Startup Advice, Strategy

How a culture of experimentation can help your business grow

James Spittal /

digital experimentation

Web Marketing ROI chief executive officer James Spittal. Source: supplied.

A culture of experimentation is something that Jeff Bezos, founder and chief at Amazon, attributes as a key driver in Amazon’s success. In fact, Forrester predicts companies that are harnessing the power of experimentation are growing on average 30% more annually and are expected to earn $1.8 trillion by 2021. 

Digital experimentation is a practice commonly associated with enterprise-level businesses for a number of reasons: the cost of experimentation technology, the expertise needed to execute it successfully, and the need for a certain threshold of website traffic for it to be at all worthwhile. It is incredibly powerful, and once an organisation reaches a stage where experimentation (A/B testing) is viable, then it’s absolutely a necessary practice to grow market share.  

What’s attainable for any business, however, is implementing some of the cultural practices associated with experimentation, which, I believe, can spearhead a company’s growth like nothing else. A culture of experimentation is centred around asking the question ‘why?’ and being humble enough to listen to data rather than gut instinct to find the answer. This is about being customer-obsessed and empowering your customers to vote with their clicks.

It also means not relying on the opinion of the highest paid person (sometimes referred to as the ‘HiPPO’), and giving people within the company, who are closest to the data, the ability to make informed decisions based on the factual information that’s in front of them. 

For startups and founders at the beginning of their journey, adopting this approach can only be a good thing. It means that you’ll become more customer-centric, value the opinion of every employee you hire and encourage them to make their own decisions, dampen any ego or my-way-or-the-highway attitude that you may have, and become data-driven. 

Start early

Putting the building blocks in place for when you grow into a larger organisation, and setting yourself up for success when you do, is critical. Building a culture of experimentation is a sure-fire way of doing just that and accelerating growth in the process.   

A culture of experimentation starts with the founder and senior team and then stems through the entire organisation.

So, if you’re about to start a business, have recently done so, or are in your infancy, look at ways you can be more humble in your decision making. Also, integrate affordable tools that enable you to collect, interpret and action data, and value your employees and encourage them to make decisions quickly if the data in front of them is indicating that they should do so. 

For businesses which would prefer to remain a small entity, rather than grow into an enterprise — be it a boutique store, food truck, cafe or suchlike — adopting a culture of experimentation can help you stay afloat and keep up with customer demand. It’ll encourage you to ask your customers more questions and invest in affordable technology to understand their needs — whether that’s POS tech to understand your customers’ purchasing habits or customer survey technology. Most importantly, it’ll make you trust that data, act on it and experiment intelligently to get the desired results. 

Seize the opportunity

When a business gets to a stage where it’s big enough to not just implement the cultural ideologies associated with experimentation, but actually adopt it as a practice, there are a few prerequisites to consider. For digital experimentation (A/B testing) and optimisation technology to be worthwhile, one general rule of thumb is that the business must have at least 100,000 monthly unique website users. This is because you need a certain amount of data in order to get intelligent insights on the experiments that you run.

You also need to factor in costs of technologies and what’s appropriate for the stage your business is at. Google Optimize, the leading free platform on the market, is great for companies that need to run experiments but don’t have the allocated budget to do so. It also works well for companies happy to keep within the limit of five simultaneous experiments at any one time. However, businesses wanting to roll out more sophisticated campaigns at scale might want to look at paid platforms such as Optimizely and Optimize 360. These platforms allow for 100-plus simultaneous experiments to run at any one time.

One thing that remains constant is the need for a hybrid approach, which tends to be the most effective. This is the process of incorporating external support from a CRO agency alongside an internal team of experts to execute your experimentation programme. Research from Optimizely, one of the leading experimentation technologies, shows companies who run one to 20 experiments per month are increasing revenue by 1-4%, however, companies who run a minimum of 21 experiments are most likely to drive revenue increases of 14% or more. This shows the importance of having the necessary person-power to run the appropriate velocity of experiments to get impactful revenue results, and hiring an agency is often the best and most cost-effective way of doing so. 

Data and insights unlock opportunity and growth

Experimentation is one of the most powerful growth-oriented practices in business and the cultural ideologies associated with it, which are attainable to all businesses, can spearhead growth and help companies keep up with customer demand. I’ve seen it used in almost every vertical: insurance, retail, sports wagering, travel, media, OTAs — and to great effect at that. 

For those that grow from startup to enterprise, implementing digital experimentation in its literal form can be the difference between plateauing and gaining rapid market share. You could grow as much as 30% more than your competitors that have ignored it, according to Forrester. But before you start your experimentation journey, be sure to do your research and adopt the right technologies and strategies depending on where your business is at in its trajectory and the budget you have to put towards it. 

In the words of Jeff Bezos: “If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.” 

Be inquisitive, listen to customers and trust in data. The opportunities are endless. 

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James Spittal

James is chief executive officer at Melbourne-based CRO agency Web Marketing ROI.

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