Jump to content

Test and learn

Add links
From Wikipedia, the free encyclopedia
This is an old revision of this page, as edited by Jxmal (talk | contribs) at 17:41, 9 June 2024 (Clarified the Definition: Added a clearer introduction to what "Test and Learn" practices are and their purpose. Enhanced Readability: Improved the flow of sentences and provided a more concise explanation where needed. Consistent Terminology: Ensured consistent use of terms like "Test and Learn" and standardized formatting for company names and terms. Added Detail: Included specific actions companies take when using Test and Learn, making it easier to understand the practical application. Secti). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.
    • Test and Learn** is a set of practices followed by retailers, banks, and other consumer-focused companies to test ideas in a small number of locations or with a limited group of customers to predict their impact. The process is often designed to answer three key questions before a full rollout:

1. What impact will the program have on key performance indicators if executed across the network or customer base? 2. Will the program have a larger impact on some stores/customers than others? 3. Which components of the idea are actually working?

    1. Historical Context

Test and Learn has been systematically applied since 1988 by Capital One. The company has been aggressive about testing since its founding, experimenting with everything from product design to marketing, customer selection, and collection policies. Capital One conducts tens of thousands of tests annually, allowing it to offer thousands of different types of credit cards based on the knowledge gained. Richard Fairbank, CEO of Capital One, called Test and Learn "a marketing revolution that can be applied to many businesses."

    1. Examples
  • Retail banks running different commercials in different markets.
  • Fast food restaurants launching a new menu item or product for a limited time in select locations.
  • Big-box retailers evaluating “store of the future” programs.
  • Companies evaluating pricing strategies.
  • Retailers testing merchandising layouts across their door base.
  • The UK government, through research projects such as the College for Teaching and Learning's Close the Gap: Test and Learn.
  • Amazon frequently employs the Test and Learn methodology to determine the effectiveness of different homepage layouts, product recommendation algorithms, and pricing strategies.
  • Netflix often employs the Test and Learn methodology for its algorithms, user interface, and even content creation.
    1. Test and Learn in Practice
  • Woolworths uses a Test and Learn approach to identify which stores should undergo renovations.
  • Wawa Food Markets, a Mid-Atlantic convenience store chain, uses Test and Learn across several aspects of its business:
 * Measuring the effect of introducing a new product.
 * Determining the impact of adding additional staff.
 * Understanding how opening a new location would impact existing nearby locations.
  • Subway ran a promotion that lowered the price of its foot-long sandwiches to $5. Before deciding to launch the promotion nationally, Subway ran a test comparing locations offering the $5 foot-long sandwiches to a control group of similar restaurants not offering the promotion.
  • Kraft Foods, a manufacturer and distributor of packaged foods, uses testing to optimize the placement of its products on grocery store shelves:
 * Determining the effect of a coffee aisle re-design on sales of premium coffees.
 * Measuring the impact on product sales of a change to in-store sales representatives' responsibilities.
  • Pier 1 Imports, a retail chain specializing in home decor and furnishings, uses testing to measure the effectiveness of search advertising campaigns.
  • Test and Learn is also methodically used online to test the impact of various web page layouts on user behavior. Tools such as Google's Website Analyzer provide every site with the ability to test various elements and their effect on user engagement.
    1. Test and Learn Software

Various software tools support systematic testing within organizations. However, there is no single software package that covers all types of tests, and significant knowledge of statistics is often required for effective analysis. Many companies, including Capital One and eBay, have developed internal experiment management software. Alternatives to internal solutions include broad statistical analysis software tools such as SAS or test and learn-focused software from Applied Predictive Technologies, Trial Run, and MarketDial. There are also more narrowly tailored products focused on specific problems or fields, such as web analytics, with firms like Omniture, WebTrends, and Google offering specialized software.

    1. Criticism

Conducting Test and Learn requires mobilizing, tracking, and analyzing site and customer data at very granular levels, which can be a massive and expensive undertaking. However, the exponential increase in computing power and the corresponding decrease in its cost have made testing more accessible. The February 2009 Harvard Business Review article "How to Design Smart Business Experiments" by Thomas Davenport discusses the Test and Learn process and describes how several companies have overcome these and other barriers to testing.

    1. See Also
  • Clinical trials
  • Scientific method
  • Design of experiments
  • Evidence-based management
  • Evidence-based practices
  • Business process reengineering
  • A/B testing
    1. References
Retrieved from "https://en.wikipedia.org/w/index.php?title=Test_and_learn&oldid=1228141577"