Personalization: Engagement, Revenue and Where the Market is HeadedSep 11, 2014 - by Cassie Young
I consider myself a next-level analytics nerd: I would run through walls to get fellow marketers measuring and modeling the impact of their optimization decisions and understanding how those decisions play out in terms of growth potential, scale, and solvency. It should go without saying that I was ecstatic to join Sailthru 18 months ago to head our optimization and analytics department, as this opportunity affords me the chance to partner with a host of amazingly talented B2C marketers to optimize and grow their programs. I’m lucky to say that I do what I love most every day at work; it’s incredibly invigorating to see the impact of our products and advice on our clients’ successes each and every day. That said, though we have our own toolkit for measuring our ongoing impact to clients, we all need a little outside validation every now and again. It’s for this reason that we called on Forrester Consulting to corroborate many of the results we’ve been seeing and to contextualize that impact in terms of the broader business P&L.
In particular, we partnered with Forrester to debunk the myth that omnichannel personalization is a blue sky vision that’s not achievable or feasible (or worse yet, financially worthwhile when the investment is considered); our team at Sailthru clearly has infectious enthusiasm and conviction for omnichannel personalization, but we’ve still seen resistance in the market. More specifically, we sought to evaluate our impact – fiscal, technical and strategic – on one particular ecommerce client, and the Forrester Total Economic Impact (“TEI”) study emerged as the perfect avenue to do so. How it works? One of Forrester’s analysts extensively interviewed the marketing team at this client and dug deep into their numbers both pre- and post-Sailthru. The output was a look at the entire ROI equation for the client’s build vs. buy decision, and we’re excited to share the results.
According to Forrester’s findings, after implementing Sailthru our client, a $75MM ecommerce company, not only realized substantial incremental revenue but also a noted an impressively speedy return on investment for our solution – less than one month!
Diving deeper into the lift, we learned that our client not only improved the average order value (AOV) of all purchases with our personalized approach, but also materially increased the propensity of retaining customers after their initial purchase, mitigating the classic “one-and-done” problem that haunts so many ecommerce marketers.
Many marketers out there still obsess over opens and clicks; personalization no doubt drives lift in these metrics, but at Sailthru we are less focused on these short-term volume measures and more focused on conversions both today and tomorrow; in particular, we seek to understand how personalization plays out longitudinally over time (just because you convert them with a discount today, do they ever come back?), so we were thrilled to confirm that the client’s lift persisted well into the customer lifecycle.
The client at hand has made a commitment to personalization as a top marketing priority, and the results have been fruitful. At this point, their curation decisions are automatically informed by the data from individual users’ viewing habits, previous purchases and online interactions with the brand. Sailthru combines this explicit behavioral data with both implicit interest data (our proprietary “Horizon” interest scores) as well as hundreds of custom variables the client passes us, ranging from acquisition source to net promoter score (NPS) to create a single customer view that is highly actionable for the client. Our 360-degree profiles and multi-channel approach actually empowered this client to replace three different vendors with the roll-out of Sailthru: a market-leading legacy email service provider reliant on rules-based personalization (simply not scalable), homegrown recommendations engine and an ad hoc team devoting hours to manual analytics and cohort analysis.
The client has fundamentally transformed its marketing operations. Instead of spending hours in the weeds building campaigns or stitching together data sets in Access or Excel, they have automated workflows that allow them to focus their time on the most strategic and analytical activities. They are also leveraging Sailthru’s omnichannel suite to target the right users in the right channels at the right time – whether it be in email, on site, or even off-site on Facebook via Sailthru’s custom audience plug-in. We know that the transition to new systems and processes is not always an easy one, and true 1:1 personalization (more than just “dear <first name>”) is a hefty undertaking, but the analysis in this study will showcase just how worthwhile the investment can prove. From my seat as an advisor to so many ecommerce companies, multi-channel personalization – which commands the 360-degree user profiles I alluded to earlier – is absolutely where the market is headed, so I encourage all marketers to get on board.
For marketers that are considering making the investment in omnichannel and 1:1, it’s surely important to approach the decision as you would any “buy vs. build” scenario, but if you opt to partner, it’s also imperative to select a purpose-built vendor: do you share the same vision? Do you measure success in the same way? When you are aligned with your vendor on where the market is going, which metrics matter most, etc. you are poised for the best possible partnership and ROI. My own vision – an obsession for the longer term and lifetime value – lined up so nicely with Sailthru when I was on the client side, and is ultimately what prompted me to leave my post as a client to join the Sailthru ranks and share this conviction with so many other forward-thinking marketers around the world.
— Cassie Lancellotti-Young, VP of Analytics & Optimization at Sailthru