Liva LaMontagne

Personality Matters: How one company doubled its ROI by customizing ads based on personality

August 31st, 2015

Today’s algorithms can reliably predict people’s personality traits just by analyzing their Facebook updates.

As marketers, we have the ability to use the digital footprint data of our customers to assess their personality, create messages that resonate with them personally and build more effective campaigns.

To see if this really works, let’s look at return on investment (ROI) results from a recent test of customized ads based on personality traits.

Sandra Matz and her fellow researchers from the Psychometrics Centre, University of Cambridge, collaborated with VisualDNA, an agency helping companies leverage psychographic audience data to better personalize their messaging. Together, they worked with an online beauty retailer to conduct an experiment on Facebook, and presented their results at the 2015 Annual Convention of the Society for Personality and Social Psychology (SPSP).

The researchers hypothesized that presenting customers with ads that fit their personality traits (extraversion or introversion) would result in higher ROI for the campaign

 

The test

To test their hypothesis, they created two sets of ads, one customized towards extraverts and the other tailored towards introverts. Although other personality traits could be relevant, the researchers picked extraversion/introversion for the test, because it was most conducive to creating contrasting ads.

Researchers described the typical extravert/introvert to designers, and the designers came up with corresponding ads.

 

Next they selected two groups of Facebook users — one consisting of more extraverted people and the other one consisting of more introverted people.

They then showed the two ads to both user segments, such that both groups saw both congruent (e.g., introvert customer/introvert ad) and incongruent (e.g., introvert customer/extravert ad) ads.

 

Results

Overall, the seven day campaign generated 6.43 million impressions, 390 conversions and 12,830 pounds ($20,000 USD) in revenue for an ad spend of 4,000 pounds ($6,300 USD).

Customizing ads to personality traits significantly improved ROI for both target groups.

Showing introverts an introverted ad was twice as profitable as showing them an extraverted ad. Showing extroverts an extraverted ad resulted in 30% higher ROI than showing them an introverted ad.

 

Takeaways

To sum up, personality can be a useful tool for better understanding your customers, creating marketing messages that will resonate more with them and increasing ROI for your campaign.

Although personality is a reliable predictor of behavior in situations when people have a fair degree of choice, different contextual factors (e.g., industry, complexity of the decision, social influence) can change the strength or even direction of this relationship.

Remember to study your customers’ personality-behavior relationship specifically; find out what personality traits your existing and potential customers have in common.

You can assess your customers’ personality internally, if you have enough dedicated resources, or you can outsource this task to a vendor. According to Vesselin Popov, Development Strategist, The Psychometrics Centre, University of Cambridge, one advantage of outsourcing personality prediction is that you can anonymize the data.

You don’t need to know your customers’ personal identity to learn what kind of messaging they would prefer.

 

You might also like

Lead Nurturing: Market to personality and behavior, not job title (from the B2B Lead Roundtable blog)

Discover your personality with a 120-item personality test (from University of Pennsylvania)

1-click prediction of 34 psycho-demographic traits (prediction API of the Psychometrics Centre, University of Cambridge)

Penn Researchers Use Facebook Data to Predict Users’ Age, Gender and Personality Traits (from the University of Pennsylvania)

IBM researcher can decipher your personality from looking at 200 of your tweets (by Dean Takahashi, VentureBeat)

Using The Big Five For Customised Advertising On Facebook by Matz, S.,  Popov, V., Kosinski, M., Stillwell, D., presented at the Annual Meeting of the Society for Personality and Social Psychology (SPSP), 2015.

Share and Enjoy:
  • LinkedIn
  • StumbleUpon
  • Facebook
  • del.icio.us
  • Digg

Categories: General Tags: , , , ,

Ken Bowen

How Customers Read Reviews: Four takeaways for marketers from a business school study

August 27th, 2015

For over a decade, MarketingExperiments has stressed the importance of customer reviews.

When our Customer Ratings Tested Web clinic was originally broadcast in 2004, Shopping.com was the third-most popular ecommerce site in America, and Amazon’s annual revenue was a mere 7% of what it has since become.

In the ten years since, customer reviews have gone from being a supplemental component of our marketing strategy to the single biggest influencer of consumer behavior. In a 2013 survey by Dimensional Research, 90% of customers responded that their buying decisions are influenced by online reviews. A similar study conducted by Retailing Today found that 81% of consumers conduct online research before making major purchases.

With the knowledge that customer reviews are now one of the most vital components of our marketing collateral, how can we make sure that we are presenting our reviews in a way that best serves our customers?

New ecommerce research by Dr. Raffaele Filieri hopes to answer that question.

Filieri specializes in consumer behavior and digital marketing at Newcastle Business School, whose recent double accreditation by the Advance Collegiate Schools of Business (AACSB International) puts it in the top 1% of business schools in the world.

His independent study, “What makes online reviews helpful? A diagnosticity-adoption framework to explain informational and normative influences in e-WOM,” published offline in the Journal of Business Research, not only confirms that customer reviews carry more clout than almost all other marketing efforts but, for the first time, reveals how customers actually process online reviews.

Below are four key takeaways we can learn from his research:

 

Takeaway #1. Customers process review data quickly

In his study of brands such as Kia Motors and TripAdvisor, Filieri found that customers are not carefully reading review data. Instead, they are scanning it quickly.

When processing review data, users are looking to gather as much information as they can in the shortest amount of time possible. Users don’t want to search for or through reviews; they want quick visual summaries of the sentiments of other customers.

As marketers, we must be aware of this fact and provide prominent, easily scannable customer reviews whenever possible.

Read more…

Share and Enjoy:
  • LinkedIn
  • StumbleUpon
  • Facebook
  • del.icio.us
  • Digg

Categories: Ecommerce Tags: ,

Selena Blue

Mobile Marketing: Four takeaways on how to improve your mobile shopping experience beyond just responsive design

August 24th, 2015

We all know by now that mobile has become an important tool for ecommerce consumers.

However, do we treat it with the same level of investment that it deserves? What experience are we giving our customers: a desktop replica or something better?

In Q1 of 2015, 59% of all retail time was spent on mobile devices, according to comScore’s State of the U.S. Online Retail Economy in Q1 2015. That’s right — consumers spent more than half of their online shopping time on their tablet or mobile device.

Yet, only 15.4% of total digital commerce dollars came from mobile sales.

That leaves a lot of opportunity for marketers and designers when it comes to the mobile shopping experience.

At the MarketingSherpa Media Center at IRCE 2015, Daniel Burstein, Director of Editorial Content, MarketingSherpa (sister company of MarketingExperiments), spoke with Gregory Casey, User Experience Designer and Architect, eBags, about how eBags goes beyond normal responsive design to create a truly mobile-adaptive experience.

Watch the interview or read on for four takeaways Gregory shares.

Read more…

Share and Enjoy:
  • LinkedIn
  • StumbleUpon
  • Facebook
  • del.icio.us
  • Digg

Categories: Ecommerce Tags: , , , ,

Andrea Johnson

Three Steps to Boosting Conversions by Building Customer Relationships

August 20th, 2015

MarketingExperiments’ Marketer’s Creed, Article 1, states:

“People don’t buy from companies, from stores or from websites; people buy from people. Marketing is not about programs; it is about relationships.”

NextAfter, an organization dedicated to helping nonprofits discover what truly makes donors give, put this concept to the test during an end-of-year fund-raising push. Tim Kachuriak, the company’s Chief Innovation and Optimization Officer, is so passionate about this cause that he cut his family vacation short and flew cross-country to join us in the studio for the most recent MarketingExperiments Web clinic to share his results and show how what NextAfter learned could benefit any organization.

Watch it here. 

Background: The Heritage Foundation, a think tank, was soliciting end-year donations.

Goal: To increase donations.

Research question: Which email treatment will generate the most revenue?

Test: A/B split test

 

Version A

This email drips with formality and reads like a direct-mail piece. It begins with “Dear Fellow Conservative” and goes on to exhort the reader to “make a bold statement by standing with the Heritage Foundation.” It is signed by Jim DeMint, the foundation’s president.

  Read more…

Share and Enjoy:
  • LinkedIn
  • StumbleUpon
  • Facebook
  • del.icio.us
  • Digg

Categories: Analytics & Testing Tags: , , , ,

David Green

A/B Split Testing: How to use the right test progression to get customer discoveries and results

August 17th, 2015

Throughout the year, I talk to a lot of people who do A/B and multivariate testing to increase conversion rates. Even in very large companies with well-known brands, it’s not uncommon to hear stories of many tests without a lot of lifts. 

Often, when they first started testing, there were easy wins. Now, not so much. These companies have all the tools necessary to test but lack one or more key ingredients necessary for sustained success.  In this blog post, I will share one of those key ingredients: testing progression.

 

What to do after you’ve plucked the low-hanging fruit

Getting great results is not easy to sustain. There are many factors that go into successful test strategies, starting with having a product or service with a compelling value proposition. All the strategy and tactics in the world will not prop up mediocre products and services.

If you do have a great product or service, the right approach to conversion rate optimization will help you realize the full potential of your solutions, especially after you have capitalized on the “low-hanging fruit” leadership is forever hungry for.

The best testing strategies are not a collection of random, disconnected tests. They are also not the product of blindly copying what your competitors do. 

Rather, tests build on each other, ideally in a series of logical if-then statements.

For example, the below flowchart shows a series of “if-then” statements that can be filled in based on the cost per acquisition (CPA) test results. 

  Read more…

Share and Enjoy:
  • LinkedIn
  • StumbleUpon
  • Facebook
  • del.icio.us
  • Digg

Categories: General Tags:

Ken Bowen

Service Recovery: Three ways that Audible uses its cancellation path to encourage retention

August 13th, 2015

As marketers, we often hear the old adage that it is five times more expensive to gain a new customer than it is to retain an existing one.

This stat has been circulating since the 1980s, but didn’t take hold in the industry until July 1990, when the Harvard Business Review cited the five times figure in an article. Though the accuracy of the stat is often called into question, the underlying principal — it’s cheaper to keep your existing customers happy than to continuously pump marketing dollars into chasing their replacements — is fundamentally sound.

This is the same core tenet that has driven much of our work at MarketingExperiments over the years. We believe in the transformational power of customer-first thinking, and hold that companies should shift their focus from the cost of pleasing customers to the value of doing so.

In the same Harvard Business Review article — ”The Profitable Art of Service Recovery” by Christopher Hart, James Heskett and W. Earl Sasser, Jr. — formally introduced the concept of “service recovery.” Service recovery refers to the retention strategies that we implement when customers’ perceptions of or experiences with our particular services do not match their expectations.

“Service companies must become gymnasts, able to regain their balance instantly after a slipup and continue their routines,” the article  argued. “Such grace is earned by focusing on the goal of customer satisfaction, adopting a customer-focused attitude, and cultivating the special skills necessary to recovery.”

While the traditional business model primarily emphasizes monetary benchmarks — revenue, profit margins, return on investment — the recovery model holds customer satisfaction as the most fundamentally important KPI of all. A study conducted for the U.S. Office of Consumer Affairs once found that 70% of U.S. households would maintain brand loyalty if their problems were resolved satisfactorily at the time they arose, adding credibility to the importance of this KPI.

In short, putting the customer first and quickly and honestly addressing their concerns fosters loyalty, even when errors are inevitably made.

For an example of service recovery in action, let’s take a look at Audible.

Read more…

Share and Enjoy:
  • LinkedIn
  • StumbleUpon
  • Facebook
  • del.icio.us
  • Digg

Categories: Marketing Insights Tags: , ,