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There are many key metrics that marketers care about. Of these, return on investment (ROI) may be the most important because it justifies the expense of marketing programs and campaigns that are intended to generate revenue for the business.
As a general rule of thumb, a typical marketing ROI is approximately a 5:1 ratio* (five dollars is returned for every dollar spent), with exceptional ROI being considered at around a 10:1 ratio. Anything below a 2:1 ratio is considered not profitable.
This is one reason that marketing programs can be challenging, as there are many different parameters (for example, content, channel, frequency, time) that impact ROI. And of course, what works for someone else might not work for you as every business and its customers are different.
At the end of the day, the only way to find out what will elevate the ROI of your marketing programs is by experimenting. Done right, experimentation can answer the most difficult marketing questions and enable you to optimize for highest conversion rates and ROI.
For example, did you know that Bain & Company reports that Netflix runs over 1,000 marketing tests per year and Amazon more than 2,000? For several global companies, experimentation has helped spur business growth with ROI increases of 20% or more.*
The growth and the marketing teams are generally on the hook for generating ROI. And the stakes are particularly high when they will engage millions of users with diverse behavioral and psychographic patterns, across various engagement channels.
The only way to gauge if your efforts will produce the results you want is by designing multiple experiments to test individual variations, to determine how each variation may ultimately perform.
For example, imagine you need to figure out how many push notifications to send to get your new users to add a product to cart, using a discount coupon and without causing unsubscribes. Even if you limit the scope of your experiment, you still need to test many different scenarios. Then, when your tests are completed, you need to do a manual analysis in order to arrive at a conclusion. And even then, this conclusion might only be true for a limited period of time!
So yes, traditional experimentation and optimization methods have many limitations that can hinder their effectiveness which include:
Manual and Time-Consuming Effort: Manual experiments require significant time and effort to set up, execute, and analyze. This can increase the time needed to conduct the experiment and delay the optimization process.
Limited Scale and Scope: It’s challenging to capture insights from a holistic perspective and then optimize using manual experiments across multiple channels, touchpoints, or customer segments.
Inefficient Data Analysis: Traditional data processing and analysis are challenged by collecting and analyzing large volumes of data generated and can be error-prone and may not uncover key insights hidden within the data.
Lack of Personalization: Experimentation at a granular level, targeting specific customer segments or individual touchpoints, becomes challenging without advanced tools and automation.
Inability to Handle Complex Journeys: Using traditional methods, it’s difficult to isolate different touch-points, test variations, and identify the most effective journey paths. What is needed is a sophisticated experimentation platform.
You’ve undoubtedly experienced some of the issues mentioned above when you’ve tried to conduct tests before sending out a campaign. Perhaps you’ve also been frustrated and wondered if there’s a way to solve the challenge of experimentation at scale and optimization in real time. Indeed, there is. It involves several steps and best practices.
First is the need to carry out multiple experiments to assess a broad range of possibilities available to you as a marketer to engage your customer be it the type of content, channel, engagement time and frequency to identify the right combination that delivers the highest probability of conversion. This is important as statistically, the larger the number of experiments, the greater the accuracy of the model that predicts the winning combination.
Second, you need to identify the winning strategy without any bias and apply the winning strategy to customers in real-time to maximize conversions. In parallel, you need to continuously experiment with other possibilities to make sure you are applying the winning strategy to your customers at any given period of time. And these experiments need to be conducted in a way that doesn’t diminish the customer experience.
Effective experimentation is often resource-intensive which increases the cost of running campaigns, impacting your ROI. Fortunately, the advances and continued innovation of AI/ML models can vastly improve the effectiveness of your efforts and your results.
As a growth marketer, say you want to figure out the ideal delay-time to engage customers with abandoned carts or find out the best time of the day to update users about products that are back in stock. Or maybe you would like to identify the best messaging channel to nudge users to resume watching content on your streaming platform.
What if you had a solution that could do all this for you in a scalable and automated way? CleverTap’s IntelliNODE is that solution built specifically for the growth marketeer challenged by all the experimentation, optimization, and ROI challenges we’ve been detailing.
Built on time-proven AI algorithms, IntelliNODE simplifies customer journeys by first testing for multiple, complex journey paths and then identifying the best path for individual customers — and doing this at scale and in real-time.
With IntelliNODE, you can compare multiple paths within a journey. You can try different message copies, creative calls to action, delivery times, channels, or any other combination to determine the best journey for goal conversion. Each of these variations is essentially an experiment, which you can run to determine the best, most impactful path.
By continuously testing and automatically evaluating the “winning” paths, you’re able to send each user down the path that has the highest probability of conversion.
In short, IntelliNODE ensures a great user experience and increases the probability of conversion based on your defined goals, while ensuring that your marketing efforts are optimized and your costs reduced.
Take your journey orchestration to the next level with IntelliNODE!
Visit our webpage to learn more.
