Insider’s new Executive Summary Dashboard helps ROI-focused marketers to track their personalization performance and campaign optimization capabilities. It’s a much-needed specification today.
To personalize or not to personalize, is no longer a moot question for marketers today. They understand the value it provides in delivering unique customer experiences. However, this path to the perfect personalized experiences remains bumpy, as marketers are still uncertain about the economics behind the concept: Can they justify a business case for personalization? How do they evaluate personalization ROI?
Besides, marketers need to experiment to fine-tune the personalization journeys they build. A/B Testing is best suited for this, as it uses technology to find the best-fitting personalized templates and features.
While experiments are the way forward to create personalized user experiences, measuring and optimizing them is not as easy. Marketers need to track individual customized campaign performances along with goal-based ROI tracking to prove that personalization actually works. This is particularly important while making a business case for personalization to the higher management, who want to know the hard numbers – the actual revenue and return on investments (ROI). Most marketing platforms have dashboards to track campaign performances. But they usually fall short of measuring the real impact of personalization in terms of ROI.
Why You Should Measure Personalization ROI
In today’s digital age, where companies inundate their customers with marketing messages, personalization helps a brand to stand out. Users are served experiences that are precision-targeted to meet their needs and preferences across channels. As companies across the board embrace personalization, you’re leaving money on the table if you’re not doing it. Personalization is an effective way to acquire new customers, engage better with them and boost conversions for higher revenue generation.
To optimize your campaign for better ROI, the first step is to measure the personalization performance. The following table shows how different your marketing metrics will look post-personalization.
Conversion rate and Average Order Value (AOV) are two key metrics that give a direct boost to revenue. Even a 10% uplift in these metrics can result in a 26% uplift in the final revenue and ROAS. This highlights the importance of personalization and the need to track it to ensure better ROI. Read our personalization ROI blog to know more. If you are new to personalization and yet to kick start your personalization campaigns, read this blog.
ROI-Metrics For A/B Personalization Testing
We have already seen that conversion rate and AOV uplift are key indicators that reveal your personalization methods are working. However, these are only two among the many metrics that matter to a marketer. Here are some other key metrics that marketers should track to optimize their personalization outreach for maximum ROI:
- Incremental Conversions: This gives you the net conversions that come from personalization, over and above the control group conversion value. It’s usually expressed in numerical terms over the benchmark number.
- Incremental revenue: This metric provides the net revenue generated from personalization over the control group. It’s usually expressed in monetary terms, either as a cumulative number or as an absolute amount over the benchmark value.
- Conversion Rate Uplift: This is the change (increase or decrease) in the conversion rate of the personalized version over the control group. It is usually expressed as a percentage. By tracking conversion rate uplift, marketers get to know how effectively their personalization strategy is working in terms of contributing to revenues.
- Average Order Value Uplift: This metric provides the net increase in the average order value of a test group against the control group. It is either given in percentage or in monetary value terms. In industries like ecommerce, it quantifies the personalization-led extra order values from the same set of customers.
- Significance: A campaign or personalization is said to have high significance (or statistical significance ) if a particular personalization has shown visible effectiveness over its control group. This effectiveness is usually measured in terms of a positive change in impressions or an increase in uplifts like conversions or average order value.
- Email ROI : Emails are still the most popular and one of the best bang-for- your buck channels used by marketers. Along with engagement metrics like Open Rates, Conversion Rates and CTR, ROI-focused metrics like Click-Through-Revenue help to directly attribute revenue generated by email personalization campaigns.
- Sales/Revenue From Clicks: This metric provides the total sales or revenue figures from your personalization campaigns. It is expressed in gross sales or revenue figures. Usually, both these metrics track sales or revenues that are the outcome of specific personalization efforts and attribute itself to the effectiveness of these changes in creating direct sales and revenues.
- Web Push ROI : This is one of the best performing channels when it comes to engaging with your opt-in subscribers. The best web push strategies revolve around one-on-one individualized messaging based on a customer’s needs and historical or predictive behaviors. Combined tracking of opt-in and engagement metrics helps measure the ROI of web push personalization campaigns.
- Custom Goal ROI metrics: Revenues, sales, conversion rates and AOVs may not be the only goals that matter- especially in industries like commerce. Marketers may also want to track their custom and micro-goals, like page views, product views, add to cart ratio, cart to sales ratio and other custom-defined metrics. Success rate, uplift rate and conversion tracking can help measure the ROI of such custom goals easily.
How To Make Use of The Metrics?
We now know what ROI-metrics need to be tracked to gauge personalization performance. These metrics may be straightforward, but they have to be used in the right way to optimize campaign performances. There are several ways in which marketers can excel A/B personalization testing using these metrics. Let’s look at the three main use-cases:
- Run unlimited personalizations: Every individual customer’s needs and requirements are different. Hence one-on-one messaging for hyper-individualized experiences is the future of marketing. With the key ROI-metrics tracked, marketers can now run as many numbers of personalization experiments, using multitudes of customer segments and still keep track of their goals.
- Identify and optimize the winning campaigns: With the power of personalization ROI-tracking, you can easily pick the best (or worst) performing campaigns. This is especially true for industries like retail and ecommerce, where thousands of personalization campaigns run simultaneously.
- Track channel-wise personalization ROI: This metric helps marketers spot the most preferred channels to grow their customer base. For example, they can run web push personalizations for those segments who have responded positively to web push notifications.
Where To Track Personalization ROI?
Now that we’ve understood what are the key metrics to track and how to make use of them for optimizing personalization strategies, the next logical question is how and where to find and track them. Insider’s product team spent long hours with its existing partners and customer success managers to come up with an extensive dashboard to track all ROI-first personalization metrics in one single view.