Cost of Delay: How to win approval for your test and test schedule

Experienced online marketers have heard this saying at one point or another: we just don’t have the resources to do what you’re asking. Maybe the resources aren’t there or maybe your project is last in line. Either way, somebody else is determining the destiny of your plans and your message just isn’t being heard.

So, many marketers scramble for decision makers’ attention. They’ll set up big meetings, put together big PowerPoints, big Gantt charts, and stay up all night practicing the perfect pitch – all to get a simple, disheartening response. There is a more effective way to get approval.

SignThe cost of delay

You sell your decisions makers more effectively by presenting them with a simple, relevant metric: the potential cost of delay.

Decision makers need information they can understand, and the language of money (money lost to be more specific) can be one of your most powerful tools. If your company’s website is bleeding and you are tasked to fix it, there is no better way to start the conversation than by showing how much blood is being lost on a monthly, weekly, or in some cases daily basis.

Remember, this is the same blood that helps pay for all those other priorities sitting in front of yours.

The solution is at your fingertips

If you are testing on behalf of your company, you will likely have all the information you need to get started.

  1. Start with your web analytics. Every test should have an objective, and knowing the objective from a web analytics perspective is your first step. This could be a sale, a lead, or sign-up on the page or process want to test.
  1. Understand its financial impact: Look at each test’s success metric and ask yourself:
    1. How much is that lead worth (over time)?
    2. What is the likelihood that the completed step will become a lead, and then revenue for your company?
    3. What is the average order value of a person completing their order on this page/process?
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All of these questions begin to connect your web analytics with your transactional/financial data. Healthy companies keep tabs on what each of their processes is worth, and make business decisions based on these business-level metrics. If you do not have a basic understanding of the financial impact (for better or worse) of what you are testing, you are walking a dangerous path.

  1. Connect the dots: For example, you know that step two of your order process is seeing a 70% drop in visits and that the average customer order size is $150. If you were to recover, say, 10% of those visits that are typically lost thanks to the intelligence you gain through testing, how much revenue would those tests drive?
  1. Ask the big question: Are we (as a company) willing to risk losing this much money by not getting this test up in time for this season’s peak?

You cannot possibly know all the competing priorities on your decision maker’s list, so you can’t actually do the full analysis for them. Taking this approach, however, gives them the information they need and the attention your test deserves to complete the analysis – comparing the potential loss to the cost of pushing those other priorities back (or acquiring the resources).

Empower yourself and your test schedule by clearly communicating the problem to your decision makers to show how your testing may solve these business-level problems over a set period of time.

Related resources

A/B Split Testing

Welcome Message Sequence Tested

Site Compatibility Tested, Section 1 (Research)

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Site Compatibility Tested, Section 2 (Analysis)

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10 Comments

  1. Andrea says

    Hello – this argument makes sense from an e-commerce perspective. We are in the business of lead generation, however we aren’t paid on a lead basis – so an increase in leads doesn’t necessarily translate into revenue. It is a good thing to send more leads of course but hard to connect the financial impact. Do you have any recommendations for those of us who are trying to get a testing program off the ground but are lead gen and not e-commerce? Thanks!

    1. Jon Powell says

      Hi Andrea,

      Thank you for your question. Brian Carroll addresses this point well in his book Lead Generation for the Complex Sale. In short, if you cannot measure your lead by revenue generated then at least measure the lead by cost and answer the question “How much am I putting in to this?”

      If you have a team working to accomplish a given goal (lead generation in this case), someone is paying your team to get that job done. Other resources are involved too – such as development. Then there might also be source costs (paid search, banner advertising, etc). Use as much of this data as you can to do a best estimate on what your cost per lead is (ex: total cost in a given period divided by total leads generated). If your test plan can increase the number of leads without significantly increasing cost, then cost per lead drops.

      Why continue to pay more money per lead when your test plan can get your company a better deal?

      Does this help?

  2. Andrea says

    Thanks Jon, this does help. Gives me a starting point at least. Thanks!

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