Artificial intelligence and personalization won’t save you (sorry).
on 12.09.2022 by Dr. Marco Linz
Why it makes more sense to give conversion optimization the attention it deserves.
Over the past few months, growing numbers of customers have contacted us at FELD M with questions like, “We bought a leading digital marketing suite that has AI components and want to personalize now. What cases do you suggest without having seen our data?”
While making digital marketing as user-centered as possible is, of course, fundamentally the right idea, these questions often ignore the central levers and “low-hanging fruit” that can usually be implemented at the (potential) customer companies on a very short-term basis. Before you think about highly complex topics like personalization using AI and corresponding technology decisions, we can say from experience that it’s worth asking yourself the following questions:
1. What is the conversion rate within my main funnel? At which points are users currently dropping out and for what reasons?
These simple questions often lead to very enlightening insights: either the main conversion path is not yet (fully) measurable or the data have not been looked at in enough detail. If the onsite conversion rate is low at between 3% and 5% on average, as in most cases in eCommerce, and the bounce rates in the online marketing channels are high at >20%, personalization is obviously not the lever to prioritize.
There are often trivial reasons behind these bounces on your site, such as:
- Technical errors
- Display issues
- Cognitive or psychological conversion killers
- Display of advertising material in the wrong environments etc.
Completely independent of the specifics of your individual users, these hurdles prevent conversions in your shop or on your site across the board – and it makes sense to clear them first.
If your analysis shows that one of the main customer segments has a particularly high bounce rate at one point on the conversion path, it makes sense to ask yourself the following question:
2. Can a segment-specific design in the form of individualization or even 1:1 personalization reduce the bounce rate?
This question can only be answered with a clear “yes” if you have sufficient traffic in your user segments, especially on the lower page levels (product category and detail pages, service areas etc.). In addition, it is absolutely essential that the discriminating characteristics of the user segments or of individual users are technically recorded and available for individualization or personalization. The last point in particular often poses major hurdles, raising the question:
3. Is the required information (technically) available in time?
The crucial point here is whether the triggers for an individualized or personalized display are available at the right time and in the right form for a technical personalization solution. What initially sounds trivial often becomes a major deal-breaker.
If you currently have a return visit rate of less than two visits on average, the matter of individualization over several sessions has resolved itself, since the user simply does not visit the site a second time in a large number of cases. The option remains to personalize your site for your users within a visit or session. However, if the personalization solution needs e.g. 24 hours to determine which user belongs to which segment, the tool is simply unsuitable for your needs. Instead, a solution that allows segment allocation in near-real time would be the right choice.
Still, it depends a lot on what the specific case looks like. If you can only technically individualize or personalize on the next page, it is necessary for the user to trigger at least one second page view per session.
If these requirements are met, there is one last question to be answered, which is often underestimated:
4. Is my organization able to provide up-to-date individualized or personalized content or products in the required quantity within a given timeframe?
Phew, now what kind of question is that? Well, if your product itself cannot be individualized or personalized, you only have the content, the sales/consumption process or the user approach in general for an individualization or personalization of your site. Large corporations in particular quickly reach their capacity and compliance limits here.
Let’s imagine a two-product company that wants to address four relevant target groups individually via three marketing channels with corresponding ads (SEA, display, Facebook). The duration of the campaigns is one month on average and each campaign is accompanied by a landing page (i.e. 12 landing pages per year). For the time being, we refrain from individualization in the subsequent onsite checkout funnel. This means that this company must produce a maximum of 288 content pieces a year.
Even large organizations often lack the capacity for content creation or (legal) review and approval. This alone renders extensive individualization or personalization of the shopping experience fundamentally impossible.
In summary, we can say that individualization or personalization only makes sense if certain conditions are met.
Does this sound like a lot to consider? Would you like support in finding out if personalization makes sense for you and where you might miss low hanging fruit in your conversion funnel? We look forward to your message: email@example.com!