Measuring the Success of Personalization: Key Metrics and KPIs

Brands have never faced such a competitive landscape as they do in today’s environment. Marketers and advertisers are trying and testing different tactics and strategies only to grab the attention of their target audience. And one of the essential strategies helping them navigate the highly-competitive roadmap is personalization.

Brands offer customized content, lucrative offers, and experiences to individual users to create more meaningful connections with their customers and drive better results. At the same time, trying new and innovative things help businesses to test new ideas, learn from their failures and successes, and also improve their strategies too.

But is there a tried and tested formula to bank on customer personalization? Yes, the key lies in measuring the success of personalization using key metrics and KPIs.

Keep reading and we will revise with you the most important KPIs for personalization and discuss the kind of metrics to track in order to win in the highly-competitive digital landscape.

Why Personalization is Worth the Salt

We have all heard about personalized content, messages, ads, and so on. In simple words, personalization is customizing the experience of repeat customers so they can better connect with the brand. Marketing personalization lays its foundation on the insights extracted from the data gathered in the past through customer interactions, purchases, feedback, and more.

Personalization is important because it makes your customers feel special and heard. They are happy to see the recommendations of products and services they are interested in. The tailored content encourages the customer to stay glued to your brand for a long time.

Key Metrics to Measure Success of Personalized Marketing

Recently, Forrester conducted a survey of 372 business decision-makers. The survey revealed that only 30% of the firms measure their performance using the right metrics.

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That said, here are some of the key metrics to measure your personalization success:

1. Average Revenue Per User

It is one of the key personalization metrics mainly used in the SaaS industry. You can track the metrics when you roll out tailored packages for customer segments.

For instance, your SaaS company provides its customers with a tool to measure customer retention. Now, your company rolls out a lead generation tool at a 5% discount to its loyal customers.

In such cases, it becomes essential to measure ARPU to determine the effectiveness of the campaign and roll out further extensions.

Here is a simple formula to measure ARPU:

2. Cart Abandonment

You can combine this metric with the past behavior of the customer to get insights into their previous purchase behavior. You may have an ample of regular customers who are eyeing discounts. They will buy only when they can see lucrative discounts from your brand. They shall abandon their cart if they fail to find the desired discounts on the website.

The particular behavior helps you segment the group as discount seekers. The data will help you create tailored campaigns offering discounts to this specific group and track the cart abandonment rate to measure the success of the campaign.

3. Revenue Per Visitor

Revenue per visitor (RPV) is a simple yet effective metric representing the average revenue generated by each visitor who visits your website.

Thus, RPV can be calculated as:

If you monitor RPV, the insights will tell you how effective your personalization campaign was and how much revenue you could generate during that specific period.

4. Customer Retention Rate

Customer Retention Rate (CRR) is the percentage of repeated customers of your company over a specific period of time.

Here’s how you calculate CRR:

Tracking customer retention rate enables you to gauge the effectiveness of your personalized strategies in fostering customer loyalty and driving overall business growth.

5. Churn Rate

Measuring churn rate helps you gauge customer dissatisfaction. The lack of satisfaction can be either due to your product or service, or after service/ follow-ups. When you aim to generate revenue from returning customers, measuring this metric can be helpful to drive positive customer experiences.

Here’s how you calculate churn rate:

Wrapping Up

Your ability to track the right metrics will unlock the boundless potential of your tailored marketing campaigns. As you measure your cycling performance to improve in the next race, you must measure your personalization success with the help of these metrics to be able to generate more revenue in the future from such campaigns.

We wish you all the best.

 

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