November 14, 2023

How to Use Sprint-Based Digital Marketing Tests: From Market Validation to Funnel Optimization

INSIGHTS
Written by:
Tori Krouse

Sprint-based digital marketing tests are useful at many stages of company growth! Here are a few ways we put them to use.

Market Validation 💡

In the early-stage startup world, we’re constantly assessing opportunity spaces, ideating and evaluating new business ideas. Our goal is to validate concepts efficiently, so we avoid wasting time and money developing concepts that we’ll never build. We have many tools in our validation playbook that help us assess consumer demand, some of which you may already be using and others you might not have tried.  

One tool we always use is user research (shoutout userinterviews.com and pollfish.com). While we always look to interviews and surveys to collect qualitative and quantitative feedback, we never rely solely on these strategies to move forward. That’s because we’re wary that what people say is not always indicative of what they do. And while we craft interviews and surveys carefully to avoid bias (honorable mention to Rob Fitzpatrick’s essential read for entrepreneurs, The Mom Test), we know that when asking people about business ideas, they can be dishonest. It’s not necessarily because they want to be or even realize they are doing it. It’s that they will often tell us what they think we want to hear or become uncomfortable with the subject matter and feel they can’t be truthful. Or, they’re taking the interview or survey just for an incentive and have no intention of giving honest feedback. So, while these interviews are essential, we take them with a grain of salt and complement them with other tools.

Enter digital marketing tests.  

You might ask, why would you spend money on ads when you don’t have anything to sell and can’t generate ROI? That’s a valid question. The answer is two-fold.  

  1. Unlike in an interview or survey where the person is aware we’re evaluating a business concept and can feel pressured to say they are interested, with digital marketing tests, we can assess whether people are interested in our product or service in a real-life setting. In other words, they’re not aware they’re being tested, and by clicking on our ad and demonstrating engagement, they’re showing us that they are interested in our product or service in real life rather than telling us they likely would use our product or service in a fabricated setting. This can give us more confidence in our ideas than user research alone.
  1. While we’re not generating revenue, these ads don’t require a large investment. Rather, they are quick, have specific goals, and with strict test budgets, are cost-effective. The results deliver invaluable insights that can help us decide whether to invest more time and money on this concept. If the ad testing generates promising engagement metrics such as high click-through rates (CTR), and low cost per click(s) (CPC), it can indicate potential demand for the business idea in the market. If the metrics fall below average, we’ll be hesitant to move forward with the idea.  

Like user research, successful digital ad testing doesn’t guarantee that the idea is a success. Promising engagement doesn’t always translate to cost-effective conversions. It’s just one part of a comprehensive validation process and should be considered along with other factors like business strategy and competitive landscape. But if you’re looking for a tool to add to your validation playbook, sprint-based digital ad tests, when done correctly, are a quick and cost-effective method to validate business ideas in tandem with your other strategies. With a simple test brand, landing page, and dedicated ad strategist, you can do these tests too and be on your way to more efficient validation practices.


MVP and Product-Market Fit ✅

Once we have used our comprehensive toolkit to validate a concept, we once again turn to sprint-based digital ad testing, this time to assess product-market fit, customer acquisition costs and test our MVP.

We’ll set out on a 6–8-week campaign that isolates each variable of digital advertising to hone in on the “words that work.” In two-week intervals we’ll perform multivariate ad tests on various platforms to find winning combinations of audience, value proposition, and creative. With this process, we will uncover target affinity audiences, what platforms to reach them on, the messages that resonate with them, and identify what creative engages them most. These winning ads drive conversions, sending users into our MVP, helping us to understand what’s working and what’s not, and at what cost. For instance, if your business plan says that you cannot pay over $50 for a customer to keep the business profitable and these tests don’t put you anywhere close to that number, you will have some rethinking to do.

These learnings help us uncover whether our business idea aligns well with the needs and preferences of the target market, whether there is a potential product-market fit, and whether our MVP is on track to solve their needs at a cost that will make our business profitable.  

Scale 📈

The benefits of sprint-based digital ad tests don't stop at MVP and product-market fit. In fact, we have seen tons of growth-stage companies overspend on marketing with minimal ROI. Why? There is a piece of the funnel that is broken, i.e. a step of the funnel where there is a ton of drop-off, but they have not stopped to discover it. They may have gotten too comfortable and lost sight of how to engage and convert their audiences effectively. Trust us. We have seen mature companies run these tests and improve awareness metrics by 10% and reduce conversion costs by over 50%!

No matter what stage of growth you are at, if it’s been a while since you have run sprint-based digital marketing tests, there’s a benefit to running it back. The sprint-based method is reliable; it uses an iterative and data-driven approach to optimize your funnel. With a test budget and 6-8 weeks of your time, you might learn you have been neglecting a digital advertising platform, or your landing page header is confusing. The insights gained from these tests will help you build successful campaigns. Bottom-line, you are never too mature to test your funnel, gather data, and learn from the results. You might find you can improve your customer acquisition cost (CAC) and return on ad spend (ROAS) substantially and even find new audience niches that love your product.  

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In summary, sprint-based digital marketing tests can be used by various businesses at various stages of growth. If you want to ensure you’re not overpaying for customers, you’re a candidate. It’s not rocket science and doesn’t take a significant investment. Still, with practice, you’ll develop a repeatable playbook that can make your tests much more efficient and give you baseline metrics relevant to your business.  

We hope this article gives you the tools and motivation to give these tests a try! And if you want help, the Creature brand experience studio team has run tailored words that work campaigns for all types of companies: validating business concepts and optimizing acquisition funnels along the way! Reach out - we’d love to hear from you.