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How Just One A/B Test Brought In $400k in 6 Months
Plus: What Market Are You In, AI-Generated Art Is Not Copyrightable, "Going Shopping" is Dead, and more
Paul Campillo
August 23rd, 2023
Hi! I hope you’re having a great August so far.
Here’s what’s going on this week:
Editorial: What market are you in?
The Latest: AI-Generated Art Ruled Not Copyrightable
BX: Brand & Performance Must Co-Exist
MX: How One A/B Test Brought In $400k in 6 Months
UX: Upgrade Your Collection Pages
CX: How to be AMAZING at CX
EX: The EX —> CX Connection
DX: Who’s only looking busy at work?
Let’s jump in.
What market are you in?
I read an interesting article about Amazon’s battle with the FTC over which market it’s in. Is it eCommerce or a marketplace?
This should be interesting…
Well, the answer is, it’s neither.
As the article correctly identifies, those are channels, not any of the actual markets Amazon is in. Take a look at some of Amazon’s markets:
Retail: This is the most obvious one. Amazon provides a platform for consumers to purchase a vast array of products, from books to electronics to clothing and beyond.
Digital Streaming: With Amazon Prime Video, it's in the entertainment or streaming market, competing with the likes of Netflix and Hulu.
Cloud Computing: Amazon Web Services (AWS) is a major player in the cloud computing market (and probably their biggest profit center), offering web services to businesses and developers.
Groceries: With the acquisition of Whole Foods and the launch of Amazon Fresh, it's also in the grocery market.
Consumer Electronics: With products like Kindle, Echo, and Fire TV Stick, Amazon is in the consumer electronics market.
Publishing: Amazon has its own self-publishing platform, Kindle Direct Publishing, serving authors and readers.
This isn’t even the full list. Remember how Amazon began? Selling books. You think there’s such a thing as a “book market”? Think again.
Markets Are Problems
I reminded of when Gary Bencivenga said, “Problems are markets.”
Without an urgent need or want in place, is there a market? No, not in 99.99% of the businesses that exist. And this is the point the author of the article was making.
When you think about your market—your real market—then understand that it must be problem-focused first, not just focused on your solution or product. Meaning, it’s customer-focused first, not just from the brand’s point of view.
Let’s go back to Amazon’s “book market”. When thinking through the lens of the customer, you start to understand why romance novels, as a market, outperforms the cookbook category.
Or why mysteries & thrillers outperform heady sci-fi & fantasy. Let’s take a look at the actual problem, or need each genre addresses
Romance: Satisfies the need for emotional exploration, escapism, and romantic fantasy.
Science Fiction & Fantasy: Addresses the desire for imaginative escapism, exploring alternative realities, and understanding human nature in diverse settings.
Mystery/Thriller: Fulfills the need for suspense, excitement, and intellectual challenge.
Self-Help: Addresses the problem of personal challenges and the desire for self-improvement.
Biographies: Satisfies the curiosity about real people and the lessons they offer.
History: Meets the need to understand the past and its implications on the present and future.
Understanding Your Market
Here’s an example. Let’s say you offer non-alcoholic beverages.
Problem: Many individuals enjoy the taste and ritual of consuming drinks or spirits but cannot (or choose not to) drink alcohol due to health reasons, personal choices, or other reasons.
Solution: Sophisticated non-alcoholic drinks & spirits that don’t compromise on the taste and experience of traditional spirits.
Market: The alternative beverage market for those seeking the taste and experience of traditional spirits without the alcohol.
Question: Who’s looking to replace traditional spirits and drinks without compromising on the more sophisticated social experience, and don’t want to settle for an O’douls?
So what market are you in?
This might come across as a gross oversimplification. I get that. There’s much more detail we could get into, but again, these are just reminders to:
Understand your market
Understand your market category (and where you can really differentiate yourself)
Understand what problems you’re actually solving on a functional, emotional, and even social level within that market
But if someone asks, “Hey. What market are you in?” — you should have a clear and precise answer, right?
The Latest
Judge Rules Against AI Copyrightable Art
Who owns the rights in this scenario?
Yes, U.S. District Judge Beryl Howell said no to AI, and yes to humanity. This should make the Writer’s Guild happy-ish. Copyright law was meant for human creators, not AI or remixers.
But, of course, the story won’t end there. I think where the law could get a bit fuzzy is when it comes to works of writing, which, of course, the Writers Guild is currently trying to protect.
So if your writing gets an AI assist, say with proofing or editing, but those ideas and concepts are still yours, is that copyrightable? Are tools like Grammarly ok, but others like Jasper not ok?
Human authorship is a bedrock requirement.
Read the full story here.
“Going Shopping” is Dead
Remember when “retail therapy” was a thing? Now most retail experiences end up sending people to therapy themselves—particularly the retail staff.
I suppose if I didn’t have a face, I’d be frustrated too
It’s true that most shopping happens in physical stores, but is the in-store physical experience still worth the trouble? According to reporting by Vox, for most consumers, the answer is, “Not so much.”
Why? Here’s a short list:
Shopping empty shelves is no fun — stock shortages is an experience killer
Merch is locked up behind plastic cases, particularly in drug stores
Stores are short-staffed (I remember waiting in a line—in the aisle itself—for staff to unlock the plastic case so I could get my allergy medicine)
Yes, organized retail crime is a thing, even in more affluent communities
Inflation means getting the most out of every buck
The shopping experience in most places is generally “meh”
Could investing more in making stores safer, along with better pay and work conditions turn things around?
I think it’s safe to say that NOT doing those things will force your average buyer to seek alternatives—exactly what big box retail stores don’t want.
Brand Experience
Performance or Brand Marketing
Two experts on this topic, Les Binet and Peter Field, wanted to figure out what makes effective advertising tick. Of course, rationality, wrapped in some emotion would do the trick, right?
And what did they find? In their own words:
“So when we examined the data, what we expected to find was that the killer combination was emotional and rational together. But when we looked at [it], what we found that the more you moved away from rational messages to pure emotion, the more effective advertising was.”
A great example of emotional ads that drive brand is Nike:
I don’t think of Adidas when it comes to emotional, or even memorable ads, and it showed in their ad budget. Adidas’s advertising split was 23% into brand and 77% into performance.
“The reason for that short-termism is because we are trying to grow sales very quickly,” said their Global Media Director, Simon Peel.
Yet it was brand activity driving 65% of sales across wholesale, retail and eCommerce according to Peel.
He added, “We had a problem that we were focusing on the wrong metrics, the short-term, because we have fiduciary responsibility to shareholders.”
Peter Field addresses the difficulty of building brand, despite the necessity of it:
“Lots of companies have had their fingers burnt by trying to brand build online… It is perfectly possible to build a brand online, it just turns out to be much more difficult than anyone imagined.”
You can listen to the podcast here.
Marketing Experience
How One A/B Test Brought In $400k in 6 Months
Did you forget to tell your story? Well Mountain House did, and they tested placing their value proposition on their home page. Did it work?
From Blue Stout:
By explaining to customers the key selling propositions, conversions from homepage traffic increased by almost 18% resulting in an increase of almost $400k over the following 6 months.
User Experience
Upgrade Your Collection Pages
This is from Oddit, a brand-first CRO agency. They’re really great at fixing eCommerce sites in general.
I spoke to their cofounder Taylor Davies about their methods, and most of it comes down to what feels right. And when you add in a ton of experience, and the ability to recognize the obvious to the mix, good results happen.
What changes did you notice?
Anyway, they recently published part 2 of their Collections Guide, where they break down five different brands’ collections pages.
Enjoy:
Customer Experience
How to be AMAZING at CX
Shep Hyken, well-renowned for his expertise in CX, shares some insights from his talk at Five9’s event in Vegas. His team also surveyed 1000 US consumers.
Some quick highlights from the survey:
76% will go out of their way to do business with a company that provides better customer service.
86% are willing to switch brands because another company will provide a better customer service experience.
48% say customer service is more important than price. Consider this: The price becomes more important when the value of the experience is missing.
65% say convenience is more important than friendly customer service.
41% would be willing to pay more if they knew they would never have to wait on hold for customer support.
There’s some good nuggets in here.
Employee Experience
The EX — CX Connection
I took this quote from the previous article. I know we talk about this a lot, but the lack of action when it comes to investing in EX continues to show up in ugly ways.
Data Experience
Who’s only looking busy at work?
Firmly in the EX category, how people spend their days working reflects on a number of factors. If people are quiet quitting, or not feeling very “engaged” then how much does that lead to “performative work”?
From Statista:
Final thoughts
Under Armour’s AI-Generated Ad
Honestly, this speech didn’t hit me (it was written by AI), but maybe that was the delivery or lack of music, or a combination of things. Or maybe motivational speeches have become a bit too cliché for me.
Either way, it’s a sign of things to come…
Thanks for hanging out. Enjoy your weekend.
Paul
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