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.
Asssumptions
Most successful tests will improve your revenue by between 1% and 20%. We will stay on the low side of things, but your results could be double or triple what we are 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:
With a 2% improvement, your earnings increase by $200 ($10,000 * 0.02), taking your total to $10,200 for that month. - 4% Improvement (on the new total):
On the updated figure of $10,200, a 4% improvement adds $408 ($10,200 * 0.04), taking the new total to $10,608. - 5% Improvement (on the latest total):
With the new total at $10,608, a 5% boost adds $530.40 ($10,608 * 0.05). Now, you’re at $11,138.40. - 2% Improvement (on the continued total):
2% of $11,138.40 is $222.77, which brings our grand total to $11,361.17. - 3% Improvement (on the final total):
Lastly, 3% of $11,361.17 gives us $340.84, taking us to a fantastic $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 stop and are gone forever. There is long term upside and next to no downside. With tools like AB Split Test, the process is not only efficient but also lucrative. So, the next time you think of those small percentage improvements, remember the compound magic they bring to your bottom line!