Six Important Lessons I Have Learned About Testing New Strategies, Products & Venues

Posted on January 20, 2009. Filed under: Amazon, eBay, Other, Tips - for the eBay Seller | Tags: , , |

test

True to my word, I have been spending more time away from the computer and enjoying myself.   Blockbuster is one of my favorite places since they stock new movies for me and new video games for my kids to rent.   I noticed a few weeks ago that the Blockbuster I regularly visit changed their pricing and their rental policies.   However, when I mentionned this to some of my family who live in another part of the country, they told me that the pricing was the same as before for them at their Blockbuster.   So, a few days ago when I was in Blockbuster to rent a movie I asked and was told that this local area is only one of a few areas in the country with the new pricing and policies since Blockbuster was doing some “testing” before making any changes nationwide.

Blockbusters’ consumer testing in my area got me to thinking about my own business.   We regularly do testing. We test different pricing strategies, shipping cost strategies, new products, new venues, different shipping services and more.   I have learned plenty about “testing” in the last 10+ years of hands-on training as a business owner.

1. Don’t underestimate the time and money the “testing” phase will take and if a testing project is worth the initial investment of resources, be sure to allow sufficient time to get accurate results.

Testing a new strategy or new product takes significant resources.   Often times, businesses underestimate the amount of time they will have to spend when undertaking a new strategy or adding a new line of product.   And patience really is a virtue during any testing phase.   When our company made the decision to try selling on the Amazon platform, we made a commitment internally to a one-year time frame.   We knew that one year’s worth of data would give us the best information to make a decision about whether Amazon was right for us.   Of course, we evaluated our Amazon efforts at 60-day intervals to determine whether we needed to alter our strategy to get the best results on Amazon.   The first 60 days on Amazon we barely covered our expenses but sales picked up on Amazon over the next few months.   Then we hit the jackpot during the Christmas holidays and sales have been steady after Christmas.   Had we made our decision after only 60 days on Amazon we would have given up and missed an amazing opportunity.

2. Learn from your competitor’s mistakes and emulate their successes.

Maybe you have sold toys for years and want to expand into a different area like household goods.   If you are considering adding a new line of product that you have never sold before, you will be competing against others who are already selling similar products.   Who better to learn from than your future competitors?   Try placing an order with them to see how the product is packaged for shipping and what additional information or items the seller includes with the purchase.   There is a wealth of information to be learned quickly from your competitors by placing an order with them.   Also, check out each of these seller’s feedback to see if there is a particular pattern of favorable or unfavorable comments that would give you a clue about something specific that buyers really liked or disliked about the product or the service a particular seller provided.   Read buyer reviews of the product to learn things about the product you might not have realized.   Amazon is a great place to read customer’s product reviews.

3. Be sure to limit testing to a simple strategy change rather than multiple changes at once.

If you design a test to offer different product pricing and shipping cost strategy on a new venue where you have never sold before then it will be really difficult to interpret the results.   Did the test fail to achieve the desired results because of the venue or because of the product pricing or because of the shipping cost strategy change?   Or was the test a success because of the venue or because you changed strategies?   It would be virtually impossible to tell. If you instead tried selling on a new venue with the product pricing and shipping cost strategy that you already successfully employ elsewhere and the results are not good then you could try tweaking things to see if changing the product pricing or the shipping cost on the new venue would make any difference since you might need to employ a different strategy for that particular venue.   Then if that still did not result in success, you could reasonable assume that the new venue is just not for you and your product.

4. Recognize when you are a (willing or unwilling) participant in someone else’s testing phase and consider delaying or abandoning your own test of new strategies in that environment.

Sometimes you, or your company, is a participant in a test and it is important to recognize that, as a result, you cannot create long-term plans in certain circumstances.   For example, it is well known that eBay is making so many changes on its platform that sellers can not realisticly plan more than one quarter at a time if even that far in advance.   eBay’s current”test” phase usually runs one quarter after which time they tweak or change policies, pricing structures, or things such as the Best Match criteria.   And sometimes there is no warning when eBay makes changes such as when they immediately prohibited all sellers from offering items such as eBooks or auction templates.   Conducting your own tests on a venue when you are a test subject yourself is probably not worth undertaking because the results of your test could be invalid only a few months later.   Test your strategies in a more stable environment, on a platform that is not full of volatility and is not undergoing constant testing.   After all, your goal is to plan the best for the future and you need to focus your efforts where you have the best opportunity to make a good long-term decision.

5. Surveys can yield good information but surveys are not a substitute for a real test.

Ask consumers a question about whether they will or will not do something based on certain facts and their “response” may or may not accurately reflect what they will do.   A consumer could have the intent to do what they say in a survey but when faced with a real purchasing decision, they may actually do something quite different.   Blockbuster could have sent out surveys and asked thousands of renters if new pricing structure and policies would change their renting habits but that survey would not have yielded nearly the accurate information that testing will.

6. Think about the effect of your testing on your core business and the effect on your current customer’s perceptions about your company.

If you have an ecommerce website, eBay store, or Amazon store where you are well known among your many repeat customers for selling a particular product line and you are considering adding a new unrelated product line, be sure to think about how your current customers will perceive your company adding a new line of product.   Could your current customers see you as less of an “expert” or less committed to the product line they buy from you?   Also, if you change your product pricing or shipping costs on some but not all of your current items then will this “partial” change (test) cause confusion?   Potential buyers who see item A offered at a shipping cost of $5 but item B, which is identical to item A except for the color, offered at a shipping cost of $8 will be confused and frustrated if they really want item B but do not understand why they should have to pay $3 more shipping simply because they want a different color.

 

I am looking forward to finding out how Blockbuster’s new test goes for them.   Based on what I have seen so far, I think the new pricing structure and rental policies will be a success and that they will ultimately roll out the changes nationwide.   And, as for us, we have learned a lot about selling on Amazon this past year and we are now looking forward to moving ahead in a big way on the Amazon platform.   I hope you join me on this blog in 2009 as I continue to report about our company’s challenges and successes this year.

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