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About This Episode:
There is one major driver of successful and innovative companies: experimentation culture. It begins with a willingness to ask the right questions and stay humble about the answers – data will drive your decision-making, not opinions. But, it’s easier said than done.
In this episode, Ryan and Jon cover the proven steps you can take to build a culture of experimentation in your own company and share examples of brands already putting the steps into action.
Listen to the full episode if you want to learn:
- How to start developing a culture of experimentation
- Mindset shifts you need
- 6 steps to building an experimentation culture
- Real-life brands that put this practice into action
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You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine, with Jon MacDonald and Ryan Garrow.
Jon, always a pleasure to connect and talk strategy and growth and opportunities. And today I want to take us down a road that you referenced in a recent article you wrote about the willingness for companies to experiment and how that becomes somewhat of the core of a successful business. At least online is the willingness and appetite for throwing things against the wall sometimes, but knowing you’re going to make mistakes and just continuing to go, but creating that culture becomes very difficult. And if you’ve got a company that comes in your pipeline, that is just old, rigid, stuck in their ways, it becomes very difficult to move that organization into a mindset that allows them to grow.
We were actually joking that if every company had the persona or the personality of just let’s experiment, figure out a way to grow, we’re going to make mistakes, let’s just do it. It’s like, what recession could ever happen, because there’d always be constant innovations. We’d be finding ways to grow. So I’ve got lots of questions and I know you’ve got lots of wonderful answers, but in getting a company to become a company that embraces experiments that many times will fail, where do you even start with that, as an outsider trying to convince a company they need to test things?
Yeah, well, luckily this is what I do for a living, right? Well, look, I think that it all starts with a mindset shift. So a culture of experimentation really begins with the willingness to just ask the right questions and stay humble about the answers you’re going to get. So you have to be willing to let data drive the decision-making instead of opinions. But so many corporations, especially the bigger they get, opinions hold a lot of weight. And especially the higher you go up the food chain, the more opinions there are.
I’m not suggesting those aren’t based in experience or valid to pay attention to. But if you really want to culture of experimentation, when it comes down to many things, you need to let the data drive that decision-making. So luckily, and we’ll talk about this today, there is a step by step process you can follow to really help you get comfortable with failure. Because that’s part of this, is you’re going to try some things and it’s not always going to win, and you need to be okay with understanding what failure means, and failure to me means learning.
You’re going to take something and you’ll learn from it. It’s not an easy shift. And I think that should be said up front, but to get results in experimentation and conversion rate optimization, which is my view on this, it also affects customer happiness, employee engagement, because you’re empowering your team to make decisions based on data. And you’re okay with that instead of having to run it up the food chain all the time, you can say, what’s the data say, go with that. So all of that I think really speaks for itself. And if you’re willing to make the mindset shift, you can have good results, but you’ve got to be open to it. And I think that’s the biggest barrier I see, so I wanted to start there.
Got it. Often I assume this, I don’t know if I’ve ever asked this question before, but I assume that most of the time when you’re engaging with an organization at the beginning, it’s not the owner that’s driving the CRO conversation. It’s generally the marketing team or the web team, whoever owns the sites. We need to be improving our site. We need CRO and then having to take the conversation up the chain, do you often find that these types of culture shifts start at the bottom and go up or does it have to generally go top down?
Great question. I think that normally what we see is it is that mid-level or VP of e-com who is really pushing for this, because the easiest place to have a culture of experimentation and change in this way is with digital. It’s so easy to run A/B testing on digital. I make it sound trivial, it’s not, but the reality is compared to testing changes in your supply chain or with doing product testing or, okay, we’re going to change manufacturers and A/B test our manufacturers. That’s quite a shift and can take some time and some budget to do.
Where with a website, you can pay a firm like The Good to come in and run A/B testing. The risk is pretty minimal because you’re going to be able to track the results pretty quickly, and the budget doesn’t need to be hundreds of thousands. So I think that’s one way to look at it, is normally it’s those mid-level folks who are driving it up. But I do think it’s important that the high level C level executives get on board, because if they’re not on board, they’re not going to give the support and the rest of the team around the e-com team, that’s trying to make this happen, it’s going to be really hard for them. So you really need to have that support from up above, even if it’s yes, I get it in your department, go ahead and make data-backed decisions. That may be all you need.
Yeah, I think it’s even just anybody in the digital realm is almost used to experimentation, almost. Google’s constantly changing, for example, and if you’re not adopting new campaign strategies in that, good luck keeping that going. In fact, a mutual contact of ours is a digital first business inside a massive multibillion dollar international conglomerate of businesses that aren’t digital first. Their organization inside that willingness to test and measure, it’s like second nature, because they’ve been digital for so long. But trying to get that through the larger org and allowing that culture to pervade is an uphill battle, because the perception of experimentation being difficult is so deep ingrained into the business world, I think, that it’s like you can’t experiment the supply chain. What are you talking about? In all the business I’m involved in, why wouldn’t we test it?
Well, that’s exactly it, but it all starts someplace. And the easiest place to start is in digital. So let’s say that mutual contact, they are able to really show that this is driving some results and really having some positive impact in their division. Then that will start to spread. It will catch on, but again, you need the C level executives to say, “Hey, this is working. How do we take this into other areas?”
Okay, we’ll move beyond the fact that companies need to experiment and test to continue growing and innovating. I think if that’s not what you believe, there’s 62 podcasts before this might help you get there.
Well, also there’s a potential looming recession that might help you get there.
Yes, exactly. Yeah. If you’re going to go down, you might as well test something to try to not go down, but-
There you go.
From your experience there, there’s obviously mindsets have to shift to get to that culture. What are the big ones that you see that are the beginning of the tipping point for you?
Well, we always coach our clients on incorporating a few questions. I would say key phrases, these kind of help them really just understand the benefits of experimentation and be open to it. And I think if you can start asking these three questions, then you’re likely to get success with a greater team and circulate this. So the first is, I don’t know, but let me find out. This is such a powerful statement because it helps you stay humble and defer to the data. It also brings a culture of research, which is the first step of experimentation. So I think if you’re a leader and you’re looking to make change and you have that statement to questions, I don’t know, but let me find out it helps people understand you’re not ego driven, that you can be data driven. Ego driven would be like, here’s the answer.
Well, are you sure about that? You need to do more research. You may think you just know, but I’m surprised we’ll run A/B tests. I get surprised daily on those results. As soon as I start making assumptions, I have big issues basically. So you really need to admit what you don’t know in order to run successful experiments. So that’s the first step, and then you can really implement your findings from there. So again, I don’t know, but let me find out. That’s a really, really powerful one.
The second is you can’t always win, but you can always learn. So actually at The Good we have a saying that there’s no losers, there’s only learners. And so what I mean by that is we’ll have a test and we’ll run a test. And if it does not hit the metrics we were looking for, or it has the opposite effect, or it just doesn’t work for some reason, we’re going to know something. We’re going to have learned something from that. So it’s not a losing test. It’s a learner, it’s a learning test for us.
We can then take what we learned and reapply that to the next test and continue to compound that learning, which is very, very powerful. So if you look for the value in that learning, you’ll really help to accept the failures that often come along with experimentation. And I think that’s important. We talked earlier about accepting failure. This is a good one. I think that a lot of leadership thinks, oh, we’re doing A/B testing. We’re going to uncover some gold nugget, magic bullet, whatever you want to call it, every single test. And that’s just not the case. You’re going to learn something valuable for sure that you can use in the future, but you may not have unlocked that billion dollar test that you were really hoping for.
Yeah, it’s kind of like that slight edge of testing. You’re going to constantly get small little incremental gains. You might get lucky and a lighting bolt can strike anytime. But at the end of the day, over time it’s just going to be small little wins.
Well, so two thoughts on that. First is it’s the power of compounding growth. So getting 1% better every day. Really, if you’re 1% is that you ran a test that didn’t have an expected outcome and you learned something from it, you got 1% smarter today. So that’s a way to look at it. The second thing is really that compounding growth is just so key that I really think that having the mindset, one of the things I should add to this list is just trying to get 1% better every day. I think that’s really, really key. It’s something that’s core to our core values at The Good, but the third statement really is don’t assume something is right, just because you think it is. And I put this one last because it’s kind of like, if you do the first two, you probably don’t need this third.
But if the first two kind of just went right by you, then you definitely need this third one. And so really you need to avoid assuming what customers think or want. And you really have to have that shift into making data-backed decisions. Now, this is where I often say it’s really hard to read the label from inside the jar. So brands are too close to their site. That’s what’s happening here. You as a brand often think you know better than what your consumers know. And there’s the old adage that Henry Ford said, “If I asked people what they wanted, they would’ve said faster horses.”
Well, there’s no proof he had ever said that, first of all, and second of all, which it’s hilarious, it’s been attributed to him for decades now, but the reality is I’m sure some business school professor said that once and next thing everyone thinks it’s true. But the reality is it’s not about having a faster horse. It’s just about understanding horses better. And if you’re able to do that, then you really will go further. So just don’t assume you think something’s right. Just let the data drive you a little bit and it will work out, I promise.
Yeah. Well, and that’s that constant experiment and innovating process. You eventually test something that’s not a horse. You’re like, “Well, what if we did something that didn’t require food and a stable. Hey, maybe we can get there.”
Well, a good example of this is flying, the Wright brothers. They tried hundreds of tests before they were even able to get off the ground and then to have a sustained flight, how many times did they have to test? You always hear about, they went out to Kittyhawk and they flew that day on the beach, blah, blah, blah. No, they were there for weeks before they got it up in the air. Yeah, it happened one day, but it wasn’t that one day, they just ran a test. It was the compounded learnings from all of the iterations and all the different trials to get it up in the air.
Well, maybe even something that has to be key to the culture too then is you have to have a belief that you can get somewhere or something is possible, that it can happen. If you believe that a better conversion rate on your site isn’t possible, then why are you going to experiment to get there? You have to believe you can be better.
100%. And otherwise you really shouldn’t be in the job to begin with because if your job is to drive revenue from e-commerce, let’s just talk about that. Then you really need to believe that in the product you’re selling and that consumers want this. And if those two beliefs are true, then you’re going to find a way to make it work. And that requires experimentation. I mean marketers, first of all, and I think, again, I think this is why it ends up usually being rooted in that e-commerce and or marketing role, because those two roles are most common with testing. They are willing to experiment.
They’re willing to take a little bit of a risk, no growth marketer has ever just sat on their hands and done what everyone else is doing. They’re always trying something new. And even with running ad campaigns, correct me if I’m wrong, but how many ad campaigns do you’re like, “Oh, I’m going to put $10 behind this and see what happens. And if it works, then I’ll put more money there.” It’s the nature of experimentation, what’s going to happen.
Yeah. I think it puts us in the right groups to be pushing for change culturally in this space. So you’ve mentioned the beginning that you’ve broken this down very simply into steps to help companies start taking these processes, to get a culture of experimentation throughout the org. So what’s the step that usually gets them going?
Well, the first thing is just being okay with failure, really being comfortable with the fact that not every test is going to win. And if you can tell people in the organization, “Hey, this failure is part of who we are. When you experiment, it’s going to happen.” And that’s okay. That does not make us losers. It makes us learners. And so we need to have that mindset. Think about it. You’re going to launch products that don’t work. You’re going to create new sections of your site, where the conversion rate is just horrible. That doesn’t need to be the end. Both of those things can be fixed. And I think that needs to be the way you’re thinking about it moving forward. And if you want your team to really be comfortable with the experimentation, they also need to be comfortable with failure because that’s going to happen.
So the first step is be okay with failure and move forward from there. Second step is to start with small bets. So don’t go out guns blazing. And the first thing you’re going to bet is on a completely new redesign. You’re just asking for problems. That’s a huge capital investment. Start small, show some wins. So I really would not experiment to the point where your company is going to succeed or fail based on a single experiment. We never do that at The Good, it’s not a risk that’s worth taking.
So really what we want to do is consistently take small bets that compound. So iterate on your learnings, continue to compound and get a sense of what works and what doesn’t work. That’s really what is going to help you there. And then you start implementing those small bets and gaining some wins. And then you can start populating those around and saying, “Hey, look at this, we’re celebrating that we did this.” And then you can double down on experimentation with those successes. So start small, get some wins and then start populating that. And I think what you’ll see at that point is people will get behind you.
You’re listening to Driving and Convert, the podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers, and Ryan Garrow of Logical Position, the digital marketing agency offering pay per click management, search engine optimization, and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple podcasts and sharing it with a friend or colleague. Thank you.
I’ve heard some pushback in that vein of failure where I think, I don’t know if Mark Zuckerberg came up with it, but he talked about going fast and breaking things. And that’s part of the model in a startup and where he was going is if we don’t get to somewhere fast, all the people invested in us aren’t going to be there, which I can kind of see and I’m aggressive. I tend to that thing. But yeah, I think that also within an established organization, that model versus this, you could break a lot of relationships if you’re going fast and breaking things without some controls and not taking the small bite size pieces on your org.
I wholeheartedly agree. And I think this is a reason why you would start small is you’re going to upset less people. But I think there is a realm of politics that needs to play into this. I think this whole episode and everything I’m talking about today really comes down to politics. It comes down to how to get people to be comfortable with this and the risks that come along with it, which are fairly minimal unless you go out and you’re just like, “Hey, we’re going to bet the farm on this one thing.” God speed if that’s the case, but it’s just one of those things. I think in terms of the next step here, it’s really just, don’t be afraid to A/B test everything. So really step three is just have a gut feeling and that’s okay.
But it’s another thing altogether to see all of the data work and as I mentioned earlier, that might prove your gut wrong and you need to be okay with that. So A/B test everything and understand that you can’t just rely on what you think will work. So take those small bets by A/B testing everything, and then let the data guide your decisions and you will win. Overall, you will see a higher win rate than you want. So highly recommend that.
Step four is to collaborate and put together good hypotheses. So work with your team, get them involved. By the time you get to step four, there should be people who are buying into the process on your team and maybe outside your team at this point. You’ve circulated some wins. You’re telling people, “Hey, this is working to some degree. Here’s a win.” Even if you only unlocked 10,000 extra dollars, that’s free money that you found for the company by running a simple test. Populate that, right?
And the wins will start to grow from there. But really when you start thinking about this, if you start A/B testing things, you have start circulating the wins. You’re making data-backed decisions. Now you can bring more people in, so help your team by bringing them in to generate ideas around what could be tested. If you do this on a regular basis, have some brainstorming sessions. They will start thinking in this mindset because they’re going to get excited to participate in these wins. And what you’re also doing is now you’re getting ideas that people used to just go and implement and you’re instead turning that into let’s test it. And so it ends up being a much more collaborative approach. And then if you find that people’s hypotheses are true, you’ve found part of your answer. And if it’s false, now you can keep going with another test, because you’ve learned, so people will start to get into that.
I think step five, the next step is really just appreciating that effort that comes involved with that. Initially people are going to feel really uncomfortable experimenting, especially if it’s not part of the culture, but understand that they’re going to fail the first few times, maybe not the first few times, but they’re going to have some failures along the way, and they’re going to be tempted to just say this doesn’t work and they’re going to throw in the towel because maybe it costs the company 10 grand, but that’s okay because it’s all up and to the right. It’s that compounding effort in the learnings. So in order to combat that, really it’s essential that you continue to highlight and publicly appreciate these efforts in the tests and the results. Even if they’re failure, highlight what the learnings were. And I think that that’s a huge shift in mentality.
I think that’s where you can bring a lot of the political piece in too, that collaboration and preaching the effort in front of other teams, making sure that the important people that you know that really control culture at your organization, making these are the steps where you’d probably want to bring that group of people or individual in to say, look at all these cool things that are happening and what experimentation as a culture in our group is doing.
That’s exactly it. And the more that you can do that, the more buy-in you’re going to get overall. So it really is helpful. And then the last step here is really just to maintain that innovation mindset. This is where people really break down. Those who have seen, have a lot of success of running a testing program, and then where they end up breaking down, it’s usually here, where they’ve gotten through everything else, now they’re a little bit tired because they’ve dragged everybody else along. They’re starting to see some wins, but really the biggest hindrance to creating a culture of experimentation is just the institutionalization of it. What do I mean by that? Well, you eventually end up doing it because that’s always the way we’ve done it and this leads to stagnation. So now you end up saying, “Well hey, I know you really want to test this area, but this is something we’ve always done. Why do we need to test it? It’s working for us.”
And then things start to break down because you’ve taken the easy test off the plate. Now you’re getting into people’s political areas. You’re saying, “Oh, well I know that you’re a buyer for our kids’ clothing line, but I need to go in, I want to test some things around this that might alter what you have to buy in the future.” And then people say, “Well, we’ve always bought this mix. Why or should we change that?” Well, I think it’s important that you always, as an institution, are making room for new and even radical ideas. And that’s really what can lead to the biggest successes. So yes, make a bunch of small tests, but don’t forget to occasionally swing for the fences. And if you’re not doing that, and you’re not unfortunately upsetting some people along the way or having to have some tough conversations, perhaps, then you’re probably not testing with enough rigor that you’re going to see some big results. So that’s really important.
So the key is institutionalization of the testing, not the institutionalization of one of our answers. Once you get an answer, you’re like, “Oh, this worked, we’re just going to do it this way all the time.” Do it that way until you find a better way.
Yeah, 100%. Just because you have a winner does not mean you stop. It means you take that learnings and you say, “Okay, this one over here, what else can we do with this? Or how can we continue to improve it some more?” And you take that winner and that becomes your new control. It becomes your new normal that you’re testing against. And that’s really where you start to see some compounding growth.
I like it. Okay. One of the ways that really sinks into me and I ask all of our partners when we’re having these conversations around, just what do they do and why does it make sense for our clients is the example of somebody that’s actually done this or you’ve seen it actually happen. So what’s an example you can give us that this is where change became culturalized within the organization for the experimentation.
Yeah. Great question. So you’re familiar with the Telegraph out of the UK. I know it’s not as popular in the states, but it’s a major newspaper in the UK. We worked with them for quite some time, but they’ve been delivering the news in the UK for 160 plus years. They were the first British newspaper to have an online site. And when we started working with them, they knew they needed to grow their subscriber base, and they had some growth targets they were trying to hit. They knew they were on maybe in the middle or the first steps of that culture of experimentation. And so they really wanted to require or knew what would work for them. So they called us and they said, “Hey, we need some help with this, in terms of making a mind shift internally, and how can we do that, how can you help us?”
So we did a lot of what we call rapid testing with them because when it came down to it, we determined that we really needed overhaul their sign up process. The conversion process from a reader who finds an article on Google, et cetera, or gets emailed from a friend, then they hit a paywall. We need to overhaul that paywall experience to be much more user friendly and convert better, because that’s where everybody was dropping off. So we decided if we’re going to attack a paywall, which has been in place for a long time at Telegraph and it had a lot of stakeholders and it’s how they made all their money online. There’s ads, et cetera, but the reality is everybody who subscribed has gone through that pay wall. So it is something that was almost a religion to them. It’s like, don’t mess with this.
And we say, “Well, this is where the problem lies though. We need to attack this area.” So we started by doing small tests, rapid tests. We didn’t even start A/B testing. We took offsite tests. What do we mean by that? Well, we would mock things up and then put it in front of people for five seconds, take it off the screen and ask them to tell us what they remember. Little things like that could really help us to build up a use case for us to go back to upper management and say, “Hey, these are the challenges and they exist. And I know you don’t want to touch this. It’s institutionalized, but we need to make this change.” So we did that and helped out with that entire subscriber journey and help them move the needle. But I think it’s really the outcome of this is to say that once the data’s in, it’s really hard for leaders of these institutions to argue with the results and to not let you make those changes, and really now the experimentation has become part of their DNA.
So now we help them. They’ve built up an entire testing organization and their team and they are off to the races because it’s now part of their culture. So obviously, Telegraph isn’t the only company that’s used experimentation. Amazon has had a lot of issues with this over the years and they are still one of the bright spots in terms of experimentation. There’s a lot of quotes out there from Jeff Bezos about how many tests they run every day, every month, every year and how the company will die, as soon as they stop testing and innovating. And you think you can look at that, they had their own phone with the Amazon fire phone that lasted for six months.
So terrible. I mean, you get why they did it. You want to own that, but they just …
Yeah. They’re experimenting with everything. We were laughing I think last time we recorded about Amazon pets, you can have them deliver pets and is this pet going to be alive when it shows up in my door? You’re like, I don’t know. But the reality is they’re trying a lot of things. They’re trying a lot of things and that’s great to see when you get that big of a corporation. Yeah. You’ve got to test throughout the organization, not just on their website, which by the way, they run thousands of tests a day on their website. So if you think that you’re running two, three tests and you’re putting a lot of risk out there, try being Amazon and running hundreds of thousands of tests every day and having a whole team behind that, that is doing nothing but changing your website every minute. And that’s really the bottom line. It’s wherever you find these innovative growing companies, you’re going to find companies that are willing to experiment.
That’s great. I love that, Jon. I love culture of change, but I think the older I get, the more nervous it makes me. And so I have to constantly check myself as I get in routines. I am a creature of habit that it’s change and experimentation can make me nervous. But again, I like moving forward and not being stagnant more than I dislike change. So I think it’s an important thing for us to constantly remember. And in the digital side, it’s where it’s easiest to start within our core organization.
I can think to my manufacturing company, it’s difficult to get people in production to be thinking about how do we make this differently or better or more efficient without a bunch of nudging. And so if your culture is built around production of a product and marketing’s a side piece of it, then it’s not going to be easy. But the other side of it is such a big upside and a culture that can be so much more fun and engaging to be into. So thank you for your insight, Jon, all those steps. You gave us a roadmap. It’s easy. Jon told us exactly how to do it.
Well, I’m happy to have done that. And if I can affect one company and have a great culture of experimentation and see some wins there than my job here is done today.
That’s good. I like it. Thanks Jon. Appreciate the time.
Yeah. Thank you, Ryan.
Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. Keep up to date with new episodes. You can subscribe at driveandconvert.com.
About the Author
Angel Earnshaw is the Marketing Coordinator at The Good. She has experience in improving brand awareness through digital marketing and social media management.