In the early days of online retailing, brands could significantly improve conversion and revenue growth through simple A/B testing and site optimisation. Now, the achievements from these methods are diminishing.
The slowing ecommerce growth rate, combined with many brands still offering a ‘one-size fits all’ website, means retailers could be optimising until the cows come home, and still not achieve growth.
Marketers and ecommerce directors believe the key to achieving growth is personalisation. According to a survey by Deloitte and Salesforce, 92% of brands are either using personalisation currently or planning to in the future. But what exactly is personalisation and how should brands be measuring the value it brings?
We view personalisation as knowing every consumer as an individual, and delivering them a unique and relevant experience across all channels. Wherever you start, using personalisation to generate a seamless multichannel experience regardless of device or channel, ensures customers’ preferences remain at the heart of the shopping journey.
One of the more traditional approaches to quantifying the success of personalisation is the return on investment (ROI). By taking a look at the overall return delivered by personalisation technologies, a brand can see solid evidence of the impact of personalisation and evaluate the investment against individual business goals.
Forrester Consulting recently undertook a ‘whole life’ analysis of the returns from incremental revenues and cost savings of personalisation for a large office supplies retailer. In this instance, it recorded an overall ROI of 595:1, with payback on the initial investment of one month.
But it is no longer just as simple as monitoring ROI; for many brands the return on experience (ROE) can offer a more compelling and relevant metric, which enables a business to gauge the effectiveness of personalisation.
Why? ROE gives laser focus to measuring the individual results that changes to the customer experience bring to positively affect customer life-time value and ultimately the financial well-being of the brand.
Where brands are using personalisation to segment and target (eg, via region, gender, device etc), or to differentiate experiences between multiple customer types (eg, new/returning/lapsed/VIP), measuring the return on experience gives the ability to individually measure and improve the experience for each segment which in turn generate revenue and contribute to ROI.
Personalisation is proving itself to be a game changing solution for retailers. Brands can differentiate themselves from the herd and build a lasting relationship with the consumer that sees both a return on experience, and an overall return on investment.
Mike Harris is vice-president of EMEA at Monetate
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