/ Growth Practices

Personalization For eCommerce: Calculate Your Return On Investment (ROI)

Unlike many other optimization tools, on-site behavioural merchandising and messaging helps you to specifically and precisely address and achieve your individual business goals.

Increase Revenue, Growth Or Cart Size?

In this blog post I would like to discuss these goals using typical e-commerce scenarios and how to calculate your return on investment (ROI) once you start personalizing your website.

First you need to define goals. You likely want to increase revenue and profit, but in some cases you might want to generate growth instead (e.g. when introducing a new product) or increase cart size (e.g. when selling apparel with a return rate in mind). Intempt’s engine can help you leverage all of these goals.

Getting Visitors Into Your Conversion Funnel

Usually marketers are tempted to start optimizing their online business by dragging more visitors into their conversion funnels (quantity). As a next step, they optimize their website for all traffic, with an ideal audience in mind (quality).

If you reached this point, the next logical step is to diversify your on-site user experiences. Why? Because you likely have diversified your traffic sources and now it is time to do the same on your website based on your visitors behaviour.

Calculate Your ROI For eCommerce Using Our Calculator

You can easily calculate your personal return on investment (ROI) when using Intempt by using our ROI calculator. ROI simply means the gain from an investment minus the cost of investment divided through the cost of investment

Enter all your current website data (yellow cells) to see your personal ROI and your expected outcome using Intempt (green cells):

  • Time period (it is recommended to start with 12 months)
  • Your unique visitors per month
  • Your average order value (AOV)
  • Your current conversion rate (CR)
  • Your current ad spend per month

Please note this data doesn’t need to be 100% accurate. You may simply get an idea how personalization helps you to gain more revenue and profit:

Calculate Your eCommerce ROI

As mentioned above, in some cases you might want to trade one key performance indicator (KPI) for another.

Let us assume you would want to focus on increasing your average order value (AOV) because you are selling apparel. In this case you might run a personalized cross-sell campaign, suggesting products to your visitors based on their past or (predicted) future behaviour.

This campaign however might affect and decrease your conversion rate (CR) slightly, but your return on investment (ROI) still will be higher.

The ROI calculator is based on conversation rate (CR), the most common key performance indicator (KPI) for marketers. If you have other goals in mind and would like to see how Intempt pays off, simply get in touch with us and we will send you a report based on your individual business goals.

Calculate Your eCommerce ROI

Calculation: How Personalization Affects Your CPA

Let us take some data from Google Shopping (2016) to get an idea how Intempt would pay off for your business.

Cost per acquisition (CPA) refers to your advertising spends divided through your conversions. If you increase conversion rate with Intempt, this will automatically lower your CPA.

If an apparel company having 20,000 unique visitors per month (with 1000 visitors generated through paid ads costing $260) would increase its conversion rate (CR) from 2% to 2.1% with Intempt (team plan), the cost per acquisition (CPA) would decrease from $0.65 to $0.62 using the cost per click (CPC) data above.

Calculation: How Personalization Affects Your ROI

However, likely more important to you is your return on investment (ROI).

If you take a period of one year using the data above, the apparel company originally would have gained $194,928.20 in revenue and $191,808 in profit while spending $3120 on advertising.

With Intempt increasing the conversion rate to 2.1% while costing $500 per month (team plan), the revenue would be $204,674 and the profit $195,554.40 while spending $9120 on ads and personalization.

This means a plus of $3746.40 or 2% in profit for one year.

Calculate Your eCommerce ROI

You Spend Money To Get Visitors. Now Get Them Converted.

Analyze And Leverage Your Goals

Understand why and where your visitors don’t reach conversion goals and get them converted.

Increase Your ROI

Increase your conversion rate, revenue and profit while decreasing your CPA via rule-based and predictive on-site behavioural campaigns.

Create Powerful Personalization Campaigns

Easily segment and target your audiences, create content and stylings matching your website, run powerful campaigns and get insights via personalization analytics.

Our Customer Success Team Is Always Available

After deployment, a dedicated customer success team will assist you with creating and monitoring your campaigns.

Would This Pay Off? Calculate Your Revenue And Profit!

Calculate Your eCommerce ROI