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Run Tests to Avoid HiPPO Mistakes

Insights Over Intuition

"I never guess. It is a capital mistake to theorize before one has data. Insensibly, one begins to twist facts to suit theories, instead of theories to suit facts."

- Sir Arthur Conan Doyle, author of "Sherlock Holmes"

Modern business decisions must be based on data. As the Harvard Business Review once noted: “Big data, small data, internal, external, experimental, observational—everywhere we look, information is being captured, quantified, and used to make business decisions” (Frick). One study actually found companies “were, on average, 5% more productive and 6% more profitable than their competitors” when they made data-driven decisions (McAfee & Brynjolfsson).

Marketers who run optimization programs are always looking for the next big test that will provide actionable data and impact the bottom line. But while they may try to think of amazing new ideas from scratch to generate those click-throughs, sign-ups, and revenue, one path they should consider is testing ideas already put forth by the ‘highest-paid person.’ That’s right—test the HiPPO, or the highest-paid person’s opinion. Testing out business decisions before you implement them can be hugely financially valuable to your company.

Companies on average were 5% more productive and 6% more profitable than their competitors when they made data-driven decisions.

I know, I know—many people don’t feel comfortable pushing back on the highest-paid person. However, by testing an executive’s decision before implementing it, you get data that proves (or disproves) his or her idea is a worthwhile venture. These efforts allow marketers to show the value of their optimization efforts through validation and risk mitigation.

Remember: Though it can be hard to challenge an executive’s gut instinct, blindly investing resources often won't yield the best outcomes. And in the end, good, tangible results are what everyone (including the business) will benefit from.

Protect Against Negative Outcomes

"Between calculated risk and reckless decision-making lies the dividing line between profit and loss."

- Charles Duhigg, Pulitzer Prize-winning reporter at The New York Times

Over the years I’ve seen countless tests built solely to find the impact a change will have on a website or app after it’s been requested by an executive. When marketers come to Oracle Maxymiser to help them validate a HiPPO concept, we don’t necessarily expect to get results that will drive huge ROI. Instead, we often test to make sure the HiPPO won’t have a negative impact on a company. This way, we can quickly determine if a HiPPO idea is worth the investment of pursuing at all.

We test to make sure the HiPPO won't have a negative impact on a company, so we can quickly learn if the idea is worth pursuing at all.

Our past tests proved and disproved many different ideas. Would a retailer increase purchases if its products were displayed on models? Would adding video to product pages be worth the high-quality production costs? How would including the logos of partner companies in high-traffic places affect sign-ups? Run tests to learn the answers to (very valid) questions like these before you execute on the HiPPO. This ensures resources aren’t wasted and detrimental changes aren’t made to your digital offerings.

Look at your competitors. Do they make HiPPO-based decisions? If so, and you follow analytics, you’re in great shape: Most likely you’ll have the chance to swoop in and take some of their frustrated customers!

Again—I know it’s easy to not rock the boat and implement the HiPPO simply because someone has “said so.” But I speak from personal experience: Use a “test and learn” strategy to avoid changes that will negatively impact business. This will rapidly prove the value of your optimization program.

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