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Case Studies







What is the ROI of Personalisation?

When executed effectively, personalisation can overhaul the customer experience, boost key metrics and offer substantial commercial rewards. Here, we’re exploring the different ways in which personalisation can drive ROI for your ecommerce business.

Written By
Hannah Smiddy

Often hailed as the holy grail of ecommerce marketing, personalisation is a crucial tool for success in the digital age. 

Gone are the days of the one-size-fits-all approach. Now, consumers are more empowered than ever before when it comes to their relationships with brands – they call the shots. 

Today’s customers are demanding personalised ecommerce experiences tailored to their individual needs. In fact, 63% of consumers now expect personalisation as standard, and 74% of people hate being shown irrelevant content.

Dynamic Yield’s Channel and Alliances Director, James Fraser, and Swanky’s Head of Optimisation, Sean Clanchy, discuss the importance of relevant content in retail. Full personalisation webinar coming soon! CRO webinar available to watch now.

Alarmingly, many organisations are yet to fully explore the valuable opportunities offered by personalisation. If you haven’t considered personalising your brand experience, you’re missing a trick.

Done right, personalisation offers substantial rewards. It can help merchants deliver intricately tailored shopping experiences that make customers feel understood, valued and connected. This is a surefire way to boost engagement, brand loyalty and overall customer satisfaction

What’s more, these benefits to the consumer translate into significant commercial benefits for your business. Personalisation ensures you get value for money when it comes to marketing spend, helping you increase return for every pound, dollar or Euro spent. Indeed, research reveals that effectively executed personalisation can deliver five to eight times the ROI on marketing spend

And ROI can come quickly too. Personalisation famously paid off for Tottenham Hotspur football club, delivering positive ROI just 30 days after deployment of Dynamic Yield’s personalisation tech stack!

Let’s take a closer look at the ROI of personalisation.

Reduced acquisition costs

Acquiring new customers can be a painfully pricey process. Thus, reducing the costs of customer acquisition is a ceaseless mission for ecommerce merchants. 

Good news though. According to McKinsey, personalisation efforts can reduce acquisition costs by as much as 50%!

When you tailor content to an individual based on their behaviour and/or demographics, your message becomes much more persuasive. Users are much more likely to convert when delivered a personalised experience. And by boosting the amount of traffic that’s converted into paying customers, you can reduce the overall cost of acquiring new ones.

Personalisation also helps cut acquisition costs by improving customer retention. Delivering personalised, relevant content to your most valuable customers keeps them engaged and emotionally invested in your brand. They’re much more likely to keep coming back to your store if they feel like their needs are being recognised and acted upon. 

What’s more, these loyal customers are likely to actively spread the word about your brand, either by posting positive reviews on-site or recommending your products to friends and family. This is perfect for increasing your customer base without the skyhigh acquisition costs!

Increased email click-through rate

Including dynamic content in your emails is one of the most effective personalisation tactics to have in your marketing toolkit, boasting significant ROI.

Displaying real-time, personalised content (think names, targeted product recommendations, geo-targeted weather references) in emails is a smart way of increasing relevance and engagement. When uniquely-tailored, appealing content arrives in their inbox, customers are much more likely to click through to your site. In fact, some brands have recorded an 8x improvement on click-through rates when featuring a personalised video compared to standard, one-size-fits-all email content.

This higher CTR means a higher chance of purchase conversion, which in turn drives revenue. Not convinced? One study showed that organisations using email personalisation generate 17% more revenue through their campaigns than the average marketer! 

Increased average order values

Providing dynamic, targeted content across the customer journey is a smart tactic for increasing average order value (AOV). 

By harnessing data on customers’ on-site behaviours, past purchases and interests, you can recommend relevant products that will pique the interest of your shoppers. These intelligent cross-selling and upselling tactics can increase how much a customer will spend with you in one transaction.

For example, APMEX, the world’s largest online retailer of precious metals, saw a 20% increase in AOV by serving targeted product recommendations widgets based on customers’ metal preference and coin-affinity. Using valuable data insights from a range of platforms, they were able to assign unique experiences to different segments and optimise product discovery accordingly.

Personalised content can also be used to increase customers’ confidence in product recommendations. Authentic customer reviews are a persuasive form of social proof. They build trust, aid purchase decisions and compel buying action. Choosing to display reviews that will most resonate with a customer’s unique persona can increase effectiveness and push them towards that all-important completed checkout. For instance, if a customer’s past purchase behaviour relied on product quality, showing them specific reviews based around this particular concern will increase the likelihood of a cross-sell purchase.

Increase customer lifetime value

Not only can personalisation get people onto your store and adding more to their basket, it can encourage them to come back again and again. 

Ensuring that your customers receive a personal, memorable experience right from your first interaction through to the moment their product arrives, will increase satisfaction and loyalty. 44% of consumers say they’ll likely repeat buy after a personalised shopping experience, which is why personalisation is one of the main tactics used to increase customer lifetime value (CLTV).

Through Swanky’s work with a fast-growing Shopify Plus fashion retailer, we’ve seen the incredible effect that personalising the loyalty experience can have on CLTV. Our very own CRO expert, Sean Clanchy, explains more:

Accelerated revenue growth

Personalisation drives big results. All of the benefits we’ve talked through above contribute to a tangible uplift in sales. 

There’s a sea of striking stats out there showing the positive impact that personalisation can have on revenue. For instance, according to McKinsey, the use of personalised communications within retail can drive revenue growth of 10-30%

Boutique bath and body retailer Sabon actually maximised sales by even more than this during a Black Friday weekend. By showing visitors personalised homepage offers and leveraging real-time insights, they managed to boost sales by 35% during the biggest shopping event of the year.

What’s more, by 2022, personalisation is expected to push a revenue shift of $800 billion to the 15% of companies that get it right.

The personalisation payoff

When done right, personalisation can transform the customer experience, improve key metrics and boost overall profitability. Brands that create, harness and leverage relevance can enjoy what’s known as the ‘personalisation payoff’.

Your business wins with increased ROI, whilst your customers win with better, richer experiences that make them feel special. 

Personalisation tools for your Shopify store

When it comes to personalising customer experiences on your Shopify store, Dynamic Yield’s personalisation technology stack makes it easy to offer an end-to-end custom experience for your shoppers

Using an advanced customer segmentation engine, which is driven by machine learning, you can implement personalised recommendations, automatic optimisation and real-time messaging. The Dynamic Yield app allows you to provide an optimal customer experience across several channels – catering for consumers’ growing desire for seamless omnichannel personalisation, and delivering benefits to your bottom line.

James Fraser explains how Dynamic Yield can benefit Shopify merchants.

Dynamic Yield are a Shopify Plus Technology Partner, and one of Swanky’s certified solution partners too. They have worked with some of the largest brands on Shopify, including Chubbies and MVMT, to power consistent shopping experiences, increase customer loyalty and drive revenue.

Find out more

Want to know more about how Swanky and Dynamic Yield can transform your ecommerce store and accelerate digital growth? Get the inside story on conversion rate optimisation in our exclusive webinar with Director of Swanky Australia and long-time optimisation expert, Sean Clanchy, and Dynamic Yield’s Channel and Alliances Director, James Fraser. Watch now.

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