Test-and-learn organizations are a prerequisite for true, data-driven marketing. Without proper support, practitioners will struggle to raise the bar of data-driven decision making. In today’s post, Kenshoo’s Tom Affinito details the DNA of a test-and-learn organization—specifically the four pillars required to execute this transformational approach.
In previous posts on marketing experiments, marginal gains, and data-driven marketing, I painted a future driven by a rigorous and methodical approach to data in which marketers constantly course-correct their activities with data insights.
But which areas can we focus on to improve our own team’s test-and-learn capabilities?
The four pillars of a test-and-learn organization
Practitioners looking to advance data-driven thinking on their own can feel like castaways stranded on a desert island, finding limited opportunities to escape to the promised land because of the daunting challenges of day-to-day survival. Marketers are always expected to do more with less budget and resources, and the constant grind of campaign planning, management, and reporting can limit the opportunities to effect positive changes in process, practice, and method.
The paradigm shift to true data-driven marketing must take place at the organizational level with marketing leadership driving this fundamental change.
Although every marketing organization will tread their own path through this transformative change, test-and-learn maturity can be broken down into four foundational aspects.
First, there are two core functional aspects that underlie any test-and-learn capability: unsurprisingly, these are the ability to test and the capacity to learn!
1. An organization’s testing process must include policies for deciding what kinds of tests are appropriate for resolving different types of questions, along with additional policies to support test prioritization, execution, and management.
2. An organization’s learning process is focused on actionability and decision-making, effectively promoting the results of tests through concrete actions that align business objectives, business growth, operational efficiency, and marketing knowledge.
Secondly, there are two supporting aspects that are equally important to support and maintain this data-driven mindset:
3. A test-and-learn culture that aligns the team, enforces accountability, invests in process & tools, and drives the desire to maintain a rigorous data-driven standard.
4. A clear vision for the types of strategic & operational objectives to be tackled and how to mitigate cross-functional conflicts.
The benefits of a test-and-learn organization
By focusing on these four pillars, a marketing organization will support and accelerate the efforts of all of its team members:
Aligning expectations: A test-and-learn organization sets the tone for how the team approaches their roles, how data is gathered and evaluated, and which market and audience insights are prioritized. While a truly data-driven approach shouldn’t double the workweek, certain tasks will take more time initially. Fortunately, with the entire team focused on clear goals, individuals can rally together and help each other adjust to meet new demands.
Accountability: It’s hard to hold just a part of the team accountable for raising the bar on data-driven decisions, but once the new expectations have been set and the team is aligned to the new mission, true accountability and improvement can begin. Although there will be some bumps early on, team members should be held accountable for the objectives that have been set. Eventually, The New Way simply becomes The Way and the team will settle into this approach.
Processes & structure: From the beginning, data processes will influence the creation of more effective team structures that should make execution and analysis easier and quicker to accomplish. What started off as “weird” will become accepted and streamlined. Over time, wrinkles will get ironed out, revealing more effective ways of utilizing a variety of skills and viewpoints across the team.
The right investment: Marketing leaders will have to pull out their pocketbooks to facilitate real change. A test-and-learn organization needs training, tools, and potentially new headcount. Even though being a world-class data-driven marketing team will pay off in the long run, in the short term it may mean some new expenses. Marketing leaders will need to justify these expenses by clearly and tirelessly championing how the new organization will positively impact the bottom line.
A shared language: As the test-and-learn organization matures, everyone on the team will see how course-correction through data-driven experiments and decision analysis provides gains that add up to significant market improvement. The strategic questions that remained mysteries early-on will finally get answered. And marketing team members will share a more concrete language for reasoning about product impact, audience preferences, and shifting media engagements.
The four pillars above provide a focus for marketing organizations to maximize the benefits of the test-and-learn mindset, and upcoming blog articles in this series with share our experiences working in each of these areas.
The customer journey is not all that matters.
It’s the marketer’s own journey to data-driven excellence that is key for discovering significant opportunities and for reaching higher levels of marketing growth.
Marketing experiments are at the heart of a test-and-learn approach
Nimble testing gets results quickly and with the least amount of disruption to the team and to the budget. Kenshoo’s Impact Navigator rapidly measures marketing impact, anytime, for any channel, across all of your audience segments.