10 Reasons Why Test Marketing Helps Businesses Grow

Test marketing is a strategy companies use to check the viability of their new product or a marketing campaign before it is launched in the market on a large scale. It is used across the business world to find out what consumers want and need in their everyday lives. It is like an experiment on the field (the test market) covering actual stores and real-life shopping situations. This is conducted without the customers’ knowledge of their participation in an assessment exercise. 

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What’s the purpose of test marketing?

Test marketing is used to ascertain various product uses, the class or category of users, and the motives that prompt the users or buyers. This helps organizations gauge the nature of general competitive situations, the latest trend in demand, etc. This test is conducted to know consumer behavior in terms of:

  1. Trial: If the potential customer will try out the product at least once.
  2. Repeat: Whether the consumer will repurchase it after the trial.
  3. Adoption: Whether the customer positively receives the product and repurchases it.
  4. Frequency: How frequently will the customer purchase the product.

Here are ten ways how businesses benefit from test marketing

Let’s look at the benefits of test marketing in detail:

  1. Having a great product can serve as a marketing tool. It gives the product the chance to sell itself: Great products sell themselves. Over time, customers will rely on the product they are using and decide to stick to it. When that happens, the company will have converted a free trial into a paying customer who loves the product and will come back for even more.
  2. Competitive edge over similar competitor products: For some industries, providing a free product trial may not be considered the standard practice. Offering the product would shift expectations within the targeted demographics, giving companies a chance to expose their product to interested consumers. Using a free, robust product will help create a want in the customers’ minds. But, it works in the other way too. If consumers in the industry expect a free product trial because that’s what everyone else is doing, then not offering one may hurt the company’s reputation. Much of this depends on how the company can showcase the features.  Learn more about Competitive Intelligence and how to do competitor research
  3. People can invest time into the brand: Money is valued more than time. But, from a marketing perspective, time with the test products and brand message is more valuable than cash inflow. People naturally build a relationship with the brand when they use the products and invest time in the company. Relationships create loyalty. Loyalty makes customers keep coming back for more great products.
  4. Critical feedback is received about the product: The idea of test marketing is that a product trial allows the brand to see how the product will react in natural consumer environments. Tests and simulations will only get you a limited amount of data. Consumers can be unpredictable, using the product in ways that brands may have never imagined. Having each trialist upload pictures, send reports, or share how they use their product can tap the brand into information resources that may allow them to refine or improve the product over time. This is one of the benefits of test marketing.
  5. Offer incentives: Product trials generate opportunities for the brand to better the deal if their customers are on the fence. Once customers try a product and think of purchasing it, offering a discount or an incentive may help gain the customer. Referral discounts are another way to help close a deal and find new prospects that might be interested in what the brand is offering.
  6. It gives consumers a sense of urgency: One of the benefits of test marketing is when prospective consumers are faced with a sense of urgency, they quickly evaluate the pros and cons of keeping the product. Urgency is important because it forces decisions. The end of a free trial creates a sense of urgency, while the perception of missing out on the product creates feelings of inadequacy. This combination will typically result in a sale if the consumer feels the value promises live up to reality. 
  7. It aligns customer interests with company values: Once a trial is offered on the product, it helps the company set expectations on its offerings. Brands can communicate clearly to prospective customers, letting them know what to expect from the product and how to use it properly. In doing so, brands can align the customer’s interests with the company’s values, which helps to reinforce further the relationships they’re trying to form with exposure to their products.
  8. Brands can see the seriousness of their customers: If a prospect has no interest in the product, then offering a trial to them will confirm that the lead has grown cold. Brands will always come across people who take a product trial without intending to buy the product. But many people try products when they have an interest in the results. This process allows brands to score leads better, create stronger follow-ups, and grow their inbound marketing opportunities. 
  9. Data provided is from actual customer spending: Replicating the sample selected for test marketing helps the brand understand the trends that may arise once the product is put up for sale. The buying patterns can help the brand tweak the price, size, packaging, etc. of the product. All these decisions to position the product rightly are made based on data captured from the actual customer spending. 
  10. Risk of a full-scale launch eliminated: Huge costs can be saved on branding, manufacturing, and marketing if the product doesn’t pass the test. The pitfalls found during the test launch can be rectified by the brand. Changes can be made based on the feedback and data collected from the test sample. If there is a defect or a problem in the product, immediate recalls can be done from the test. Recalling the product from the test audience is much better than launching a product to the whole market and then recalling it or understanding what is wrong with it. This also saves the brand’s reputation, along with saving money.

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The research based on the test market will give a fuller picture of the marketing campaign but it is important that you understand where to find this. For example, there are many websites that allow free access to abstracts of academic journals which may provide some information that can be helpful to you. It is important that this information is used correctly and is not clipped from the journal itself. It is up to the individual writer to identify how best to use the information that they uncover.

Today, consumers expect businesses to offer an exceptional customer experience. These high-quality interactions are among the essential components in driving revenue, engagement, and loyalty. The ability to truly listen to and understand your customers means being able to provide proactive, personalized service that speaks directly to the needs and wants of your most critical stakeholders. Credibility is what separates your business from the competition.

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