Hi, everyone, my name is Stephanie Menz, and I'm on the customer marketing team at Toast. I’m so excited to share with you what I’ve learned about using A/B testing to help define your target audience.

Here's the agenda: we're going to do a quick intro, followed by how to define your upsell use case and upsell funnel, and then we'll dive into creative testing and audience testing.

I’ve structured this article as a tool that I wish I’d had a few years ago when I started working on customer upsell, so I hope you’ll find it helpful. We'll look at how to create A/B tests, how to create segment-specific campaigns, how to refine your target audience, how to use data to inform your upsell targeting strategy, and ways you can personalize segment-specific campaigns.

Top takeaways from the article:

  • How to create A/B tests
  • How to create segment-specific campaigns
  • How to refine target audience
  • How to use data to inform upsell targeting strategy
  • How to personalize content

What is Toast?

Before getting started, I want to give a quick overview of Toast. Toast provides a powerful online platform built for restaurants by restaurant people – it's better for restauranteurs, their guests, and their staff. We help restauranteurs to do everything from running the restaurant efficiently to managing a productive team, growing their business, online attracting and retaining guests, and more.

Defining your upsell use case

Different types of upsells serve different purposes and ways to sell solutions to your customer base. For example, there are new product launches; there’s also product-led growth as a channel; then there’s customer success, which customer marketers can use for upsells.

Customer Marketing Upsell

  1. New product launch - Goal to build new upsell funnel, define key audiences, messaging, and channels.
  2. Product-led growth
  3. Customer Success team
  4. And more.

I'm going to dive into the use case around the launch of a new product that can serve all customers and show how I use A/B testing to find that target audience. Our main goal is to generate higher quality leads from our customer base, so we can have higher conversion throughout our upsell funnel.

Defining the upsell funnel

To get started, we first need to define that upsell funnel. Here's an example of what your upsell funnel might look like.

(Alt: From top to bottom: TAM, Hand Raisers, Demo held, Win)

It may look different in your organization or various add-on products, but it's important to go through this exercise for consensus across key stakeholders and to make sure everyone's speaking the same language.

At the top of your funnel, you have your total addressable market, which is your customer base that is fit for the product. You have your hand-raisers – the customers who show their interest in the product. If your customers need a demo before purchasing, that’s the next stage. The final stage is the win.

Creative testing

Now that we’ve defined our funnel, it's time to get started with creative testing, but where to begin? When I went through this exercise, I wanted to start with the basics and make sure I had the positioning nailed down for this product; then I wanted to move on to the best audience segmentation that I could develop.

I like to think of refining the target audience as another funnel. You want to start broad and then refine to the point where you end up with customer personas for this solution.

My first step was to start testing messaging our customer base. Using the messaging framework from product marketing, you can come up with an email to send to your customer base and then start testing the subject line.

Email is a great channel for testing messaging as it's very scalable and the results are usually pretty easy to digest. I'm starting with the subject line because, ultimately, I want customers to open the email and I want to know how I can get them to open it, so they buy the product and become a hand-raiser.

Testing email subject lines

When creating your subject line A/B test, you want to make sure you have a control version of your subject line. Let’s say for test one I want to test personalization in the subject line – subject line A will have the customer's name, and subject line B will not have the customer's name; apart from that, they’re the same. This way, we can get an easy read on which subject line is the winner.

(Variation A and B for subject lines. e.g.’Stephanie’s bakery, are you free next week?’ Vs ‘Hi there, are you free next week?’)

Maybe we're hosting a webinar around the product – we can start testing “Stephanie's Bakery, are you free next week?” (variation A) versus “Hi there, are you next week?” (variation B). The winning subject line in this example is variation A, and that will become the control variation for test two.

For test two, we can experiment with including the date and time of the webinar along with the personalization token. This time, variation A is “Stephanie's Bakery, are you free on October 5th?” and variation B is “Stephanie's Bakery, are you free next week?” From here, we can see which one's the winner and keep testing our customer base.

Types of subject line tests

Here are some of my favorite subject line tests. This is by no means an exhaustive list – there are so many different tests you can do with subject lines – but I want to highlight a couple.