30-second summary:
Budgets are under even more pressure than usual so it’s important to target tech investment where it will quickly achieve bottom-line impact and ROI.
98% of consumers leave websites without converting – addressing this dire statistic is key to digital success.
Personalization and experimentation will help and models such as Forrester Consulting’s Total Economic Impact (TEI) will identify the costs, benefits, and risk factors to ensure the outlay is worth it.
Every business aims to be customer-centric but, in reality, there’s a wide difference between the best and the worst. The move to a digital-first world has been accelerated by the pandemic and over the last few months, even the most established bricks and mortar stores with solid offline revenues have had to switch to a new world of ecommerce and digital channels.
With more and more firms competing for the same revenues this all means that delivering the right experience online has never been more important. This should be good news for marketers, but with their budgets under serious pressure it has never been more important to target tech investment where it will quickly achieve bottom-line impact and ROI.
Building a benefits-first business case
When every dollar of spend is heavily scrutinized, getting buy in from senior management is key. Bear in mind that many don’t have a deep knowledge of marketing, and are focused on the bottom line, so make sure you are explaining your investment case in terms of benefits they will understand such as conversions, revenues, and higher margins.
Start with the stark headline figure – 98% of consumers leave websites without converting, meaning that firms miss out on large-scale digital revenues and profits. Minimizing dropouts and boosting conversions relies on delivering the right consumer experience to each and every visitor to your site.
How experimentation and personalization boost the bottom line
Experimentation and personalization give you the ability to provide this optimized experience. Experimentation lets you test new ideas for your digital presence, from text, layout, and CTAs to more complex changes to the customer journey or even entirely new products or services. This allows you to improve the experience for everyone and consequently outpace the competition.
Personalization is arguably even more important, allowing you to tailor the experience, content, and messages that visitors receive based on their behavior and other targeting criteria to provide them with a completely individual experience. This increases visitor engagement and conversion rates, as well as in increasing lead generation and reducing churn.
For instance, Accenture found that 91% of consumers would be more likely to buy from a brand if it identifies, recognizes and offers them personalized content and promotions. They’re also likely to increase their spend too – research from Boston Consulting Group found that 40% of consumers bought more than they originally planned when visiting websites that were highly personalized.
Collecting the evidence for investment
One of the more persuasive arguments for convincing senior management of the need for better personalization and experimentation strategies is the fact that it is now established best practice. Some 75% of websites that have over one million annual visitors run A/B tests to improve the overall user experience. If you’re not doing it, your rivals will be.
In one of its studies, Gartner estimates that companies that have invested in online personalization will earn 30% more income than rivals. The same report suggests that brands which have adopted personalization early have had time to create a new organizational structure and to gain optimization skills that benefit their competitiveness.
Personalization can also save money on customer acquisition. Research published in Harvard Business Review found that personalization enables companies to reduce acquisition costs by 50%, increase income by 5%-15% and improve the efficiency of marketing spend by 10%-30%.
Prove your case with a recognizable methodology
Once you’ve outlined the benefits you think your experimentation or personalization project can deliver, you need to prove it for your brand and situation.
One way to achieve this is to base your calculations on a recognizable methodology, such as Forrester Consulting’s Total Economic Impact (TEI) approach. This uses a rigorous framework to identify the costs, benefits, and risk factors around a technology investment.
As it places equal weight on total costs and total returns it allows you to carry out a full examination of the effect of the technology on the entire organization.
The beauty of the TEI approach is that you can easily apply it to your own brand in a real-world scenario. Look at your business objectives, such as increasing sales, boosting cross-selling, improving efficiency, and growing margins. Then compare yourself to the example companies in available studies.
This will enable you to put a number on both the quantifiable benefits of new technology investment, and intangible ones, such as greater customer engagement or happier employees.
Sealing the deal – convincing your boss
Now that you have the gathered the evidence for investment you have to overcome any objections that management might raise. One is about the resources you’ll need to commit above and beyond spend on technology.
That means looking at the skills you have in-house, how you can boost them, either with new hires or external agency support, and what this will cost. Take the time to educate stakeholders about the process and any impact on the wider organization to get them on-side.
And of course, once the project is secured this process does not end. It’s therefore vital to identify ‘quick wins’ and show the ROI from them whilst keeping senior management in the loop. This not only reassures them that they were right to back the project but also helps unlock more investment.
We’ve all seen the diagrams – there have never been so many tools available to marketers. This can cause confusion and make it difficult to decide between them, particularly when it comes to your next investment.
Focus on tools that can deliver proven benefits, such as experimentation and personalization solutions, and put together a clear case, based on independent methodologies. This will ensure you unlock budgets, deliver ROI and extend and scale your programs.
Jean-René Boidron is CEO of Kameleoon, a full stack personalization technology platform for real-time omnichannel optimization and conversion. Jean-René has over 20 years of international experience in the digital and software industries. In three years, he has transformed Kameleoon from a pioneer in online conversion optimization into a leader in personalization.
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