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Weekly National News

Oct. 12, 2018

The First Rule of Microsoft Excel - Don’t Tell Anyone You’re Good at It

(The Wall Street Journal) By Ira Iosebashvili, October 6, 2018 – When Anand Kalelkar started a new job at a large insurance company, colleagues flooded him with instant messages and emails and rushed to introduce themselves in the cafeteria.

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He soon learned his newfound popularity came with strings attached. Strings of code. Many of Mr. Kalelkar’s co-workers had heard he was a wizard at Microsoft Excel and were seeking his help in taming unruly spreadsheets and pivot tables gone wrong.

“People would come up to me and say, ‘Hey, I hear you’re the Excel guy,’ ” said the 37-year-old metrics consultant from Oak Brook, Ill. Mr. Kalelkar said he has become “a little more passive-aggressive,” warning help-seekers, “Don’t come to me, go to Google first.”

Excel buffs are looking to lower their profiles. Since its introduction in 1985 by Microsoft Corp., the spreadsheet program has grown to hundreds of millions of users world-wide. It has simplified countless office tasks once done by hand or by rudimentary computer programs, streamlining the work of anyone needing to balance a budget, draw a graph or crunch company earnings. Advanced users can perform such feats as tracking the expenditures of thousands of employees.

At the same time, it has complicated the lives of the office Excel Guy or Gal, the virtuosos whose superior skills at writing formula leave them fighting an endless battle against the circular references, merged cells and mangled macros left behind by their less savvy peers.

‘I’ve been asked to help a whole lot of people on many occasions with the simplest tasks,’ says Anand Kalelkar.

“If someone tells you that they ‘just have a few Excel sheets’ that they want help with, run the other way,” tweeted 32-year-old statistician Andrew Althouse. “Also, you may want to give them a fake phone number, possibly a fake name. It may be worth faking your own death, in extreme circumstances.”

The few Excel sheets in question, during one recent encounter, turned out to have 400 columns each, replete with mismatched terms and other coding no-nos, said Mr. Althouse, who works at the University of Pittsburgh. The project took weeks to straighten out.

“Let’s just say that was a poor use of time,” he said. He advises altruistic Excel mavens to “figure out what you’re getting into” before offering to lend a hand.

Microsoft’s Jared Spataro, a corporate vice president for Office and Windows marketing, wrote in a recent blog post that “Excel’s power comes from its simplicity,” calling it “an incredibly flexible app.”

A company spokeswoman said the program has recently added artificial intelligence features that are “opening up new possibilities for all users.”

Nevertheless, years of dealing with colleagues’ Excel emergencies have taught John Mechalas to keep his mastery of spreadsheets a secret.

The trouble often starts with a group email asking if there is anyone who knows Excel really well, said Mr. Mechalas, a 48-year-old software engineer at Intel Corp. in Hillsboro, Ore.

“People say, ’Oh, this is just a really quick thing,’ ” he said. “Then I look at it, and it’s not a quick thing.”

These days, Mr. Mechalas will lie low until someone has a dire need before offering his expertise. His willpower was put to the test earlier this week, as he suppressed the urge to yell “just come to me for help” while staring at a badly tangled spreadsheet during a presentation.

“I’m an altruist, but it’s not my job to save the world,” he said.

Colin McIllece, 36, a New York purchasing analyst, said being good at Excel has benefits. “It’s kind of like being a wizard,” he said. “You say, ‘I can think of a spreadsheet for that,’ and it’s like you performed a magic trick.”

Mr. McIllece recalls one fiasco where a colleague presented him with a huge document saved into a jumble of folders and teeming with dreaded # symbols, usually an indication of an Excel error.

John Mechalas and Jen Lipschitz have developed strategies for dealing with colleagues seeking help. Like Mr. Kalelkar, he is now more likely to show colleagues they can find answers to their problems though Google searches—a method even the most experienced Excel users often fall back on. People who keep bothering him get their instant messages ignored.

As an Excel expert, “you become indispensable, and that’s a double-edged sword,” Mr. McIllece said.

Jen Lipschitz, a 32-year-old data analyst and project manager from Quincy, Mass., says colleagues often turn to her and the rest of her department for help with their Excel travails.

People say, “ ‘This is Jen, she’s in the smart department,’ ” Ms. Lipschitz said. “If they can’t figure out why the data is being weird, they’ll just go ask Jen down the hall.”

Ms. Lipschitz’s solution: “I’ll just stand there,” she said. As co-workers are explaining the problem, they will frequently figure it out for themselves.

She believes some people get overwhelmed by the possibilities of Excel, a program that manages to be at once simple and mind-bogglingly complex.

“People get intimidated that Excel can do so many things,” she said. “They forget that they need to try.”

Write to Ira Iosebashvili at

Appeared in the October 6, 2018, print edition as 'The First Rule of Microsoft Excel— Don’t Let On You’re Good at It.'






Taxpayers Can Have Their Cake and Eat It at an Entertainment Event, and the Cost of the Cake May Be 50% Deductible

(JD Supra) By Garvey Schubert Barer, October 9, 2018 – As we discussed in our February 27, 2018 blog post, the Tax Cuts and Jobs Act ("TCJA") eliminated the deduction for entertainment expenses.  Despite commentary to the contrary, we have consistently reported that meals continue to be deductible (subject to the 50% limitation under Code Section 274(n)) post TCJA under Code Section 274(k) as long the meals are not lavish or extravagant, and the taxpayer (or an employee of the taxpayer) is present at the furnishing of the meals.  Our position relative to meals is supported by guidance from the Service (IRS Notice 2018-76 | IRS press release) issued on October 3, 2018.  More importantly, the recently issued guidance focuses on an issue raised in our prior blog post, namely whether meals purchased at an entertainment event are deductible provided the requirements of Code Section 274(k) are satisfied.  We suspected that the Service would issue guidance on this issue.  It did.

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Texas CPA Tax Institute
in Addison and San Antonio on Nov 15-16

Notice 2018-76 offers transitional guidance on this issue. The IRS plans to issue proposed regulations, but until the regulations are actually issued, taxpayers may rely on the notice.


In general, taxpayers may deduct ordinary and necessary business expenses under Code Section 162(a). The Code has historically lumped meals and entertainment for most purposes in the same bucket. Now, these two categories of businesses expenses are generally segregated. Accordingly, taxpayers now need to keep track of these expenses separately.

A. Entertainment.

Prior to the TCJA, Code Section 274(a) prohibited the deduction of entertainment expenses, except in the case where such expenses were business-related.  The TJCA eliminated this exception altogether. Consequently, beginning in 2018, entertainment expenses incurred by a taxpayer in the conduct of a trade or business are nondeductible.

B. Meals.

As stated above, Code Section 274(k) allows a deduction for food or beverage expenses, provided such expenses are not lavish or extravagant, and the taxpayer (or an employee of the taxpayer) is present when the food or beverages are served.  Code Section 274(n) limits food and beverage expense deductions to 50%.

Prior to the TCJA, the cost of meals were 100% deductible by taxpayers in the limited cases of: (i) meals provided to workers that were included to the recipients as employee wages or as non-employee compensation; (ii) were employer-provided meals that qualified under a “de minimus” exception; or (iii) were employer provided meals “for the convenience of the employer” (e.g., employer operated on-premises cafeterias).

The TCJA changed the rules in this area a bit, but the changes only impact items (ii) and (iii) above (i.e., the rules relative to meals included in wages or as compensation are unchanged).

Beginning in 2018, meals provided under the “de minimus” and “for the convenience of the employer” exceptions are no longer 100% deductible; rather, they are 50% deductible.

CAUTION: After 2025, however, these two categories of meals will no longer be deductible at all. We suspect, however, large employers that have employer provided cafeterias (e.g., Google) will be lobbying Congress.

Notice 2018-76

Notice 2018-76 sets forth transitional guidance regarding the deductibility of food and beverages in the entertainment context.

The Notice provides that taxpayers may deduct 50% of an otherwise allowable business meal expense if:

  1. The expense is an ordinary and necessary trade or business expense under Code Section 162(a);
  2. The expense is not lavish or extravagant under the circumstances;
  3. The taxpayer, or its employee, is present at the furnishing of the food or beverages;
  4. The food and beverages are provided to a current or potential business customer, client, consultant, or similar business contact;
  5. The food and beverages are purchased separately from the entertainment, or the cost of the food and beverages is stated separately from the cost of the entertainment on one or more bills, invoices, or receipts; and
  6. Amounts charged for food and beverages may not be inflated to circumvent the rule.

The Notice provides three examples to illustrate the above rules (each example assumes that the expenses are ordinary and necessary, and are not lavish or extravagant):

EXAMPLE 1: A taxpayer pays for a business contact and the taxpayer to attend a sporting event, purchasing tickets and food and beverages separately.  In such instance, the taxpayer may not deduct the ticket expense, but the taxpayer may deduct 50% of the separately billed food and beverage expenses.

EXAMPLE 2: A taxpayer pays for a business contact and the taxpayer to attend a sporting event in a suite where the cost of the ticket includes but does not separately state the cost of food and drinks.  The taxpayer may not deduct the ticket expense or any of the food and beverage expenses as the two were not separately stated from each other.

EXAMPLE 3: A taxpayer pays for a business contact and the taxpayer to attend a sporting event in a suite where the cost of food and drinks are separately stated from the cost of the tickets.  The taxpayer may not deduct the ticket expense, but the taxpayer may deduct 50% of the separately stated food and beverage expenses.

The IRS plans to issue proposed regulations regarding the deductibility of meals in the entertainment context.  Until then, as stated above, taxpayers may rely on the Notice.

We suspect, entertainment venues will start doing a better job to separately state food and beverage costs from event ticket costs. That said, some cautions relative to the deductibility of meals provided at entertainment events should be closely followed:

  1. As was the case prior to the TCJA, all business expenses, including meals, must be ordinary and necessary. In the context of meals provided at entertainment events, the person(s) attending the events with the taxpayer or the taxpayer’s employee must be current or potential business customer(s), client(s), consultant(s), or similar business contact(s).
  2. The meal expense cannot be not lavish or extravagant under the given circumstances.
  3. The taxpayer or an employee of the taxpayer must be present at the event where the meals are provided.
  4. The food and beverages must be purchased separately from the entertainment event tickets, or the cost of the food and beverages must be stated separately from the cost of the entertainment event on the bill, invoice or receipt.
  5. Amounts charged for food and beverages may not be inflated to circumvent the rule.

The TCJA does little to provide simplification to our tax laws. We will continue to provide guidance on the many issues that arise from this comprehensive and complex tax act. Stay tuned!






The Words and Phrases to Use - and to Avoid - When Talking to Customers

(Harvard Business Review) By Sarah Moore, Brent McFerran, Grant Packard, Oct. 4, 2018 –

The key to any successful relationship is effective communication. In the business world, this means trying to understand what consumers and clients are saying, and responding to them in ways that reflect that understanding. For the most part, however, the way businesses have used language to persuade, satisfy, or rectify has been more art than science.

The retail world in particular abounds with catch-phrases, habits, and commonly copied templates: “Say it with a smile.” “Never say no.” “Sorry is a magic word.” “A person’s own name is the sweetest sound in any language.” But do these and other long-held tips about how to speak to customers really work?

Studying the effectiveness of the words businesses use to talk to customers is tricky, but the rise of digital communications, social media, and big data is producing massive amounts of text that researchers can analyze and interpret using sophisticated new techniques. By combining natural language processing, computational linguistics, and psychology experiments, we can now uncover the true importance of subtle variations in how customers talk to front-line employees, and how customers respond to the words chosen by those employees. This allows us to understand the ways people communicate in business settings with growing precision, and what language is most effective.

It is now clear, according to our research and that of others, that some of the time-honored truths of customer service interactions fail to hold up to scientific scrutiny. You can, for example, say “sorry” to a customer too many times. Even if you’re a member of the company’s team, it is often better to say “I” than “we.” And not every piece of communication needs to be perfect; sometimes, a few mistakes produces a better result than flawlessness.

Here is the latest on the fast-growing, insightful, and sometimes surprising new world of business language research.

Be Human…

The body of research analyzing language use among customers, and between employees and customers, suggests a personal touch is indeed crucial. This is particularly important given the growing frequency of conversations that happen via technology (the phone, email, text, or chats) rather than in-person. Here are a few tips based on the latest research:

Speak as an individual, not part of a team. While companies and employees believe they should refer to themselves as “we” when talking to customers, and actually do so in practice, our research shows this practice is less than ideal. In a series of controlled studies, company representatives who referred to themselves in the singular voice (e.g., “I”, “me”, or “my”) were perceived to be acting and feeling more on behalf of customers than those who adopted less personal plural pronouns (“we” or “our”). For instance, saying “How can I help you?” outperforms “How can we help you?”). For one company, an analysis of over a thousand email interactions with customers found that switching to first person singular pronouns could lead to a potential sales increase of over 7%.

Share the same words. People who mimic the language of the person they’re interacting with are trusted and liked more, whether this mimicry entails how they talk (pronouns like “I” or “we,” articles like “it” or “a”) or what they talk about (nouns like “car,” verbs like “drive,” adjectives like “fast”). For example, in response to a customer inquiry such as “Will my shipment arrive soon?” an agent would be better off saying “Yes, your shipment will arrive tomorrow,” rather than “Yes, it’s being delivered tomorrow.” Employees’ linguistic mimicry creates affiliation with the customer, and research in progress by Francisco Villarroel Ordenes, Dhruv Grewal, Lauren Grewal, and Panagiotis Sarantopoulos has linked mimicry to customer satisfaction. Rapport can also be created by asking employees to imagine the customer as similar to themselves (e.g., shared background, personal, or business interests), even when they may be thousands of miles apart.

First, relate. Researchers performing automated text analysis of hundreds of airline customer service transcripts found that, consistent with consumer self-reports in prior research, expressing empathy and caring through “relational” words was critical, at least in the first (opening) part of service interactions. Relational words are verbs and adverbs that demonstrate concern (e.g., please, thank you, sorry) as well as signal agreement (e.g., yes, uh huh, okay). While this finding may not seem surprising, what may be for some is that front-line employees shouldn’t necessarily offer a caring, empathetic touch over the entirety of the interaction.

… And Then Take Charge

While using words that establish a more personal rapport with customers is important out of the gate, a new trove of research suggests that the assumed importance of front-line “empathizers” may be limited. More sophisticated analysis of the language of customer interactions suggests that once they’ve shown they’re listening, front-line employees should quickly shift gears towards language that signals a more assertive, “take charge” attitude.

Move from relating to solving. The same research that examined airline check-in service transcripts found that after an initial period in which the employee demonstrates their empathy for the customer’s needs, hearing employees say “sorry” and other “relating” words had little effect on customer satisfaction. Instead, automated text analysis revealed that customers wanted employees to linguistically “take charge” of the conversation. Specifically, this research suggested a shift to “solving” verbs (e.g., get, go call, do, put, need, permit, allow, resolve) as the interaction unfolds was an important predictor of customer satisfaction.  Similar results were found by Ordenes and his colleagues in their in-progress research that analyzed a major consumer product company’s online chat-based interactions with customers. Automated text analysis of these conversations found that customer satisfaction is higher when front-line employees dynamically shift from deferent words (e.g., afraid, mistake, pity) to more dominant language (e.g., must, confirm, action).

Be specific. Analysis of the language used in telephone and email customer service interactions at two major retailers found that after the introductory phase of a conversation, when agents must show they are listening, customers see employees as more helpful when they use more concrete language. For example, for a clothing retailer, “white turtleneck” is more concrete than “shirt,” and “sneakers” is more concrete than “shoes.” Lab experiments currently underway by one of us (Grant Packard) and Jonah Berger suggest that using more concrete language signals to the customer that the agent is psychologically “closer” to the customer’s personal needs. For one of the retailers, a field analysis of over 1,000 email service interactions found that moving from “average” concreteness to one standard deviation above the average (roughly speaking, at about the 68th percentile of linguistic “concreteness”) was linked to a 4% lift in customer purchases after talking to the employee.

Don’t beat around the bush. Analysis of the language used in consumer and expert product reviews — plus lab studies — suggest that subtle variations in the words used to endorse a product or action can have substantial effects. For example, people are more persuasive when they use words that explicitly endorse the product to the customer (“I suggest trying this one” or “I recommend this album”) rather than language that implicitly does so by sharing the speaker’s personal attitude (“I like this one” or “I love this album”) towards a product or service. This is because explicit endorsements signal both confidence and expertise on the part of the recommender, a perception that could be particularly important in personal selling contexts.

As more and more consumer-firm conversation moves online or to other text-based media, the importance of utilizing language properly is greater than ever. However, firms are frequently teaching their employees to use language that doesn’t stand up to scientific scrutiny. Fortunately, new research using automated text analysis and methods from linguistic psychology offer some simple, actionable, and nearly cost-free solutions to improve the speaking terms by which companies engage their customers. What’s more, advances in natural language processing and machine learning seem primed to help researchers and managers uncover even deeper insights on how words really work for businesses.






Cybersecurity Facts Tax Practitioners Need to Get Right

(AICPA Insights) By Allison Carter Fanney, Oct. 9, 2018 – How many emails does your firm receive in one day?

Whatever the number, there’s a good chance a chunk of it is malware. According to a 2018 report compiled by Symantec, Corporation, one in 412 emails contained malware in 2017. For businesses with less than 250 employees, this rate jumped to one in 376 emails. When you consider just how many emails the average office worker receives in a week, things can look a little scary.

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Cyberattackers represent a growing and evolving threat to CPA firms. Perpetrators are seeking sensitive client information, financial records and firm data like PTINs using any method available to infiltrate your defenses. And a lot of times, it works.

Understanding how to ward off these attacks is half the battle. Learn how to dispel common misconceptions about cybersecurity so you can be better prepared to face down any threat to your data.

Myth 1. Cybersecurity protocols are guidelines.

A robust cybersecurity plan isn’t optional for your tax practice. You’re legally required to protect your clients’ private information. It doesn’t matter where you live in the country or how many clients you have, your job is to keep would-be cyberthieves at bay.

The Federal Trade Commission (FTC) requires all tax preparers to create and enact security plans to protect client data. On top of that, all financial institutions — including CPA firms — must safeguard sensitive data under the Gramm-Leach-Bliley (GLB) Act. Although CPAs are exempt from some aspects of GLB, they must develop a written information security plan that describes how they’re prepared to safeguard client information and how they’ll continue protecting clients’ nonpublic personal information.

Not adhering to these guidelines will get you in hot water. You could lose your business or find your reputation with clients and your peers is damaged. On top of that, you’d be on the financial hook for breaches resulting from improperly secured client data. At an average of $148 per record, that’s quite a bit of cash.

Myth 2. Encrypted email is a safe way to send information to clients.

There’s a reason the IRS doesn’t send transcripts via email.

Your firm can have the very latest cybersecurity software and still spring a leak through email. That’s because to transfer a message from one computer to another, the email must go through multiple servers and sites along the way. And at any point, that message could be intercepted.

No matter whether you employ security certificates or message encryption, your clients are probably not going to such extremes to protect their email communications. Consider using client portals — secure online storage centers — to transmit all sensitive information to clients.

Myth 3. Third-party service providers have protocols in place that protect client data.

In May 2017, Target Corporation was ordered to pay $18.5 million to 47 states and the District of Columbia after a 2013 security breach compromised customer data. Because of the breach, cyberthieves stole the debit and credit card information of more than 40 million customers.

How did hackers gain access to Target’s sensitive customer data? By attacking a third-party vendor and snaking their way into the company’s servers. It’s the same way hackers can infiltrate your firm’s client data if you don’t fully vet your vendors. Here’s how:

  • Look into the security practices of all vendors who handle any sensitive client data or who access or may access servers where client data could be held.
  • Review your vendors’ security policies and require copies for your records.
  • Be sure they perform internal security audits and ask to see their SOC 2 report.
  • Vet their background and references and find out if there’s a history of data breaches.

You should avoid any third-party vendor that can’t guarantee the protection of your clients’ sensitive information.

Myth 4. The changes to tax transcripts will keep tax data safe.

Recently, the IRS announced it would change the format for individual transcripts in an effort to protect taxpayer data. As of September 23, personally identifiable information and data, such as birth dates and full Social Security numbers, have been redacted from the Form 1040 series. Should an identity thief gain access to an individual’s transcript, they’ll be unable to access key personal information that would enable them to create a fake return.

While eliminating sensitive information creates a stumbling block for identity thieves, it won’t stop all tax-related identity theft. Hackers can adapt, and transcripts aren’t the only place they can get this information. They can get this and more by going to just one place: your firm.

If cyberthieves target your practice and breach your cybersecurity, they’ll gain access to a treasure trove of private information including passwords, maiden names, birth dates and credit card information. If you aren’t the first line of defense against hackers, no changes to tax transcripts will keep your clients’ data secure.

Bonus myth: The latest technologies will protect client data.

Your firm is doing everything right. You’ve installed and activated software and hardware firewalls. You’ve secured your wireless networks and set up web and email filters. Your clients are routinely using portals. You’ve vetted all vendors, and your passwords are indecipherable. In short, your defenses are impregnable.

Not even close. Because there’s one variable you haven’t considered: your employees.

It’s possible that your employees are the biggest threat to client data. Focusing on network security while ignoring employee training can lead to a disaster. According to a report by IBM Security, most data breaches can be attributed to human error.

Proper training and limiting employee access to data and information is key to reducing these errors. This includes helping employees identify suspicious emails and phishing attempts that can create gateways for hackers to enter your servers. And if disaster strikes, develop a plan to respond to security incidents quickly.

Cyberattacks are a reality of doing business in the modern world. But they don’t have to derail your firm. Take charge of your firm’s security. Review the resources available in the AICPA Cybersecurity Resource Center and use the downtime before busy season to get up to speed on how you can best protect client and customer data. For a deeper dive into tax identity theft, visit the Tax Identity Theft Information & Tools Resource Center made available by the AICPA Tax Section.

Cyberthieves aren’t going to wait. Why would you?

Allison Carter Fanney  Communications Manager - Tax, Association of International Certified Professional Accountants






Are Your Value Propositions Working?

(Publication) By Acadia Otlowski, October 4, 2018 ndash;

A value proposition is a statement or promise you make that attempts to position your brand as worthy of being noticed and purchased from.

Basically, a value proposition helps your customer answer the question: Do the benefits of buying from your brand outweigh the cost?

If you don't know the value propositions that make your brand and your products worthwhile, then your brand will never stand out in the crowded digital space (or elsewhere). You must know what makes your brand, along with its offerings, valuable—or it will get lost among all the other companies selling similar products or services.

Maybe that's why 69% of brands have established a value proposition. It helps them find and focus on their niche.

Here's an example of a used car salesman who really knows his value proposition.

Like it or not, he knows that his primary value proposition, "You should come to my business because you normally can't get a loan," is his best one for getting customers in the door.

You don't have to be as forward as John Loman, but it's worthwhile to identify and determine which value propositions are successful.

But how do you know whether your efforts are working?

1. Isolate the value proposition

If you've identified your value propositions, you're already on the road to creating more effective content.

If you haven't clearly defined your value proposition, do that first.

For example, if your company sells marketing automation software to other marketers, you want to isolate why those marketers buy your product and what your brand knows and does better than its competitors.

That's a process that our friendly neighborhood car salesperson, John, knows.

The difference between you and John is that you want to isolate the value proposition and use it as the lone variable in your tests. That is the only way to tell which value propositions are driving your conversions.

If we break down John's commercial, he touches on these value propositions:

  • He'll give you $5,400 more than your trade-in is worth.
  • Even if your credit is wrecked, ruined, bruised, battered, or bankrupt, he can give you a loan.
  • If you have no credit, he will give you a loan.
  • He'll even double your down payment up to $5,000 dollars.

If you want to test the effectiveness of one of John's value propositions, you need to select one of them and create content focusing on that single value proposition.

You should be able to read a value proposition in under five seconds. That means you can test anywhere, from a social media post to a two-minute commercial.

Let's say you go with the credit angle. You can create a commercial saying that no matter what your credit situation, you can get a loan from John.

That is how you isolate your value propositions. From there, you need to start making content about each of them.

2. Determine the channel to test

Certain value propositions will work better in certain channels.

In John's case, he would likely want to create television ads, radio ads, and banner ads. Maybe he even wants social media ads.

Choose which channels you want to test. Maybe you want to test email, LinkedIn, and Twitter.

Determine the forms of content that perform best. For example, on most social media, videos and pictures are the best way to get attention.

In email, you want to ensure your content is easily accessible on all devices and email clients. At the same time, you also want to ensure every element, from subject line to downloadable asset, is packed with value.

Create content that focuses on using the variable you isolated in the prior step.

3. Find the goal metrics

Now that you've isolated the value proposition for testing and created the corresponding content for it, you need to define which metrics you will measure to determine whether the value proposition is working.

To do that, figure out what action you want potential leads to take for each channel you use.

For example, John would measure the success of his radio and TV ads by the number of people who show up at his dealership and call to inquire about his vehicles (using something like promo codes to track the channel that led to the conversion).

Look for the call to action. Track the associated metric. It's that simple. If you're measuring social media metrics, you want to track comments, clicks, views, shares, and likes.

If you're measuring email, you want to measure opens, clicks, downloads, and any other behaviors tied to your CTAs.

Also keep track of how many people purchased after taking any of the actions you are tracking.

4. Figure out what you are testing against

Now that you know what to measure, you must determine whether your numbers indicate success.

You can do that in the following ways:

  • Head-to-head. Compare how two different value propositions perform against each other on the same channel. Or you can compare how the same value proposition performs on two different channels.
  • Historical metrics. You should have metrics from previous campaigns. Compare metrics from your current value proposition-based campaigns with the same metrics from past campaigns.
  • Industry benchmarks. Locate industry benchmarks for metrics you are tracking. Find out what conversion rates look like at successful companies in your industry, if you can. Find benchmarks for the industry as a whole. Set a goal based on those markers.
  • Self-defined. Set a goal based on an educated guess. Early on, you might not have historical numbers or industry benchmarks to use. Or maybe you're shooting to go far beyond historical benchmarks or industry standards. In those cases, pick a benchmark that seems reasonable and matches your goals.

Set a target number for the first month of testing. If you find that your number is unachievable, or that you are constantly blowing past your success indicator, the target might need to change. After the first month, don't mess with it too much; you want your goals to be relatively stable.

Now what?

You've set up your content and know what to track to determine whether your value proposition is successful.

Send out your emails, put up social posts, and put out other communications. From there, organize your data and look for the indicators of success that you set in step 4.

Decide what you want to do with your data: Determine the real-world implications of the data you've collected.


  • Should you use only the best value proposition or a variety of the best ones you've tested?
  • Can you combine one or more to increase your chances of success?
  • How does the channel change the relative importance?

If John were to objectively test his value propositions, he would be able to create more targeted advertisements for each channel. He could create commercials with far fewer moving parts that resonate better with his audience.

Make one change at a time so you can see the effects of each change. Otherwise, you won't be able to figure out what works and what does not.

If you don't test your value propositions at all, how do you know what you should be spending your time on? Give the system in this article a try to see how your marketing efforts improve.