We had two great lectures that were led by Prof. Wind, who is a Lauder Professor Emeritus and Professor of Marketing at The Wharton School of the University of Pennsylvania. In the second  lecture, he was joined by Nick Primola, who is the Executive Vice President and Head of Industry Leadership and CMO Practice at the Association of National Advertisers, Dona Vieira, who is the Executive Vice President and Chief Commercial Officer at Sallie Mae, and Robert Tas, who is the Chief Growth Officer at 1800-Flowers.com INC. Prof. Wind mentioned digital transformation as a key point. There are many businesses that still, even after many years of existing digital technologies and the Internet, are not digitalized. The coronavirus crisis showed that these companies will not survive the new era. According to a survey conducted by Dun & Bradstreet, the number of failed businesses in 2020 increased by 70% over the number in 2019. The survey also shows that 55,000 to 60,000 businesses in Israel will close in 2021. The restaurant, hospitality, and transportation industries were among the worst hit, along with fashion stores. Bearing all this in mind, I would recommend an experiment in the fashion retail business.

We should choose two group of fashion stores with similar revenues. Let’s also assume they would be in the same field, for example, women’s clothes. The control group will continue to work without any changes, while the test group experiments with digital marketing and technologies. The experiment should take eight or more months, with results measured every month.

We expect shops that applied digitalization of the business and marketing to see an increase in revenues in the long term.

Let’s use the case study of the experiment that was done in OKMyOutfit. This company, established in 2014, connects fashion stylists with consumers who need style advice. At the time of launch, Diana Malencio, the founder of the company, was trying to find out how to price the company’s service. She was looking for a better pricing model. She had in mind two pricing models. The model with a flat fee of $89 was too high for her audience. She had a haunch that a subscription model, at a $3.99 monthly price, would suit them better.

Melencio and her co-founder performed an A/B test. They ran a Facebook advertising campaign with a small budget of a couple of hundred dollars. For her A/B test, she evenly divided a pool of potential customers between two versions of the landing page.

What they found in the experiment was that only those in the $3.99 group were sufficiently willing to try the unknown service, because it was a fairly nominal amount.

Melencio was prompted to carry out several other pricing tests when she learned that her audience might prefer a subscription pricing model. What she finally discovered was that OkMyOutfit needed to focus on communicating the value of the service. Melencio said that it was an issue of showing people the value of the virtual fashion service.

When you test one hypothesis, you collect data that indicate other areas of your marketing that need attention. The results of the experiment might be surprising.

We can conclude that, even with a limited budget, it is possible to build a marketing campaign experiment. The experiment should focus on a specific question, in order to find a solution that fits the company. Experiments can be used as problem-solving tools and as mechanisms to listen to customers.

Photo by Hakan Nural