Market testing is really important when you're trying to grow a perfume business

    In Creating Your Own Perfume With A 1700 Percent Markup! I mentioned I had done a test with a dummy product before making a $2,000 commitment to developing manufacturing our own fragrance, a men's cologne. Market testing is really important when you are trying to grow a business.

    Testing involves risking a small amount of money to get data -- data that will guide you through larger decisions. The testing mentioned in Creating Your Own Perfume With A 1700 Percent Markup! wasn't the first or the largest test I had ever done. Sometimes you don't even know you are testing but when you examine certain marketing results you realize that you have a chance to make a lot more money but it's going to involve spending more money ... and the thought of spending that money can make you uncomfortable.

    Sales results that you already have are the tool you need to make your analysis. But when the new opportunity -- or a larger opportunity -- involves doing something you've never done before, stepping off into the unknown, you have to be very clear headed about what your data really shows.

    For us, one case involved a small ad we had run in a national publication. The cost was under $1,000 and the results were profitable so the question arose, "what would happen if we ran that promotion as a full page in that publication?"

    The bait was simply that the cost per inch of space dropped dramatically as the size of the ad increased. On top of that, the publisher was offering us a deep discount on the posted ad rate.

    Calculating the sales per inch of our small ad and the number of inches we would get from the larger ad, and the cost of the small ad and the cost of the larger ad -- we decided to go with it, based on our proven results from the smaller ad.

    The commitment was scary. We would be spending ten times more money for the larger ad. Yet our data showed it to be a logical move -- and it was. The results per inch for the larger ad were several times what our results per inch had been for the smaller ad. And, not only did we receive a flood of cash orders, we received a flood of new customers, some of whom continued to buy from us for years.

    The test mentioned in Creating Your Own Perfume With A 1700 Percent Markup! was a bit different. It was suggested that our regular, loyal customers would buy a men's cologne from us. We had a print catalog that we mailed, monthly, to our customers. We bought a few dozen bottles of the same cologne a competitor was selling. It sold well but due to what we had to pay for it (too much!) and our matching our competitor's retail price (too low!), the profit was solid but not exciting.

    That all changed when we invested in our own fragrance. Our cost per bottle dropped from $7.95 to less than $1.50 while our selling price was bumped up from $14.95 to $26.95 which did not seem to deter buyers.
    To some, $2,000 might not seem like a lot of money but at the time, as our business was focused elsewhere and we had never sold a fragrance, $2,000 seemed to me like a huge leap into the unknown -- except for our test data that cried out to us, "there is profit to be made here!"

    Again, the data had the answer; we made our money.

    It's not always easy to develop a test that will give you good data. But that's no excuse for blowing off the idea of a market test and plunging into the unknown without any data to guide you.

    Test today and live to see your business grow!

    Here are three links to other articles I've written on testing:

Tips on test marketing your perfume

Test marketing your perfume

Testing — from the past