The Science of Personalization: Guess, but Test
Not long ago I worked with a stomach-driven organization. A stomach-driven marketing organization starts the day with a guess. Red! Make all the pages red, customers will buy! The team scrambles, the pages are red. No buying? It’s the weather. Lots of buying? It’s the red.
Being stomach-driven worked when your competitors were also stomach-driven. All you needed to succeed was the luckiest stomach.
But your competition today is using testing, optimization, analytics, data-driven marketing. They test their way to success, and they don’t stop testing until they don’t need to succeed (and that would be never).
If your organization is guessing its way to success, add a little science and your results will be vastly better.
The Scientific Method:
1. Formulate a hypothesis (ie, make your best guess)
2. Test it
3. Draw conclusions
4. Return to step 1
This is a well-tested (centuries-old) approach to gaining knowledge, and it is also a well-tested approach to improving (aka optimizing) your marketing results.
It is not that hard to get started.
Today, you can use cloud-based services to experiment with, and improve, every aspect of your customer experiences and marketing. This activity is often called optimization, or testing. It is how you find and apply the best messages, page design, recommendation tactics, landing pages, display ads, call center scripts. Business people, analysts, and optimization experts identify opportunities to improve marketing or customer experience results. Stakeholders brain-storm improvements, then test the alternatives with a subset of visitors. Web analytics tools will measure the response. The team picks the winner – and then kicks off the next experiment. And the next. And the next.
The benefits of data-driven vs. stomach-driven approaches are almost unbelievable. I’ve talked with two organizations that calculate the return on optimization expenditures at more than 1,000:1. For every dollar spent, their organizations reap more than $1,000 in revenues or cost savings.
Building an optimization program is worth the effort. While it isn’t hard to get started with testing, it isn’t exactly easy to rearrange the organization to run a proficient optimization program. You’ll need to invest in skills, commitment and practices, as well as tools, to be successful.
But make no mistake, the leaders have been investing for years. They report tangible ROI for their efforts. If you haven’t been investing, it’s time to start. The leaders have shown the way for everyone else, and the path is clear.