optimization

How To Form A Culture Of Experimentation [Step-By-Step]

By David Hoos
11 minute read | Last Updated: June 23, 2017

One of the major drivers of successful and innovative companies is their experimentation culture. To build a culture of experimentation in your own company, follow these steps.

In our years of experience, we continually find that companies that pursue a culture of experimentation will often have the best experience with conversion rate optimization.

We’ve found time and time again that those who experiment the most, are able to innovate the best. Regardless of whether each experiment is successful, each lesson is helpful because it can provide insight.

Those who experiment the most, are able to innovate the best. Click To Tweet

In fact, if there’s one company that personifies the ups and downs of having a culture of experimentation, it’s Amazon.

Remember the Amazon Fire mobile phone? It was going to be the next big thing, challenging Samsung and Apple for supremacy in the mobile market. One of its big selling points was the ability for users to scan a product in a brick and mortar store and then immediately find it on Amazon for cheaper.

Everyone was excited, thinking this was going to be Amazon’s next Kindle.

Except it wasn’t. It was a terrible, colossal failure. Users didn’t like it, and it got an embarrassing 2.6 rating on Amazon. The company stock stumbled, and it appeared to be a significant setback.

culture of experimentation

But that hasn’t stopped Amazon from continuing to experiment in the phone market. They are apparently working on a new phone codenamed “ice”, hoping it fares better than the Fire.

Why does Amazon keep experimenting with the phone? Because experimentation is part of their culture. That’s how they’ve achieved such massive success, with one smash hit after another, from the Kindle to Amazon Prime.

Founder and CEO Jeff Bezos says:

“One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there.”

And Amazon isn’t the only company that has used experimentation to climb to the top of their industry. Google constantly forays into new markets, often with disastrous results (Google Glass anyone?). Nevertheless, Google still has achieved dominance through their successful products.

Bottom line: Wherever you find growing innovative companies, you usually find companies that are willing to experiment.

Here’s why this matters to you: conversion rate optimization hinges on experimentation. You can’t sell your products unless you can get people to buy. And you can’t get people to buy unless you know what works and what doesn’t. And you can’t know that without strategic experimentation.

Conversion rate optimization hinges on experimentation Click To Tweet

Ultimately, a culture of experimentation is essential to the success of your company.

So how can you emulate Amazon and Google? How can you create a culture of experimentation in your own company?

Here are 6 steps in creating organizational culture of experimentation. By implementing these steps, you’ll create an environment where testing, tinkering, optimizing, and even failing is integral to your DNA. When these are in place, you are primed to significantly increase your ecommerce sales.

Step 1: Get Comfortable With Failure

If you and your employees aren’t comfortable with failure, you won’t be able to create a culture of experimentation. As Bezos noted, experimentation inevitably leads to many failures and the occasional home run.

The home runs are worth the failures, but that doesn’t make the failures hurt any less.

If your employees aren’t comfortable with failure, you won’t be able to create a culture of… Click To Tweet

Former Marketing Executive and Tech Advisor for Porch, Joanna Lord, described how they celebrated failure in the company:

“And every time you break the site, whoever breaks the site the worst gets Mr Sparkles for a week. You put him on your desk and it’s like this badge of honor that you like did something so bold that you literally messed up the site badly.

And you know what I love? You see my CEO walk around the room and he’s high-fiving the Mr. Sparkles owner. And people are like, “What did you do? What did you do to get Mr. Sparkles?

But the reality is we’ve made it a positive thing. We’ve made it a badge of honor. You are living out the Porch-y way in being bold. What can you do in your culture to make it fun and acceptable? And almost, you know, become famous for it.”

The first step in creating organizational culture that embraces experimentation is making failure part of who you are. You’re going to launch products that just don’t work. You’re going to create new sections of your site where the conversion rate is abysmal. That’s not the end. Those things can be fixed.

If you want your employees to be comfortable with experimentation, they also need to be comfortable with failure.

Step 2: Start With Small Bets

You never want to experiment to the point where your company will succeed or fail based on a single experiment. Rather, consistently take small bets that will allow you to get a sense of what works and what doesn’t.

culture of experimentation

This small bets methodology has been crucial to Amazon’s success. Over the years, they’ve tested out various products and methods to see what resonates with customers and sellers.

This small bets methodology has been crucial to Amazon’s success. Click To Tweet

The company crushed it with Amazon Prime and the Kindle… and totally flopped with Amazon Destinations (hotel booking), Endless.com (a high end fashion site), and countless others.

However, none of these failures dealt a significant blow to the company, and the successes generated exponential profits.

When you begin implementing small bets in your company, you’ll discover what works, then be able to double down on your successes.

Step 3: A/B Test Everything

One of the easiest ways to start making small bets is to A/B test everything, from your web pages to your email subject lines.

culture of experimentation

A/B testing gives you a huge advantage in that you can measure everything. You can see which buy button customers prefer, which emails generate the most clicks, and which pages customers spend the most time on.

You can measure these things down to fractions of percentage points, and then implement the ones that create the biggest results.

It’s one thing to have a gut feeling that something will work – it’s another thing altogether to see the data, which often proves gut feelings wrong.

As Chris DeRose told Investor’s Business Daily:

“As Amazon pursues growth through small experiments, they have tried to use data to trump intuition. The company culture embraces experimentation and Bezos recently said at a shareholder meeting that 99% of all innovations at Amazon are incremental. The company relies on “Testing in Production,” or TiP, methods such as A/B testing and ramped deployment. By showing user group “A” a different version of a Web page than group “B”, the company can measure how long they stay on the site, how much they spend, etc.”

Don’t rely on what you think will work. Take small bets by A/B testing everything, then let the data guide your decisions.

Step 4: Collaborate and Hypothesize

One of the most effective ways to generate ideas which can then be tested is to implement regular brainstorming sessions to design new tests. This ties in closely to taking small bets and then A/B testing them.

culture of experimentation

In order to find good ideas, you need to generate a large volume of ideas. You can’t effectively make small bets and A/B test unless you have a pool of ideas to choose from. Some of these ideas will be bad, but that’s precisely the point. You usually have to wade through the garbage heap in order to find the gold nugget.

So, for example, let’s say that you’re trying to determine why sales have fallen in the past month. You may hypothesize that your sales emails have been consistently less effective and drive fewer conversions than in the past.

But until you test that hypothesis, you won’t know if it’s true. So you dig into your data and examine the trends over the past 6 months. Then you create new emails and test those conversion rates against the older ones.

If your hypothesis is true, you’ve found at least part of the answer. If it’s false, create a new hypothesis and go through the same testing process.

Step 5: Appreciate The Effort

Initially, your employees will probably feel uncomfortable experimenting, especially if it hasn’t been part of the culture. Their first failures will be difficult, and they’ll be tempted to throw in the towel.

In order to combat this natural instinct, it’s essential that you highlight and publicly appreciate their efforts, even if they result in failure.

Praise employee experiments in your experiment brainstorming sessions. Personally encourage those taking small bets and risking failure. Even consider gamifying things, so that employees receive some sort of reward for their experiments and ideas.

Personally encourage those taking small bets and risking failure. Click To Tweet

If an employee takes a risk and on a particular product to see if it drives more sales, applaud their gumption, even if it didn’t convert more.

Your employees will follow your lead. If they see you encouraging and celebrating effort, they’ll be more likely to dive in headlong.

Step 6: Maintain An Innovation Mindset

One of the biggest hindrances to creating a culture of experimentation is the institutionalization of things. Methods and policies crystallize, and you eventually begin doing things because, “That’s always the way we’ve done it.” This inevitably leads to stagnation.

One way Bezos keeps Amazon from falling into this trap is by maintaining an innovative startup mindset. He tries to keep the company fluid and away from a “one-size-fits-all” mentality.

He says:

“We want to be a large company that’s also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness, and risk-acceptance mentality normally associated with entrepreneurial start-ups…There are some subtle traps that even high-performing large organizations can fall into as a matter of course, and we’ll have to learn as an institution how to guard against them. One common pitfall for large organizations – one that hurts speed and inventiveness – is “one-size-fits-all” decision making…We’ll work hard to avoid it… and any other large organization maladies we can identify.”

Start ups are constantly changing, always adapting to what their customers want and trying to discover the best way of doing things. In fact, some of the greatest startups (think Uber, Warby Parker, etc.) have succeeded precisely because they challenged the status quo.

If you want to create a culture of experimentation in your company, you must seek to maintain a startup mentality. This means you need to be willing to consider ideas that are different and don’t line up with standard operating procedures. You can’t shut something down simply because you’ve never done it that way.

Make room for new, even radical ideas. These are the kinds of nuggets that often lead to the big successes.

Additionally, you need to maintaining the constant testing mentality. You can always drive more sales and increase your conversion rates. Don’t fall into a stagnant rut and get comfortable. Constantly test new things. New designs, new copy, new email formats. You never know when you’ll strike a gold mine.

Don’t fall into a stagnant rut and get comfortable. Constantly test new things. Click To Tweet

Will You Step Outside Of Your Comfort Zone?

Creating a culture of experimentation will make you uncomfortable. It will force you out of your company ruts and on to uncharted paths. There will be times when you fall on your face.

culture of experimentation

But you can’t achieve great things if your goal is to avoid rocking the boat. Successful disruption occurs at the intersection of curiosity and risk. Amazon, Google, and others have succeeded precisely because they were willing to fail. They know that big wins emerge from the ashes of failure.
Will you embrace risk or will you stay comfortable?

About the author: David Hoos is Content Marketing Strategist at The Good, conversion rate experts who deliver more revenues, customers, and leads. David and the team at The Good have made a practice of advising brands on how to see online revenue double through their conversion rate optimization services.

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