Measuring the success of website personalization: essentials for marketers

In addition to increasing engagement, personalization shortens the sales cycle and helps the bottom line, reducing customer acquisition costs by up to 50% and increasing marketing ROI by 10-30%, according to a McKinsey report. 

But how do you know if personalization is working? Taking a data-driven approach will help you quantify the return on investment (ROI) of your personalization efforts, optimize your strategies based on data, and make informed decisions about resources in the future. In this article, we’ll explore how to set clear objectives, establish benchmarks, measure quantitative and qualitative performance, and collaborate cross-functionally in order to measure the impact of website personalization.

Best practices for effectively measuring website personalization

Website personalization is a digital marketing strategy that incorporates customer data — both demographic and firmographic — as well as browsing history, and user behavior to create custom experiences for the visitor throughout the customer journey. To identify winning personalization strategies, it’s important to start with these best practices:

• Set up A/B tests for controlled personalization experiments. Pick a strategy: Test one element at a time or consider multivariate testing to find the optimal variations.
• Track changes to the website that aren’t related to personalization, so you can be confident that you’re measuring the impact of personalization specifically (not a flashy new color scheme).
• Create a dashboard that shows metrics side-by-side. Make sure you can filter by different segments or personalization strategies.
• Track metrics consistently to spot trends and long-term impact. Consider analyzing real-time customer behavior in cohorts.
• Share wins with leadership to build support for personalization efforts.

Start by setting clear objectives 

Before you can measure the impact of your personalization, you have to know your goals. They should be SMART — specific, measurable, achievable, relevant, and time-bound — and tie directly to overarching business objectives. Some common goals for personalization programs include:

• Increase conversion rates
• Improve customer retention
• Enhance user experience
• Shorten the sales cycle

Be sure to consider your company’s short- and long-term goals and how they might influence your tactics when goal setting. For instance, if your company is focused on customer retention or customer loyalty, your personalization efforts might prioritize tailoring content and offers for a customer segment composed of existing customers. If new customer acquisition is the priority, you might focus on personalizing the experience for first-time visitors.

Know where you stand by establishing benchmarks

Before you make changes to your website, establish baseline KPIs so you can accurately measure the impact of your efforts. It’s important to look at not just how you’re performing, but also how you stack up against competitors and the industry as a whole. Below, explore three types of benchmarks to consider for your website personalization program.

Internal historical benchmarks

Your website’s past performance is often the most relevant and accessible benchmark. It’s helpful to track progress over time so you can spot trends and improvements. Don’t just look at overall numbers — break these metrics down by audience segment, traffic source, and other relevant factors. When running an A/B test, you don’t need to look at historical baselines since A/B tests have a built-in baseline and statistical significance thresholds (for example, if group A sees a personalized site but group B doesn’t). 

Tip: Use your analytics tools or integrate them into Webflow to gather at least 3-6 months of baseline data before making any major changes. This will take into account seasonal fluctuations. 

Competitor benchmarks 

Benchmarks from competitors might be harder to access, but they can help you understand how you stack up against similar businesses. In addition to gathering quantitative metrics like market share and customer lifetime value, consider qualitative benchmarking by looking at competitor strategies and their user experiences. If you don’t have direct competitors, consider including indirect competitors or businesses that are adjacent to yours. 

Tip: Gather public data on competitor websites using tools like SimilarWeb or Alexa. You’ll be able to access metrics like average time on site or bounce rate but conversion data won’t be publicly available. 

Industry-wide benchmarks

Industry-wide benchmarking gives a big-picture view, so you can model your personalization practices after best-in-class performers. These benchmarks can also be a powerful tool to help cross-functional leaders understand how your campaigns compare to industry standards. Keep in mind that there can be variation within the same market, so think carefully about how your industry is defined to make sure you’re comparing your impact against similar companies. 

Tip: Look for industry reports from companies like Bloomreach or Gartner to collect aggregated data on personalization performance. For instance, you can find industry benchmark information for conversion rates, customer retention rates, click-through rates, and more. 

Decide on key quantitative metrics to track

To truly tell if personalization is moving the needle for your website, you’ll want to track if there are positive changes to key metrics that are specifically related to personalization (rather than changes to the product, for example). Often, marketing leaders instantly go for the holy grail: they want to tie website personalization directly to a revenue-focused metric like customer lifetime value (CLV). But personalization influences all stages of the prospect journey, not just the bottom of the funnel.

To paint a clearer picture of the impact of personalization, consider building a dashboard that tracks the impact of your personalization efforts. In it, be sure to display the most commonly tracked metrics to understand performance across touchpoints:  engagement rate, conversion rate, customer value, and customer satisfaction. 

Engagement metrics

Tracking engagement metrics for the parts of the website that are personalized is a good gauge of whether personalization is working because they measure user behavior. Consider measuring one or all of the following engagement metrics: time on site, pages per session, and bounce rate. 

Conversion rates

When you see an uplift in your conversion rate after implementing a new website personalization strategy, that’s a huge win for your marketing team. This might be seen in the overall conversion rate uptick or the conversion of a specific action like a CTA button or demo form fill. Brand loyalty is also a sign of high conversion, so be sure to take note of changes in how often customers return to make purchases.

Customer value

Customer lifetime value (CLV), customer retention, and churn rates help you understand the long-term impact of personalization. 

Customer satisfaction score

Track changes in Net Promoter Score (NPS) before and after you implement website personalization changes to measure if customers are more or less satisfied with your business. 

It’s important to consider short-term and long-term value and evaluate these metrics holistically. For example, a B2B software company that personalizes product pages may see improved engagement metrics, but if the conversion rate and customer value stay the same, that might indicate the personalized content is interesting but not driving business impact. 

Beyond the numbers: the qualitative impact of personalization

While quantitative metrics provide concrete data, they’re best coupled with qualitative insights. Here are the most common forms of qualitative feedback:

• Customer feedback: Collect direct customer input via post-interaction surveys. For instance, you could ask, “On a scale of 1-10, how relevant did you find the product recommendations on our site?”
• Brand perception: Conduct regular surveys to gauge how customers perceive your brand and monitor changes in social media sentiment. 

Work across teams to personalize more effectively

Working cross-functionally with other teams is key to an effective personalization strategy. During a period where the amount of people contributing to the website continues to grow — with 67 people on average working on a website at any given time — website personalization shouldn’t be a siloed effort. 

Website personalization impacts the entire organization, but with 81% of marketing leaders reporting they feel held back by other cross-functional stakeholders in our 2024 State of the Website report, it’s clear that bringing leadership into the fold  as you experiment and implement website personalization and optimization tactics is now critical. 

Here’s how to get buy-in from key leaders:

Marketing leaders 

Discuss marketing campaign effectiveness and performance with your CMO. When approaching the CMO, talk through examples of personalized campaigns and their performance compared to non-personalized ones, such as how they successful supported lead generation efforts or generated higher conversion rates. Use the meeting to brainstorm and get the CMO’s thoughts on personalization campaigns and any larger marketing initiatives that you should keep in mind. 

Sales leaders 

Engage your CRO to understand the impact on the sales pipeline, lead quality, and revenue. The CRO is all about numbers and conversions, so the data will drive the conversation. Share how personalization has shortened the sales cycle or improved the win rate, and it’s especially important to highlight any anecdotes from the sales team about the impact of personalization on conversions. 

Product leaders

Work with your CTO or Head of Product on feature adoption and user experiences. Website personalization can serve as a testing ground to gauge the interest and effectiveness of messaging and features with the target audience. Those insights can inform product development decisions, so be sure to share openly and identify opportunities to improve the product experience based on personalization tests. 

Finance leaders 

Collaborate with your CFO on ROI and financial implications. When talking with your CFO, they’ll want to know the bottom line impact, and it’s your job to convince them that you should continue to receive budget for website personalization efforts. 

Customer Success leaders 

Partner with the Head of Customer Experience or Customer Success to evaluate customer satisfaction and retention metrics. Collaborating with these stakeholders is an opportunity to ideate and further understand the impact of personalization campaigns on customer relationships. They are closest to the user, so they should be a good gauge of how personalization will be perceived and impact the bottom line. 

Optimize your website and improve the user experience with Webflow

Measuring website personalization is an ongoing process, not a one-time task. It requires balancing quantitative metrics with qualitative insights, so ultimately you improve the business’ bottom line.

With Webflow, you can build personalized user experiences and optimize your website. To learn more about creating a highly personalized website experience, get in touch with our team today.