D2C E-Commerce Personalization: 7 Key Metrics You Need to Track!



Customers can’t buy from a brand they don’t notice or don’t have access to!

All Direct-to-Consumer (D2C) brands have two questions that need urgent answering:

  1. How do we get new customers to notice our brand?
  2. How do we increase discoverability of and access to our products across platforms?

It all comes down to a behavioral science principle: Salience Bias.

In layman terms, this principle states that our brain prefers to pay attention to elements that are prominent or that emotionally resonate with us.

So, what makes something “salient”?

Behavioral Science geeks can convert this into a debate in itself!

But…

As marketers, we know the answer lies in understanding our customers – their needs and desires (both stated and unstated) and curating our products, services, and marketing campaigns in line with this.

According to Forrester, 89% of digital businesses are investing in it – Personalization!

Yes – there, we said it!

The ubiquity of personalization is evident across the board and one way to drive home that advantage is by strengthening your online presence through the power of e-commerce.

And, stitching seamless offline and online retail experiences is critical in the current scenario.

As customer-centric Direct-to-Consumer (D2C) brands, you can’t chase revenues without truly understanding your customers’ needs, wants, and preferences. And, only once you’ve set that flywheel in motion, can you double-down on measuring and tracking the business KPIs that matter.

Wondering how to kick start this journey and tap into the Salience Bias of your customers?

Look no further!

We’ve done a lot of the groundwork for you – spending hours analyzing the D2C e-commerce landscape, studying differentiated marketing strategies, and crunching countless data-points – to build a simple step-wise guide that you can easily implement to start your 1:1 omnichannel personalization journey, today!

Check out our free e-book that outlines this secret recipe for customer engagement and retention success right here: Personalization Playbook: Reimagining Offline-to-Online Retail With D2C E-Commerce

This breaks down the “why”, “what”, and “how” of your D2C e-commerce 1:1 omnichannel personalization strategy. 

But, it’s also important to understand the impact of 1:1 omnichannel personalization on your entire funnel.

The best route to follow through this maze of “gauging performance” is to track the metrics that matter the most across your acquisition, conversion, and retention funnels. 

Let’s break this down further,

  1. Acquisition: 

“I’ve spent enough on ads and marketing, now I’ll wait for customers to land on my website or download my app!” No!

Notice, this graph:

CAC is outsripping CLTV! 

With the right 1:1 omnichannel personalization strategy in place you can visibly see your CAC decreasing and your CLTV increasing over a period of time!

Let your personalization strategy speak for itself.

  1. Conversion: “I have X paying customers, is that it?” No!
  • Average Order Value (AOV)

Here the goal is to ensure that your existing customers continue to increase their spends each time they land on your website to make a purchase.

For instance: Your long-time customer, Jack, used to check-out with a cart value of $50. But now, after your 1:1 personalized product recommendations, data-driven upselling/cross selling, and product bundles checks-out with a cart value of $100!

Apply this to all your customers,

Imagine the increase in revenue attributed to each customer at the end of the quarter!

  • Add-to-Cart Rate

We said personalization solves the problem of product discovery…well did it?

Simple, track the percentage of customers who placed at least one product in their virtual shopping carts during an active session. 

Now, you’ll know if all that effort you put into collecting real-time shopper data and sending those triggered personalized “cart-abandonment” emails to relevant-targeted customers who didn’t complete a purchase – paid off or not!

  • Return on Advertising Spends (ROAS)

The average global CTR for digital display ads is just 0.17% which translates to fewer than two clicks per 1000 impressions. 

You reduced this abysmal performance by curating personalized ads!

You will see that AI-led personalization and 1:1 product recommendations have uplifted your ROAS over a period of time.

Track it. Measure it. Put a number on it!

  • Overall Conversion Rates

For a Direct-to-Consumer (D2C) brand finally everything boils down to one main conversion activity, i.e. a purchase/sale.

A research by PWC uncovered that 12% of online shoppers choose their favorite retailer because of personalized offers.

Be your customers’ brand of choice, comfort, and convenience!

  1. Retention: “It is all about brand loyalty!” Yes! 

In an increasingly competitive landscape, building customer loyalty is one of the biggest challenges marketers face. So, if you aren’t personalizing the entire customer experience, you’re missing a trick.

How do you measure brand loyalty?

  • Customer Retention Rate (CRR):

With your 1:1 personalization efforts you would have established the most important factor – TRUST! 

With personalization, you can show your customers that you understand their stated and unstated needs. You can show them that you will always provide them with information, content, offers, and products that are most relevant to them as individuals. Which will make the customer TRUST your brand, thus ensuring stickiness.

The best way to measure this is by converting it into a tangible metric:

Remember,

56% of online shoppers are more likely to return to a website that gives personalized product recommendations.

  • Customer Lifetime Value (CLTV):

The more you tap on the customer’s Salience Bias – with 1:1 omnichannel personalization, the higher is the tendency of the customer to buy from you.The revenue you earn from this relationship is your CLTV.

CLTV is a function of and has a direct correlation with:

  • Average Order Value (AOV) = Total Revenue / Total Number of Completed Orders
  • Average Purchase Frequency Rate (APFR) = Total Number of Purchases / Total Number of Customers
  • Average Customer Value (ACV) = Average Order Value (AOV) / Average Purchase Frequency Rate (APFR)
  • Average Customer Lifespan (ACL) = Total Customer Lifespans / Total Number of Customers

Let us keep it simple,

Remember, a smart omnichannel personalization will help you track these metrics and facilitate in reducing your customer acquisition costs by 50%, lift revenues by 5-15%, and increase marketing spend efficiency by 10-30%.

Hitting Upon the Perfect Mix: Data + Psychology + Marketing 

Data: To build a Unified Customer View through the collection and tracking of customer data points that are – Right, Relevant, Rich, & Real-time

Psychology: To create that link (Salience Bias) between your brand and your customers

Marketing: To tie all these efforts together seamlessly so as to develop and execute an effective 1:1 omnichannel personalization strategy

Be a proactive D2C e-commerce brand. 

If you haven’t started your D2C e-commerce journey yet, read on to find out why it is time for you to re-calibrate, now!

Ensure you always deliver customer-centric, value-driven, and sustainable customer experiences at scale. Start today and master the perfect mix

Category - Personalization

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Medha Kumar

Medha Kumar

Medha is a Marketing Executive at Netcore Solutions. She is deeply interested in Martech , with a slight bias towards Psychology and the works of Kahlil Gibran.

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