 startups failing, it’s clear that business is no easy ride.

Did you know that it took Thomas Edison 1,000+ attempts to invent the lightbulb?

Famously, he attributed his very success with the lessons he learned from these setbacks.

The same is true for you and your testing.

Here’s a few top tips to make the best of your shortcomings:

  • Keep a list of mistakes to avoid

  • Use 80/20 analysis to focus on 20% projects that gave 80% results

  • Find 1-2 key takeaways from each failure

  • Survey more customers (e.g. what messaging resonates most with them)

  • Don’t panic! Iterate and test again


Remember, the best discoveries are often made when we have the courage to take risks. Take action, iterate as you go and keep your eyes on the end result!

TL;DR

  • Make 1 change at a time

  • Be aware of your biases

  • Focus on meaningful data only

  • Welcome failure & learn 1-2 key takeaways from each setback

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Dec McLaughlin is a Business Development Lead at tech startup BackHug (helping sore backs at home). He also helps run the Startup Grind Edinburgh Chapter & helps entrepreneurs lose up to 20lbs in 90-days via his DM Nutrition coaching business.

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