Online shoppers have countless brands vying for their attention. Whatever particular product they’re looking for, there’s likely to be dozens if not hundreds of choices at their fingertips.
This means that customers are becoming increasingly frustrated when they’re overwhelmed by options and unable to find the right product at the right price.
And this massive selection isn’t exactly conducive to brand loyalty. If a company fails to deliver the product they’re looking for, they’ll simply look elsewhere.
To combat this issue, more and more brands are implementing hyper-personalization initiatives which lead prospects to the right product time and time again.
And most are having great success. A recent study by Evergage even found that 88 percent of marketers experienced measured improvements due to personalization, with more than half reporting a lift greater than 10 percent.
So it’s obvious that it’s having an impact. But in order to justify your efforts, it’s essential to know just how big of an impact hyper-personalization is having.
To do so, you’ll want to examine seven key metrics.
1. Bounce rate
Bounce rate is defined as the percentage of visitors who navigate away from your site after viewing only one page. As ConversionXL explains, “In its most basic sense, a bounce rate represents the percentage of visitors who enter your site and then leave, as opposed to staying and interacting with it in a meaningful way.”
While a high bounce rate isn’t always bad (in some cases it simply means that visitors have swiftly found a solution to their problem and bounced happily), it’s not something you usually want. That’s because it indicates that a sizable chunk of visitors aren’t engaging with your site and are therefore unlikely to convert.
Implementing hyper-personalization techniques should effectively lower your bounce rate. After all, the idea is that providing relevant, customized content should encourage site exploration and motivate visitors to look beyond the first page they land on. So ideally, your site’s bounce rate will decrease after using hyper-personalization.
If you’re looking for specific benchmarks, HubSpot offers some concrete data so that you’ll know how your site stacks up:
- Content websites – 40 – 60 percent
- Lead generation – 30 – 50 percent
- Blogs – 70 – 98 percent
- Retail sites – 20 – 40 percent
- Service sites – 10 – 30 percent
- Landing pages – 70 – 90 percent
Keep in mind that these numbers won’t apply to every single brand across the board, but they should give you a rough idea of how your site compares.
2. Average session duration
This simply means the average length of time that visitors spend on your site. By providing a superior level of customization and targeted products, offers and promotions, the expectation is that the average session duration will increase over time.
This indicates that visitors are responding favorably to your strategy and that they’re hanging around for long. However, if your average sessions duration stays the same or drops after personalizing aspects of your site, you’ll need to make additional tweaks or rethink your strategy.
3. Pages per session
This refers to the average number of pages that visitors are viewing while on your site. Like average session duration, you’ll want to see an increase in this number as well. After all, the more pages per session means a higher level of engagement and that visitors are exploring more of your site.
Note that the unofficial industry standard benchmark is two pages per session according to Spinutech. If you find that the number is considerably higher on your site after using hyper-personalization techniques, you can pretty much guarantee that it’s having a positive impact.
4. Average order value
One particular way that brands optimize the customer experience is by offering recommendations, which typically revolve around examining action based segments such as interest level and spending patterns. Amazon is the master of this, and recommendations are a big reason why it’s the world’s number one E-commerce platform.
By examining key visitor data, you can provide relevant recommendations. In turn, this often translates into:
- Increased shopper engagement
- A better shopping experience
- More purchases
The end result is shoppers purchasing a higher volume of items and increased recommendation revenues—something that wouldn’t exist without personalization. When done correctly this means a higher average order value (AOV).
So if you’ll want to pay close attention to your AOV before and after using hyper-personalization. Ideally, it will grow considerably.
5. Shopping Cart Abandonment
Online shoppers are a fickle bunch. Research has found that nearly 7 in 10 (68.53 percent) customers will abandon their shopping cart without completing a transaction. That’s an alarmingly high number and means squandered opportunities for many companies.
So what are the main reasons for shopping cart abandonment?
Here are some of the major ones according to Business Insider:
- Shipping costs made the total purchase more than expected – 58 percent
- Customers not ready to purchase but wanted to get an idea of the total cost of shipping for comparison against other sites – 57 percent
- Customers not ready to purchase and wanted to save the cart for later – 55 percent
- Order value wasn’t large enough to qualify for free shipping – 50 percent
By looking at these reasons, it’s clear that they’re primarily financial in nature. Therefore, it’s reasonable to assume that if offered some type of discount or promotion, a decent percentage of shoppers would be compelled to go through with the order and complete their transaction.
And that’s exactly what many online sellers use hyper-personalization for. By tracking a customer’s behavior, you can often salvage sales by presenting them with discounts for any products they have abandoned or by providing some type of incentive to complete the transaction (e.g. offering free shipping).
If you use this strategy, you should see a gradual decline in shopping cart abandonment, meaning that your efforts are working. So pay close attention to what your site’s shopping cart abandonment is like in the following months.
6. Offer conversion rate
The conversion rate is a vital metric and something that nearly all brands work tirelessly to increase. When it comes to measuring hyper-personalization success, you’ll want to look at one specific type of conversion rate—the percentage of customers who redeem offers that were specifically made for them.
Here’s an example:
Say that you run an E-commerce business that sells outdoor gear, and a visitor spent a significant amount of time looking at a particular sleeping bag but didn’t actually purchase it during their first visit. So on the second visit, you offer them a 15 percent discount on the exact sleeping bag they previously viewed.
If this spurred them into buying the second time around, that would count as a conversion. When you examine your offer conversion rate on the macro-scale, this should indicate what your overall level of personalization success is.
7. Customer lifetime value
Optimove defines customer lifetime value (CLV) as, “The total amount of money that a customer will spend from acquisition through the end of the relationship.”
In terms of calculating CLV, “It’s the average order total multiplied by the average number of purchases in a year multiplied by average retention time in years.”
Ideally, hyper-personalization will increase the CLV by better understanding customer behavior and then providing the best experience possible. Not only does this increase the odds of a person making an initial purchase, but it should also improve the odds that they return to buy again and again. This, of course, translates into deeper customer loyalty.
So seeing an increase in your CLV should mean that your hyper-personalization strategies are paying off.
Measuring your success
Hyper-personalization is the ultimate win-win. Customers can enjoy a more streamlined shopping experience and have access to the products and personalized promotions that interest them without having to meticulously browse through a website.
From a brand’s perspective, they’re able to increase revenue, while establishing more loyal customers—something that’s incredibly important in this day and age.
And the tools for personalizing that are out there are evolving each and every day. It’s simply a matter of putting them to use and properly executing.
The seven metrics outlined here will let you know if your hyper-personalization efforts are working, and if so how well they’re working. This should ultimately help shape your future strategies and tell you if anything currently needs tweaking.
Can you think of any other key metrics that can help you understand how well your hyper-personalization efforts are working? Please let us know: