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Understanding the Value of the Taguchi Method of Testing

Oct 30, 2007
The most sophisticated level of testing is a multi-variate form of testing that utilizes the Taguchi Method.

Fifty years ago, Genichi Taguchi created a way to test multiple variables within the manufacturing process in order to optimize the production of automobiles. Not only did he reduce the number of expensive tests necessary, he also used it to estimate the value of each element.

His method worked so well in the factories that marketers are now using it to test their advertising and sales campaigns. Marketers have learned that while an A/B test might create a 5-10% improvement, a Taguchi test could provide a 15-45% improvement. In some cases, Taguchi tests have doubled or tripled conversion rates.

The value of Taguchi's fractional factorial testing is that you can get results without testing everything. It's also valuable in that the length of the test is no different from a regular A/B test and the number of visitors is about the same as well. And software such as the Split Test Accelerator makes it easy to set up and run.

For instance, say you want to test five elements, and each have two alternatives (control and the new ones being tested). That would equal 32 unique combinations! In order to test all those methods in the traditional way, it could take more than six months to generate the necessary amount of traffic and conversions to test all the recipes.

With Taguchi's linear algebra, however, you can find a subset of the recipes to be tested in order to test the impact of each element when combined with all the others. So instead of 32, you would only have to test 8 recipes. It gets better, though. You can test 7, 9 or 15 elements at the same time with the same amount of traffic you would need for a traditional A/B split test.

If you decided to test 15 elements at once, you could do so with just 18 pages. When those pages are set up right, every alternative of each element is tested with the alternatives for all the elements the same number of times.

You could attempt to set up these pages by hand, but that would be a nightmare. The chances that you would create the correct combination of elements on each page to run an accurate test is probably zero.

Using a program such as the Split Test Accelerator, though, you can set up a test with up to 15 elements in less than an hour. And you can be confident that all your pages are set up correctly and will run automatically. All you have to do is track the results!

But having the right software is only the "science" half of the equation. The "creative" half is up to you and is the key to making the tests generate the kind of results that will drastically improve your conversion rates. Your ideas are the foundation for every kind of test you run. The more ideas you have about what elements to test, the better your chances of finding the 4-6 elements that are going to have a major impact on your bottom line.

It takes about 100 ideas to find those 6 things that will impact your bottom line the most. But unless you test, you have no way of knowing which 6 elements are important and which 94 make no real difference.
About the Author
Glen Hopkins specializes in teaching struggling entrepreneurs how to turn their small Online businesses into thriving money machines all while working less and earning more. To get more information, including Free Reports, Videos and CDs, visit: http://www.GlenHopkins.name
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