Understanding Personalization Metrics - How to Measure Success

Oct 27, 20152 likes2,775 views

In order to know if your personalization strategy is working, you need to understand how to measure success. Get to know the metrics that impact web personalization and how to improve performance.

Understanding Personalization Metrics
How to Measure Success

How to Measure Personalization?
Tough question for retailers is how
to measure success
CTR, AOV,
CONVERSION?

Why Measure?
Purpose behind measurement:
• What works?
• What doesn’t work?
• How to improve performance?

Target Segment
Who are you targeting?
• Defining your personalization target is essential
• Differentiate between shoppers who interact and those who don’t (Responder
v. Non-Responders)
• Consider which responders are relevant to your business goals
RESPONDER
Interacts with personalized content
NON-RESPONDER
Doesn’t interacts with personalized content

Time Segment
When are you targeting?
• Date range
• Seasonal trends
• Campaign related behavior (sale)
Need to consider time elements
to measure accurately

Object Segment
What are you targeting?
• Product recommendations
• Content
• Images
• Message
• Video
• Article
• Blog
• Different measurement for different
personalization strategy

Location Segment
Where are you targeting?
• More than just a channel factor
• Geo-location (state, city)
• Page location (homepage, cart page)
• Stage in shopping funnel

Defining Demand
Demand comes in many forms
• Revenue
• Channel
• Segmentation
• Shopper type
• Top sellers
• Profit margin
It’s all about responder and
recommendation demand!

Testing Demand
Personalization strategies are
used to increase response
Test different strategies to measure shoppers’
response
• Success is measured by:
• Responder demand
• Recommendation contribution
• Average order value

Testing Demand
Aspects to analyze
• Does a combination of strategies work more effectively than a single strategy?
• Is your margin staying steady or increasing?
• Are more shoppers responding to the strategy than non-responders?
• What were your measurements before/after your personalization efforts or after
changes to your personalization strategies?
• Which strategies can you leave behind to focus on those that are delivering more
recommendation demand, more responder demand, and higher AOV?

Average Order Value Defined
For retailers, AOV is a crucial KPI
• An essential part of understanding how to generate new revenue
• Have to look at AOV along with conversion rate
AOV
CONVERSION AOV
CONVERSION

Revenue Per Visit
Revenue per visit (RPV) is important in the quest to
better understand your customers and how they
interact with your site as a whole
• RPV = Conversion Rate x Average Order Value
• For Example, giving up a little conversion rate
can result in a bigger gain in AOV, overall
boosting RPV

Revenue Per Visit
The Sweet Spot: Combination of conversion rate (CR) and
AOV that maximizes your businesses RPV. Sweet spots differ
by industry.

Fine Tuning
Look at your site to see what you can improve
• Different products and verticals have different
abilities to influence AOV
• Research your products to develop right
strategy to increase AOV
• Sell more accessories, cross-selling, up-selling
• Test changes to merchandising rules and
analyze results

Thank You!
Learn more about personalization metrics by
downloading our free eBook below.
DOWNLOAD PERSONALIZATION METRICS EBOOK
www.Certona.com | info@Certona.com

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Understanding Personalization Metrics - How to Measure Success

1. Understanding Personalization Metrics How to Measure Success

2. Why Personalize? Today’s eCommerce world is overcrowded! Personalization solves this problem and creates trust and loyalty

3. How to Measure Personalization? Tough question for retailers is how to measure success CTR, AOV, CONVERSION?

4. Why Measure? Purpose behind measurement: • What works? • What doesn’t work? • How to improve performance?

5. Segmentation Defined

6. Target Segment Who are you targeting? • Defining your personalization target is essential • Differentiate between shoppers who interact and those who don’t (Responder v. Non-Responders) • Consider which responders are relevant to your business goals RESPONDER Interacts with personalized content NON-RESPONDER Doesn’t interacts with personalized content

7. Time Segment When are you targeting? • Date range • Seasonal trends • Campaign related behavior (sale) Need to consider time elements to measure accurately

8. Object Segment What are you targeting? • Product recommendations • Content • Images • Message • Video • Article • Blog • Different measurement for different personalization strategy

9. Location Segment Where are you targeting? • More than just a channel factor • Geo-location (state, city) • Page location (homepage, cart page) • Stage in shopping funnel

10. Defining Demand

11. Defining Demand Demand comes in many forms • Revenue • Channel • Segmentation • Shopper type • Top sellers • Profit margin It’s all about responder and recommendation demand!

12. Testing Demand Personalization strategies are used to increase response Test different strategies to measure shoppers’ response • Success is measured by: • Responder demand • Recommendation contribution • Average order value

13. Testing Demand Aspects to analyze • Does a combination of strategies work more effectively than a single strategy? • Is your margin staying steady or increasing? • Are more shoppers responding to the strategy than non-responders? • What were your measurements before/after your personalization efforts or after changes to your personalization strategies? • Which strategies can you leave behind to focus on those that are delivering more recommendation demand, more responder demand, and higher AOV?

14. Average Order Value Defined

15. Average Order Value Defined For retailers, AOV is a crucial KPI • An essential part of understanding how to generate new revenue • Have to look at AOV along with conversion rate AOV CONVERSION AOV CONVERSION

16. Revenue Per Visit Revenue per visit (RPV) is important in the quest to better understand your customers and how they interact with your site as a whole • RPV = Conversion Rate x Average Order Value • For Example, giving up a little conversion rate can result in a bigger gain in AOV, overall boosting RPV

17. Revenue Per Visit The Sweet Spot: Combination of conversion rate (CR) and AOV that maximizes your businesses RPV. Sweet spots differ by industry.

18. Fine Tuning Look at your site to see what you can improve • Different products and verticals have different abilities to influence AOV • Research your products to develop right strategy to increase AOV • Sell more accessories, cross-selling, up-selling • Test changes to merchandising rules and analyze results

19. Thank You! Learn more about personalization metrics by downloading our free eBook below. DOWNLOAD PERSONALIZATION METRICS EBOOK www.Certona.com | [email protected]

Understanding Personalization Metrics - How to Measure Success

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