Experimentation is a testing process used to determine anything from how to message a new product, which audience group to prioritize, or where to optimize the checkout process.
It is the repeated practice of launching experiments – identifying test variables (Control vs. Test Cell) to prove or disprove a hypothesis through a standardized methodology. When companies commit to developing a repeated experimentation practice, it can become embedded as a capability that helps inform key business decisions and drive long-term growth.
Experimentation capabilities can help you drive business growth through a focus on data, willingness to learn, and commitment to innovation. Several companies that have developed an experimentation capability have seen ROI increases of 20% or more.
Experiments provide you with data-driven learnings, giving you real-time insight into your customer. Rather than relying on opinion-based inputs or 3rd party research to inform your decision-making processes, you can deploy a test to understand your customers’ behavior and how it relates directly to your business goals.
Of course, not every test will be successful. Some experiments may fail, or a hypothesis may be disproven. However, when you shift your mindset from looking at these situations as “failures” but instead as new insight opportunities, you will foster a willingness to learn and embed an experimentation mindset within your team.
As the experimentation capability becomes part of your day-to-day operations, it will help unlock new areas of opportunity, build unique approaches to problem-solving, and fuel innovation, helping you deliver long-term growth for your business.
1. Identify areas of opportunity and prioritize potential learning value
Before you can begin experimenting, you need to identify the areas that will drive meaningful impact for your business, taking into consideration the level of effort required to answer a question and the potential impact the answer could deliver for your business.
Outline a business objective and prioritize the key questions for experimentation based on ability to support your growth goal.
2. Define a methodology and KPIs
Once the business objective and key experimentation questions have been defined, identify your methodology and KPIs. If your overarching objective is to drive an increase in sales behind a specific product but your methodology measures cost per click as the primary KPI, you may not be able to scale the learnings to drive meaningful impact. Selecting methodology and KPIs that will be able answer your key questions is essential in building an experimentation capability.
3. Develop a plan to scale learnings
Experiment results without a commitment to deploy those learnings will not deliver value. In developing an experimentation capability within your business, you need to define the level of robustness required to feel confident in experiment learnings and build a plan to scale learnings once that threshold has been met.
Experiment results may not always give you the answer you expect but maintaining a focus on how and when to leverage those learnings will ensure your investment in experimentation drives growth.
4. Align on resources
Experimentation capabilities require resources – both from a people and financial perspective. Build a cross-functional experimentation team by identifying people who exhibit an experimentation mindset and empower them with decision-making capabilities. Then, commit to both time and financial requirements. In order to maintain the experimentation muscle, it needs to be regularly put into practice. If the resources are not there to support a continuous process, the capability will deteriorate over time.
5. Get buy-in from key stakeholders
Support from the top will be essential in motivating your team, securing resources, and creating an experimentation mindset. While your leadership team does not need to be involved in the technical details for each experiment, their sponsorship of the process and passion for results will help build experimentation as a core capability within your organization.
Leaning into experimentation capabilities will provide you with real-time insight into your customer, data-driven learnings, and agile decision-making skills. Today’s investment in building this capability will become one of your business’s superpowers and help you transition through each growth stage.
