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Imagine yourself going on a diet. You make a detailed diet plan with your daily calorie intake. As you follow the plan over time, you also purchase all the right foods and equipment. Afterward, you'll surely measure your weight loss progress by tracking the pounds and inches you've lost.
Similarly, when companies employ personalization strategies to create an enjoyable shopping experience, they need to be able to measure the success of their efforts by calculating certain website personalization metrics.
If you’re looking for the best metrics to track, keep on reading ahead.
9 key metrics to measure the success of your personalization program
1. Visitor engagement rate
Visitor engagement rate tracks the level of interactions customers have with a piece of content on your website. These can be by filling out a form, clicking on a call to action button, or simply spending a certain time on your website.
You can calculate this rate by using the following formula:
Engagement rate (ER)= (Total engagements / Total impressions) * 100
Since it shows how well your website audience is engaging, it is a good metric to evaluate the success of your website's personalization efforts and gather customer data about user behavior for identifying trends.
2. Click-through rate
Click-through rate (CTR) shows the number of clicks on your calls to action during a certain time period. Use the below formula to calculate it:
Click-through rate (CTR) = (Total clicks / Total impressions) * 100
CTR can generally be improved by making your website content more visually striking and relevant to persuade your target audience to click. Study your audience to determine which content type (videos, carousels, GIFs, etc.) they prefer, place a personalized call to action button, and get ready to witness an increase in clicks.
3. Conversion rate
Another important metric to track the performance of website personalization efforts is to calculate the conversion rate. Conversion rate measures the percentage of customers that converted by completing a desired action, say, installing an app or making a purchase.
It can be calculated using the following formula:
Conversion rate = (Total conversions / Total site visitors) * 100
A high conversion rate is indicative of successful personalization and marketing strategies because it shows that the customers are liking what you are offering. The conversion rates for different strategies can be tracked to compare which personalization efforts worked best in grabbing and materializing customer attention.
4. Change in average order value
Average Order Value(AOV) tracks the average amount customers spend every time they place an order on the website. It can be calculated as follows:
Average order value (AOV) = Total revenue / Total orders
A change in average order value gives useful insight into how different marketing and pricing strategies influence customers' behavior resulting in an increase/decrease in average sales.
5. Revenue per visit
This performance metric measures the average amount of revenue generated every time a customer visits the website. It can be calculated using the formula:
Revenue per visit = Total Revenue / Total visits
Revenue per visit measures the actual value of each website visitor. It is an important metric to keep track of as it depicts the long-term health of your website, and therefore, shows the success of your personalization strategies. A personalized website catering to the needs of each unique visitor is likely to result in a higher RPV.
6. Shopping cart abandonment rate
As the name implies, this rate shows the percentage of shoppers who fill out items in the shopping carts but leave the website without checking out. It is an important metric to track overtime because it shows the lost revenue. A company providing zero personalized experiences as compared to its competitors is likely to have a higher cart abandonment rate.
The cart abandonment rate can be calculated as follows:
Shopping cart abandonment rate = (Completed purchases / Shopping carts created) * 100
7. Customer lifetime value
Customer lifetime value is another website personalization metric that calculates the total revenue that an organization earns from the customer throughout their relationship. This is calculated using the following formula:
Customer lifetime value (CLV) = Customer value * Average customer lifespan
Where customer value is Average purchase value * Average number of purchases
This is a very important metric as it allows companies to use this predicted customer value to evaluate and improve customer loyalty, customer support services and help retain existing and loyal customers. Furthermore, companies can use CLV to distinguish different customer segments and focus on the segments that add more value.
A personalized and enjoyable shopping experience is bound to increase customer loyalty and satisfaction and thereby, increase the average customer lifespan as the customer is likely to return back to the website for future purchases and recommend it to others.
8. Churn rate
The churn rate measures the percentage of existing customers that cease being customers over the course of time. In the case of SaaS organizations, the churn rate calculates the percentage of customers that cancel their subscriptions or do not renew them over a fixed time period.
Use the below formula to calculate it:
Churn rate = (Total lost customers / Total customers at the start of a period) * 100
A failed personalization program will cause more customers to discontinue their relationship with your organization, and shift to competitors. Hence, increasing the churn rate.
9. Return on investment
Return on investment measures the profitability of any investment and can be calculated using the below formula:
Return on investment (ROI) = (Total investment / Total cost of investment) * 100
A higher ROI after the implementation of any personalization program is indicative of its success as it managed to improve customer experience, boosting revenue. Similarly, if the ROI did not improve after the execution of the personalization campaign then it shows that it failed to achieve its targets and increase revenue.
Best practices for analyzing the success of your personalization efforts
Before you start tracking these important metrics, it’s always helpful to follow some industry best practices.
Track the metrics consistent with website personalization goals
Before diving straight into calculating the metrics, it is important to review the website personalization goals and then align the metrics accordingly.
For example, if the main aim of the personalization campaign was to increase customer loyalty, then the relevant metrics to judge and analyze the performance would be customer lifetime value, churn rate, and conversion rate.
However, if one of the main goals of the personalization strategy was to boost revenue then suitable metrics to gauge performance would be average order value, revenue per visit, and return on investment.
Choose the right tool for the job
You’ll have a rough time if you export all customer data into a spreadsheet and calculate these metrics manually. While there is nothing wrong with this approach, it’s time-consuming and prone to errors.
There are many data analytics software out there to help you automatically calculate website personalization metrics. Google Analytics is a free tool with tons of valuable insights. If you’re not a beginner, then Mixpanel and Amplitude are good tools to give a try.
Use segmentation for a granular view of personalization success
To truly evaluate the success of your personalization campaign, you need to dive deep. In other words, track the success metrics of different segments.
Is the return on investment greater for young adults as opposed to students? Do females have a higher average order value than men? Such insights will help you prioritize your efforts and help you achieve maximum revenue and engagement.
Test and iterate continuously
Testing and driving insights from them is a tedious task. Too much data can seem overwhelming to the extent that nothing makes sense. It’s important here to stay on track and start with a few vital metrics.
You may also want to explore different tools to find the most user-friendly one. Once you have a firm grasp on the few critical metrics, track other KPIs for a better understanding of how website personalization strategies are performing.
Conclusion
This concluded our list of the best website personalization metrics you must be tracking.
If you’re looking for a robust tool to create tailored customer experiences, Relevic is a good choice. With Relevic, you can run multiple personalization campaigns and that too, for different segments. Try it for free today.
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