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Evaluating the ROI of personalization

March 21st 2023

By Scott Humphrey

Solutions Consultant

Personalization is critical to converting more shoppers, growing customer loyalty, and staying relevant with your audience.

In fact, on average our retail customers see a 17.6% increase in website conversion rates throughout the first 12 months of implementing triggered messaging and personalization tactics, and a 14.6% increase in AOV. Our clients also see a 28% sales uplift from triggered messaging and personalization. (See our real-time marketing report for more stats.)

But in order to justify the business case for personalization to your organization and reap the growth opportunities, you need an understanding of how to evaluate the ROI.

In this blog post, we’ll outline the standard calculations we make to demonstrate the ROI generated by Fresh Relevance personalization platform, covering data capture, triggered emails, email personalization and web personalization.

It’s worth noting that these are the standard calculations we make but we can also work with other attribution models and be flexible depending on each business’s needs.

We’ll also share some examples from businesses who have driven ROI through personalization.

ROI of personalization – calculations

Data capture

Email value per customer = revenue from email / no. of customers in email database

Value of new sign-ups = no. of email sign-ups x email value per customer

Visitor to subscriber rate = Number of new sign-ups to your email database (last year) / number of unique visitors to your site (last year)

Triggered emails

Revenue from triggers = no. of cart abandonments x cart ID rate x conversion rate x AOV

NB:

  • Cart abandonments count as sessions where a customer adds to cart but doesn’t transact
  • AOV (average order value) is of those clicking through from triggered emails
  • Cart ID rate is % of abandoned carts that trigger an abandonment email

Email personalization

Revenue from BAU emails = no. of emails sent x CTR x conversion rate x AOV

NB:

BAU = business as usual
CTR = click through rate

Web personalization

No. of transactions = no. of sessions x conversion rate

Revenue = no. of transactions x AOV

Real results

redtag.ca

Online travel agency redtag.ca implemented multi-stage cart abandonment emails to win back and convert customers who had already browsed their website. redtag.ca has seen a 10% increase in booking abandonment revenue QoQ. The company has also seen a 7.9% sales uplift and a 5% increase in AOV with booking abandonment emails, browse abandonment emails and personalized web content.

“The initial issue for us was getting budget, because we were coming out of a difficult time during Covid-19. But we’ve seen 129X ROI with Fresh Relevance, and so have been able to invest more in using the platform,” says Roberto Gennaro, Chief Digital Officer, redtag.ca

Read redtag.ca’s success story

Look Fabulous Forever

Online make-up retailer Look Fabulous Forever implemented personalized product recommendations and cart and browse abandonment emails to help improve the customer experience.

“We’ve seen more than 10x ROI in the first few months of using Fresh Relevance.” Janis Thomas, eCommerce & Marketing Director, Look Fabulous Forever

Read Look Fabulous Forever’s success story

Final thoughts

If you’re looking to implement personalization into your marketing and want to learn more about evaluating ROI, book a demo and find out how Fresh Relevance can help your business.

By Scott Humphrey

Solutions Consultant

As Solutions Consultant at Fresh Relevance, Scott manages the demonstration environment and helps the wider team to find the best possible product solutions for our clients.