Maximizing Profits with Incremental Improvements: The Compound Power of Split Testing
You’ve likely heard the phrase, “Little things make big differences.” In the world of conversion optimization, those words ring exceptionally true. And thanks to tools like AB Split Test, the process of making those “little changes” is faster and more streamlined than ever.
Let’s understand the compound benefits of consistent incremental improvements using an example.
Starting Point:
Your website currently makes $10,000 per month.
Assumptions:
Most successful tests will improve your revenue by between 1% and 20%. We’ll stay on the low side of things, but your results could be double or triple what we’re describing below.
The Plan:
Create a split test every 2 months for 10 months. See what the increase of ARR is from creating 5 tests.
Understanding the Compound Benefit:
-
2% Improvement:
$10,000 * 0.02 = $200
→ New total: $10,200 -
4% Improvement (on $10,200):
$10,200 * 0.04 = $408
→ New total: $10,608 -
5% Improvement (on $10,608):
$10,608 * 0.05 = $530.40
→ New total: $11,138.40 -
2% Improvement (on $11,138.40):
$11,138.40 * 0.02 = $222.77
→ New total: $11,361.17 -
3% Improvement (on $11,361.17):
$11,361.17 * 0.03 = $340.84
→ Final total: $11,702.01
From the initial $10,000, you’ve grown your monthly earnings to $11,702.01 — a net increase of $1,702.01 or a 17.02% improvement, all from compounded, smaller tests.
These numbers are made up, but this isn’t a hypothetical scenario; it’s the true potential of consistent conversion optimization. While every test won't always yield positive results, the ones that do can have a compounding effect on your revenue. The ones that don’t simply stop and are gone forever.
There is long-term upside and next to no downside.
So, the next time you think of those small percentage improvements, remember the compound magic they bring to your bottom line!
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