The cost of waiting

Many CRO experts are hardcore believers in statistical significance. And I am too.

It’s fantastic to make data-driven business decisions based on real world evidence. Marketers guess too often.

But where the hardcore reliance on significance can let you down is when it becomes the driving factor in decision making. I see people holding out for a specific level of significance all the time and it distracts from the core mission – incremental growth.

The truth is, there’s nothing magical about 95% statistical significance, 99% or even 75%.

So when it comes time to deciding whether to end a test or keep it running to reach a magical significance level, it’s important to assess risk.

As CEO of New Republique, Nima Yassini writes, there is risk involved at every level of significance.



There’s also a massive cost in waiting.

Another factor to pair with risk appetite is opportunity cost. By delaying the end of one experiment by one month to seek 95% significance you are also losing the opportunity to run the next experiment on that page or other pages.

So waiting for that magical significance number can end up costing you more than what you were prepared to risk initially.

This is especially true for high traffic websites. Any delay in implementing your next test could really cost you.

So let’s not get caught up in reaching a certain level of significance for significance’s sake. It’s all about weighing up the risk and acknowledging the opportunity cost that comes with delay.

When to test

People often ask me:

When should I run a test?

My answer is usually:

If you can test, you should test.

Why? Testing gives you answers you won’t get any other way. Answers like:

  • Does this variant convert customers better than what we had before?
  • Does it keep customers active?
  • Does it retain customers better?
  • Does it improve average order value, average lifetime value?
  • Does it grow our profit?

Now

When deciding what to do next, try to avoid the urgent.

Urgent is rarely important. Urgent rarely brings long term value.

So ask yourself, what should I do next that will return dividends well into the future?

Like compound interest, these small, regular investments will accumulate over time and turn into something massive.

 

 

 

Don’t stop

Don’t stop testing.

There’s no such thing as finished anymore. In business, your competitors will fly past you the moment you stop.

Anyone can launch a startup in your industry, this afternoon.

So if you stop moving, you’re going backwards.

The beauty of testing is that you can learn something new each day. It could be as simple as ‘that didn’t work’.

The trick is movement. Momentum.

That’s what keeps you in the game. Not every swing will be a home run. And that’s perfectly acceptable. What’s not acceptable is paralysis.

Experimentation

It’s more than running A/B tests.

It’s more than white lab coats.

More than reaching statistical significance.

It’s a state of mind. A worldview where you’re willing to fail.

A way of thinking that challenges the way you run your business. Experimentation means you’re willing to start from scratch and learn exactly what your customers want.

It trades everything you thought to be true for things you know to be true.

It never stops.

And it’s the only sustainable way to grow.

How to structure difficult conversations

When going into any meeting, presentation or especially a challenging conversation, it really helps to have a framework to structure your thoughts.

Barbara Minto’s ‘Pyramid’ structure is one I’ve just learned about and it’s very effectvel.

It goes like this:

Situation

Set the context, environment and go through any supporting data. Generally give the lay of the land or the key facts so far.

Complication

What’s gone wrong? How are our plans threatened and what’s the potential impact? Explain how and why it’s got to this point.

Question

There’s nothing better than a question that you already have the answer to. Summarise the complication with a question that prompts a resolution… and then give your pre-prepared answer.

Answer

State your proposed solution. Then, explain how you go there. List as many fact-based reasons you can as to why this answer is the best way forward. If someone shoots down one of your reasons, don’t panic! Keep going through the list like a ruthless prosecutor.

At the end, take any questions and address any concerns. If everyone is on board (they should be, because you overwhelmed them with reasons to be), allocate actions so that the solution can come to life.

Even if the four steps above don’t go to plan, at least you had one. Appearing in control is a victory in itself and will help you influence the outcome more often than not.

 

Quality or delivery

Success has just as much to do with communication as it does with talent.

Knowing who is doing what, in which order, while the project is in motion, is the key to achieving an outcome on time.

Talent, skill and hard work are known factors that impact quality.

Less stated, however, is the need to coordinate, communicate and plan. 

Without these 3 things no one will ever see the finished product, which is a huge waste of effort. 

Talent + skill + hard work = quality of product. 

Coordination + communication + planning = delivery of product. 

Asking the right person

 

A lot of time can be saved by getting the people who actually do the work in the room early on.

Usually, time spent talking about possible challenges and solutions is completely wasted because no one thought to ask the person who will do it.

Ask yourself:

  • What do we need to do
  • Who does it
  • When does it need to be done

But don’t ask:

  • How do we do it
  • What happens if we do it like this
  • Why can’t we do this

…until you’ve got the right person answering the questions.