I am sitting here on a Friday at 4.23PM in…
The trend of globalization is rapidly growing. More and more businesses from every sector are willing to try new business strategies in an effort to reach diverse global markets. There are many examples of thriving global businesses. Dunkin’ Donuts decided that its Chinese locations not only sell traditional glazed donuts, but also sell unique, dry pork and seaweed donuts appealing to the tastes of their customers in China. McDonalds has added exclusive menu items based on location, such as the “McArabia Chicken” in the Middle East, and macarons in France. Food chains are not the only ones embracing this trend. Nike established their online NikeID customization platform which enables customers from around the world to design their own shoe based on taste and cultural affiliation. The clothing company, H&M, is focusing their efforts on making their online shopping experience globally versatile, so that customers from all over the world can easily navigate their online store.
Peoples’ tastes vary from region to region, and we see businesses are evolving their physical presence to meet these tastes. Yet, as the digital realm is becoming increasingly important for business, businesses are also evolving their digital presence to reflect peoples’ digital tastes. In last week’s post, “When Clutter is Effective: Cultural Differences in E-Commerce”, we wrote about how digital spaces in the global marketplace are different based on differing digital needs. We mentioned specifically how the typical American online shopper may be drawn to organized and simple web design, whereas a typical Chinese online shopper might find a website cluttered with information more credible. This leads to a question: if you were an America-based company trying to expand your online presence to say, China, how would you figure out what the digital preferences of Chinese people are?” Of course, you could look at the design of other heavily trafficked Chinese websites and replicate their web design, but that wouldn’t really provide you with quantifiable insight. What could possibly provide you with both quantifiable and behavioral insight is something called A/B testing.
A/B testing is a data-driven tool used to determine which version of a web page is most effective in bringing site traffic, and ultimately more opportunities for conversions and revenue. Rather than guessing which digital marketing strategy is more effective, A/B testing is a quantitative method for identifying which modifications will truly optimize an online user experience. A/B testing is commonly used when businesses are considering making changes to their website. The changes can be as small as a different placement of a button, or as large as a complete redesign of their home page. Once the changes are made, half of the business’ website traffic is exposed to the website without the modifications, and the other half is exposed to the website with modifications. Traffic behavior, such as bounce rate, conversion, etc. is analyzed on both versions of the website through a statistical software like Google Analytics or an A/B testing software, and the business can use the results to determine whether or not the website modification had a positive, negative, or neutral effect on site traffic. A surprising yet successful example of employment of A/B testing was performed by Obama’s 2008 Campaign Committee. The Obama Campaign Committee A/B tested two versions of Obama’s campaign website in order to see which version would drive more campaign donations. In version A, the homepage displayed an image of Obama with a “Sign Up” button, and version B displayed an image of the whole Obama family with a “Learn More” button. The modifications were small, but the differences in conversion were massive. Results showed that version B brought a 40% increase in sign-up rates which led to 2.8 million more email addresses collected and an additional $60 million in campaign revenue according to Unbounce.
The A/B test on Obama’s campaign website revealed a lot about American preferences. It revealed the value that Americans place on having a president who is a family man. It also revealed the preference towards the less committal button, “Learn More”, over the binding “Sign Up” button. Because Obama’s campaign team took the time to utilize A/B testing, they were able to figure out what kind of website truly appealed to Americans, and made a profit in return. Similarly, businesses can use A/B testing to determine whether or not their digital spaces are effectively appealing to the preferences of customers around the world. If A/B testing could result in increased revenue for Obama’s campaign by $60 million, one can’t help but wonder how much impact A/B testing could have on the revenue of global online businesses.
Learn More: Listen to the Planet Monday podcast on A/B testing here.