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Personalization strategy essentials

THIS ARTICLE WILL HELP YOU:

  • Discover actionable Audiences to target for personalization
  • Plan and launch Campaigns that impact your key business metrics
  • Interpret and take action based on your results

Personalization is a powerful way to communicate empathically with your customers and tailor your business to their particular needs. A personalization strategy allows you to identify segments of visitors with distinct preferences or needs, then create targeted experiences for them.

This article provides a high level overview of the strategic decisions you’ll make when using Optimizely Personalization.

 

TIP:

Just getting started on your personalization strategy? Here are a couple of questions you may want to consider first: 

  • What key metrics do I want to influence? 
  • What's audience segmentation and why is it important to leverage the data that I gather on my customers? Read this blog post to learn more about turning your analytics into a personalization strategy.

Research shows that U.S. customers expect a personalized retail experience. Read more about their expectations in this study.

Discover audiences

Audiences are groups of customers you’d like to deliver a targeted experience to. Conceptually, an audience is simply a group of visitors to your site who have something in common. The first step in developing an effective personalization strategy is to discover actionable audiences. 

What is an "actionable" Audience?

Audiences are only "good" if they’re actionable. Two characteristics determine how actionable an Audience is:

  1. Impact: Is this Audience shaped by the qualitative and quantitative intelligence that drives your business strategy? Is there a clear message that you’d like to tell this group? Is the reach of this Audience a substantial percentage of your overall traffic? 
     
  2. Feasibility: Can you target this Audience using our available Audience conditions? Will you need to use an integration with a different part of your technology stack to access these technical attributes? We'll provide examples of technical attributes that you can target below.

To develop Audiences that are both impactful and feasible, drive your Audience discovery process with the qualitative (user personas) and quantitative (historical data) data that is fundamental to your business.

We'll describe both user personas and historical data below.

USER PERSONAS

persona is a qualitative description of a visitor to your website. It is a model that describes the needs, concerns, and context of that representative customer. This model directly informs the personalized messages that you'll deliver in your Campaigns.

Do you already have some personas built? You have a strong foundation for targetable Audiences. Your next step is to explore the technical feasibility of delivering personalized campaigns to those personas in Optimizely.

If you don't have personas yet, consider the following questions about visitors to your site. These questions will help you flesh out actionable audiences, based on a qualitative understanding of your customers:

  • What actions can a visitor take on your site that are valuable to your business? 
    This is the foundational question underlying all optimization. Define the business-critical behaviors that personalization will accelerate.
  • What are some of the motivations that drive visitors to complete those actions?
    Why do visitors take those actions? Break out the different rationales that visitors might have for completing key actions. Do these motivations align with different targeting conditions? Can you use these conditions to create an Audience definition? 
  • What level of familiarity with a brand, product, or service is required to complete a transaction?
    Is there some barrier of brand awareness, that the product or service is right, or simple comfort that comes from exposure that your audience needs? 
  • Do certain visitors exhibit a preference for a different kind of product or service? 
    The motivation to complete a transaction, and the messages you use to drive that motivation, might vary depending on the product, service, or action that your visitor prefers.
  • What signals indicate that a person might be ready to complete a transaction?
    Change your messaging and CTAs based on your customers' basic readiness to take action. 
     
  • How are a visitor's needs, experience, or expectations changed by previous experience with a competitor? 
    How would your message change if you knew that the individual has interacted with competing offerings?

Ultimately, personas should enable your creativity when designing campaigns. They clearly demarcate the various needs, wants, and contexts of visitors coming to your page.

In isolation, personas are a powerful tool for shaping strategic Audiences. By layering on insights gleaned from customer data, you’ll lay the foundations for a comprehensive Audience strategy.

ANALYZE CUSTOMER BEHAVIOR

Customer data is information about how visitors have behaved on your site in the past. This historical data includes results from exit surveys and user testing studies, transaction records of purchase recency and frequency, and actions that visitors take on your site. Evidence-based customer behavior complements the empathetic human factors that shape your user personas. You can use them separately or together to drive your Audience discovery.

The range of data available for Audience discovery may be immense, and potentially overwhelming. However, many of these data points aren't actionable. Here are a few questions to guide your efforts to unearth actionable data about your customers:

  • Are there drop-offs in your conversion funnel that are more severe for particular device types, campaign visitors, or verticals?
    One of the easiest ways to segment your visitors is by cross-referencing key behavioral performance reports, such as a funnel analysis, with basic factors like location, device type, media campaign, New vs. Returning, etc. This is an actionable opportunity to personalize your customers' experiences on your site.
  • Is there a cohort of visitors who you'd like to exclude from promotions based on the number of times they've already completed a transaction or other action (for example, 6 website visits or 3 purchases)
    Conversely, is there a cohort of relatively inactive visitors who you’d like to incentivize more aggressively? In the world of database marketing, Recency + Frequency + Monetary Value (RFM) is a proven axis where businesses can effectively target campaigns to customers. How can you design a site experience that takes advantage of these three data-points?
  • Is there a "magic number" of key behaviors that indicates that a visitor is likely to convert on your site? 
    For example, an Optimizely retail customer found that the number of times a visitor viewed the product category page to be a strong predictor of purchase intent. When a visitor views the product category page twice, she is much more likely to complete a purchase. That signal formed the foundation for a behavioral retargeting campaign that was highly effective at improving the site's conversion rate. In many verticals, Returning Visitors are much more likely to convert than New Visitors, who are seeing the site for the first time. 

By connecting data-driven insights (such as the fact that Returning Visitors are more likely to convert than New Visitors) with user personas (New Visitors are users who need to achieve familiarity with the site or brand before converting), you can customize messaging on your site to cater to those behaviors and expectations. In this example, we might show more educational content and CTAs for nurture campaigns to New Visitors, instead of messaging that prompts the final transaction.

 

TIP:

In Personalization, tracking components such as PagesTags, and Events are always-on. They constantly gather data about how the visitors who come to your website behave. When starting with Optimizely Personalization, make sure to set up a robust net of Pages, Events, and Tags, so the platform's ability to surface actionable Audiences is maximized. 

Concrete data about your visitors’ behavior is a perfect complement to the personas that model your most meaningful Audiences. Together, personas and historical data provide a thorough picture of who is coming to your site, how they behave, and what they might be looking for.

Your next step is to connect these insights to technically available visitor attributes so you can target them in Personalization.

TARGET TECHNICAL ATTRIBUTES

In general, your visitors can be identified through three types of attributes: behavioral, contextual, and demographic. Below, we discuss these attributes and provide some examples for you might for personalize to each.

Behavioral attributes

Behavioral attributes are groupings based on current or past behavior.

  • Search: What search terms tend to correlate with conversion events on your website? Are there important keywords that correspond to certain, important audiences?
    Strategy: Show content or a CTA that aligns well with the keywords you’ve identified.
  • Content: Are there certain types of content, formats, or products that your visitors viewed and abandoned? 
    Strategy: Show or reference that content to those visitors when they return your website a second time.  
  • Conversion abandonment: Did a certain segment of visitors enter the checkout funnel but abandon it before completing the process? 
    Strategy: Customize your site experience for those customers based on near-conversion behavior. You might welcome them back to your site and show them the product they almost purchased.

Contextual attributes

Contextual attributes describe the environment from which your visitors access your site, such as device, time of day, or promotional campaign.

  • DeviceIs a customer browsing your website from their phone? 
    Strategy: Consider providing a phone number for the customer to contact you or create opportunities for social sharing on mobile. 
  • Time of day: Have you noticed that on the weekend, your customers tend to spend more time browsing before making their purchase? 
    Strategy: Surface a broader variety of products for your weekend visitors, or present them with browsing categories that they’ve visited in the past.
  • Media campaign: Is your visitor clicking through from a certain promotional campaign?
    Strategy: Align some of the messaging on your landing page to that campaign.

Demographic attributes

Most demographic data is either integrated from your analytics platforms or inferred from your customers’ behaviors on your site. Demographic data can be highly actionable.

  • Location: Are your visitors in a certain metro area, in a rural versus an urban environment, or in a particular state? 
    Strategy: Personalize the messaging on your landing page or your product suggestions for audiences in those locations.
  • Age, gender, and income: Do you know from your data management platform or your analysis of visitor behaviors that a visitor is interested in a certain type of product, based on age, gender, or income level? 
    Strategy: Carefully adjust the messaging on your website to meet the expectations of those audiences.

By layering on the "qualitative" (persona), the "quantitative" (behavioral data), and the "what’s possible" (technical attributes), you will define highly actionable Audiences to deliver personalized Campaigns to.

Plan experiences

Now that you know who you’ll want to personalize experiences for, the next step in your personalization strategy is to determine what you want to say and where you want to say it.

To determine your messaging strategy, use the insights you developed in your Audience discovery process to decide how you’d like to communicate to each subset of visitors. Your personas and historical data should closely inform your messaging ideation. How is each Audience different? What is an Audience's needs, and when are those needs not being met in a “one size fits all" model?  Think through the different offers, value propositions, CTAs, and images that resonate with your Audience definitions.

You’ll also need to map out the Experiences, or the individual Pages and elements on those Pages, where personalized messages will be delivered. Common places to personalize include hero images, headlines, promotional banners, lightboxs, butterbars, and more.

Map out the necessary components of your personalization strategy:

  • The messages that you’ll deliver to each Audience
  • The Pages where your Campaigns will run
  • The customized Experiences on each Page

Organize this information into a Messaging Matrix. Want to see a template? Click to download this sample Messaging Matrix spreadsheet.

In a Messaging Matrix, map how each Experience component will be customized per Page and Audience.  You’ll create a separate matrix for each Page, likely as separate tabs in a worksheet.

TEST YOUR CAMPAIGNS AND EXPERIENCES

After you map your Campaigns in a Messaging Matrix, there's nothing to stop you from building and launching those Campaigns.

However, the data-driven decision-making that you used in A/B testing is still an important part of your personalization strategy. A/B testing helps you validate that the personalized experiences you deliver are impactful, so you can learn from and iterate on the Campaigns you launch. There are always multiple ways to execute any given idea; testing validates that the proposed method is relatively optimal. You can consider each Experience that you create to be a hypothesis: a testable statement that you use to measure impact of your personalization strategy.

Even if you don't explicitly test your Campaign designs before launch, Optimizely Personalization still makes it easy to measure results with statistical rigor. Optimizely Personalization uses a holdback to show you the difference between the original experience and your personalized experience, so you can track your Campaign’s progress.

CORE PERSONALIZATION TACTICS

Ultimately, a comprehensive approach to personalization strategy should ensure that your Personalization effort is maximizing its potential. However, here are three core tactics to help you get started.

Symmetric messaging

  • What: The landing page of your site should match the expectations that banner ads, paid search campaigns, and email campaigns set for your visitors. In online marketing, this is referred to as “symmetry.” Tightly tailor the look and feel, value propositions, and keywords of your site for each Audience that arrives on your site from a marketing campaign.
  • Where: in messages, CTAs, and value propositions

Behavioral retargeting: 

  • What: Show visitors products that they’ve already shown interest in a second time to encourage a purchase. With Personalization, you can display products to shoppers in the same session, as they navigate from page to page. If a visitor has selected or searched a destination, price point, or a particular hotel, personalize the ongoing experience with promotions and messages that match this intent. You can also actively adjust the logic that powers your recommendations using this data to ensure every step in their journey is a great fit.

    If your business is comfortable with using discounts and promotions to drive purchases, you can use urgency messages or discounted cross-sells (bundling) to increase cart size and conversion rate. Show an incentive to visitors who have looked at a product multiples, returned to your site without purchasing, or added items to a cart without purchasing.
  • Where: search results, promotions, recommendations, tailored images, checkout funnel

Contextual empathy:

  • What: Adjust the tone, language, imagery, and navigation options that your visitors see to be more relevant and empathetic to their context. This can help to provide a smooth, high-value experience for your customers. 

    A visitor is on a mobile device may have less time to browse or a greater likelihood to share on social networks. A visitor in a foreign country may have particularly interested in your store’s shipping policy. A new visitor to your site or app may not be as ready to complete a transaction with you; build trust by showing more informational material and proof points. Conversely, you might display a streamlined conversion funnel for a returning visitor.
  • Where: images, navigation, banners, recommendations

Run campaigns

Once you've discovered Audiences and planned personalized Experiences, you’ve built the essential elements of your personalization strategy. You're ready to run Campaigns on your site. There are several factors to running Campaigns in Personalization that you should consider, including managing Audience overlap and interpreting your results. 

MANAGE AUDIENCE OVERLAP

In Personalization, it’s likely that a single visitor will qualify for multiple Audiences. However, your visitor should only see one personalized Experience for any given Campaign. How do you decide which Experience she will see? This depends on how you to prioritize your Audiences, which Optimizely Personalization allows you to drag-and-drop.

To determine which Audiences get priority when there's overlap, use the research from your Audience discovery process. For example, is it more important that a visitor is browsing your site from a mobile device or that she’s seen your Spring promotional campaign? Prioritize your Audiences according to your key business goals and metrics. When a visitor qualifies for more than one Audience, she’ll see the personalized experience that you decide is most impactful for your business. 

 

NOTE:


On Audience Reach and Planning for Maximum Impact

"Reach" is a term that describes the percentage of your overall traffic that a given audience represents. The granularity and quantity of the campaigns addressing those audiences will directly influence the net ROI that your personalization program generates. To understand why, let’s consider a simple example:

Let’s imagine that you run a campaign that generates a 20% lift for an audience that represents 10% of your customers. This is the same as generating a net 2% lift for your entire traffic.

Now, let’s imagine that you run a campaign that generates a 10% lift for an audience that represents 25% of your customers. This is the same as generating a net 2.5% lift for your entire traffic.

As you can see, the more narrow the segment and the smaller the Audience, the proportionally smaller the impact to your total ROI.

Key takeaway:

All else being equal, run many Campaigns to a number of large Audiences to maximize the impact of your personalization strategy.

INTERPRET AND ACT ON YOUR RESULTS

As a Campaign runs, Optimizely tracks Events and Pageviews and uses them to calculate how well personalization is working. You can see how well a Campaign is performing on its Results page.

The Results page lets you answer three questions:

  • Overall, how is the Campaign doing? The top-level summary tells you how much your Campaign is helping or hurting. It finds the difference in conversion between all the visitors who saw a personalized experience that was delivered by the Campaign, compared to visitors who were eligible for an Audience but were bucketed into the holdback.
     
  • How large are my Audiences? The Results page provides a chart that shows how large each Audience as a percentage of all visitors eligible for a Campaign. You may have a particular Experience that performs well but is shown to a very small Audience, so the Campaign's overall impact is small. In that case, you might add additional Audiences to the Campaign or expand the definition of the Audiences you already have. For example, you could broaden a "Shoe Shoppers" Audience from visitors who bought shoes in the last week to also include visitors who browsed shoes in the last month
     
  • How is each Experience doing? You can break down your overall Campaign results by its individual Audiences. Sometimes, a Campaign appears to neither increase nor decrease lift. But within that Campaign, some Experiences will perform much better than the baseline and others will perform much worse. If an individual Experience is underperforming for an Audience, you can change the experience, then publish it for those visitors and see whether lift improves.
  • How can I extend my personalization strategy’s reach and impact? In Recommended Audiences, explore how your different segments behave differently than one another, and discover new audiences to extend the reach and impact of your campaigns.