What is ‘test and learn’ marketing?
Test and learn marketing is a data-driven approach to constantly optimizing Strategies and to improve the KPIs performance of recommendations made from PEGA Decisioning Simulation capability through a series of ongoing tests. It allows organizations to convert insights into hypotheses and then test those theories to prove their value. Primarily to improve the take rate of recommendations made from PEGA OR it could be improving the revenue AND/OR margin for an Organization. It also could be a two different variant of the Treatment for the same action to the same channel. Eg. Having two variants of the Email treatments for the same Action. This is a perfect example of test and learn marketing.
Test: Taking the guesswork out of marketing
Test and learn principles remove this speculation by building a data-driven system that proves the success and failure of individual marketing strategies. Instead of relying on correlative insights, we can run the PEGA Simulation to attribute meaningful KPIs to each change, measure performance and test variations to determine which strategy is most effective.
Learn: Turn insights into better marketing decisions
The learn aspect can be as simple as finding out which hypotheses are correct and prioritizing them in order of value (which meets the Organisation KPIs objective already set). We can also learn from previous experiments (and their data) to create new hypotheses or determine which testing opportunities meeting the marketing KPIs.
We could also leverage an existing PEGA Decisioning Machine learning AI capabilities like Adaptive Modelling, Predictive Modelling to experiment to spot opportunities for testing, makes recommendations based on your results and predicts the outcome/value.
A good test and learn marketing principles has two main objectives:
Increase conversion rates through testing variations.
Learn from previous tests and apply findings to future marketing decisions.
We run a series of tests to determine the best outcome for specific scenarios and we collect all of this data to spot patterns and inform smarter marketing decisions.
By applying a test and learn model to all of our marketing campaigns, we can improve every aspect of brand performance with data-driven insights. The more tests you run and the more data we collect, the more reliable these insights become and the more robust our marketing decisions will be.
Some of the example of Goal for Test-and-Learn approach
Measure the Impact of Decisioning Framework values (Real Time Controls) changes and to align Organizational KPIs
Test the effectiveness of different treatments for the same Action for the same Channel Eg: Keep different Email Treatment (Title and/or content) for Control and Test to measure the impact
Determine which Treatment Content generate the highest engagement.
Test the potential value of a new Channel.
Calculate the lifetime customer value of leads based on acquisition channel and their position along your marketing funnel.
Identify negative friction that’s preventing leads from converting into customers.
Optimize marketing funnel to reduce dropouts and maximize conversions.
Optimize the customer experience to maximize repeat purchases and lifetime customer value.
A test and learn model can be applied to any marketing objective and campaign type where we want to maximize performance and collect insights to inform better marketing decisions in the future.
How to apply a test and learn model in PEGA Decisioning & Marketing
Some quick overview of the key steps to take in test and learn model are:
Define goal and KPIs: It’s crucial that Organisation should have a specific goal in mind and understand which KPIs truly measure success. It could be higher engagement reate, higher order rate, improving revenue, margin and reducing churn etc.
Develop hypothesis: This is the theory that your tests will prove or disprove – to achieve the same KPI, there could be different school of thoughts. Ideas will help us to develop hypothesis.
Create testing criteria: To get meaningful results from tests, weneed to define strict testing criteria and remove every possible variable that might skew the desired outcome.
Test ideas with the highest potential first: This will have the biggest impact on performance and collect the most valuable data early on – but it also ensures that our test and learn models achieve a positive ROI as soon as possible.
Run your tests until statistical significance: This ensures your results are reliable enough to inform decisions while mitigating for variables outside of your control.
Turn insights into action: Individual results help you make specific decisions but collecting data from all of your tests helps you to make informed predictions and decisions for future campaigns – for example, which ad format is most effective for your campaign message or how much to bid to achieve your target reach.
Measurable success post implementation: Once right Strategy has been identified, implement the hypothesis produced results closed to KPIs and make the BI tools in place to measure the success/failure of the recent change.
Apply Continuous Improvement Technique: By learning from successes and failures, we continue to do what works and constantly improve upon what doesn’t
This test and learn approach can be applied to any marketing strategy and, PEGA Customer Decision Hub Simulation capability would help to achieve the possibilities in a quick turn-around time.
Happy Learning!
Nanjundan Chinnasamy
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