Step 3: Test, test, test

1. What is the customer acquisition cost (CAC) in that channel? (Should be no more than ⅓ of your customer lifetime value [LTV])
2. How many customers could the channel realistically yield and would this number get you to your growth goal?
3. Is your target customer on this channel?
4. What is the time needed to execute the tactic? (It’s important to “time stamp” for measurability.)
5. Which team member will be in charge of this growth tactic?

Now that you’ve got your top three marketing channels that you think can help you reach your growth goal, it is time to test them out.

Let’s revisit the five key questions you used in Step 2 to help you identify an effective channel tactic. Keep these in mind as you build out and implement short, lean mini-campaigns to test your three channels.

The five questions were:

1. What is the customer acquisition cost in that channel? (It should be no more than ⅓ of your customer lifetime value.)
2. How many customers could the channel realistically yield and would this number get you to the growth goal?
3. Is your target customer on this channel?
4. What is the time needed to execute the tactic? (It’s important to “time stamp” for measurability.)
5. Which team member will be in charge of the growth tactic?

You want to build tests that will give you this information. This data you collect from these mini-campaigns will help you evaluate the usefulness of the channel to you. You should collect and track as much information as you can—be it the number of clicks on a page, the number of people who read your blog, or the number of new subscribers you have for your newsletter. The point is to quantify your efforts as much as possible so that in the next step of this framework you can compare your test results and make marketing decisions based on data rather than a best guess.

The types of data you collect will depend on the nature of your strategy and product, but at a minimum, you should track:

1. How many customers the channel offers
2. The conversion rate
3. The cost of acquiring each customer
4. The lifetime value of the customer
5. The amount of time it took to acquire these customers

There are different types of software that can help you track this data, but a spreadsheet will work just as well. We provide a template of a spreadsheet in this playbook.

Now, how do you actually design a test? Well, that is the creative part! It will depend on your product or service. Make sure you keep your channels, growth goals and your target customer top of mind.

Here are some tips to get you started designing your tests:

• Pore over customer discovery data & look for patterns in the language your customers use
• Look for ways to reach groups of customers with similar buying behaviours
• Think of your value proposition & how it could best resonate with customers

Research what others in your industry have done, but only to inform your perspective, not provide a template for your own marketing. What has worked for others may not necessarily work for you. You want to run your own campaign that fits your unique product and your target market—and you want to stand out. Remember, you are looking to leverage an underutilized strategy, not replicate what has worked for someone else.

Run each of your three tests at the same time, with varying times depending on the channel. Doing them at the same time rather than one by one saves you time. At this point, you are just testing your strategy on your market to look for signs of life. It is not a full-fledged campaign at this point. The budget you allocate for this is up to you, but a good rule of thumb is to spend no more than $1,000 per test, and to spend roughly the same amount on each test so you can compare the results.

The reason to keep the testing process lean is that you don’t know yet what your best marketing channel will be. There is no point in wasting time or money on a weaker channel, so it’s too soon to go full out.

To recap:

1. For each of your 3 channels, design a short, cheap test (<1 month, <$1,000). You need to be able to identify:
   • The customer acquisition cost (CAC)
   • The number of customers the channel could yield
   • Whether you are reaching target customers
   • The time needed to execute the tactic
   • Who the team member is in charge of this tactic
2. Run these 3 tests concurrently.
3. Collect as much test data as possible so you can quantify your marketing efforts & results. Minimum data should include:
   • Number of customers the channel offers
   • Conversion rate
   • CAC
   • Customer lifetime value (LTV)
   • The amount of time it took to acquire these customers