Personalization has been proven to increase online revenue, average order value and customer retention. To understand how third-party personalization software directly affects sales, Quba has recently undertaken a research project and published its findings.
According to industry standards referenced in the research, growing retailers can achieve a 5% increase in average order value and 10% increase in conversion rate by using third party personalization providers. With the release of these benchmark figures, marketers are prioritizing personalization with 1/3 stating personalisation is the one capability that will be most important to marketing in the future.
However, studies have shown that 60% of marketers still struggle to personalize content in real-time with 32% citing a lack of relevant technology as a key challenge. Quba’s research promises to ‘cut through all the blurb’, to help retailers and marketers to truly understand the metric value associated with personalisation software.
The study is based on a growing online retailer with the following annual metrics:
• 168,000 page views
• £2m in revenue
• £30 average order value
• 3% conversion rate
• 25% margin
Utilizing these metrics, the study showcases a growth table. For ease, the statistics take into account ‘flat-lining’ any seasonal business statistics which could get a better gauge on calculating the potential costs.
Furthermore, the research has analyzed the benchmark results against subscription costs of leading personalization software, PureClarity, and has calculated a 1066.7% return on investment over the first 12 months.
The study follows on to explain that while third party software cost is an important factor when selecting a personalized provider, there are many other important aspects and the decision shouldn’t be dictated by price alone. Additional factors cited include simplicity of the system, scope of the system (personalized email campaigns, cart abandonment emails) and level of support given.