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The positive loop of personalization through loyalty

Teppo Halonen

The business case for investing in personalization has a simple proven formula. Personalization impacts the conversion rate and average customer value. The customers who complete transactions will be more likely to return and share their experiences – and become loyal. Frosmo gets customers into the positive loop of personalization business value that drives accelerated compound impact. The loyalty improvement is the “interest on interest” in personalization ROI.

personalization business value formula

The key business objectives and use cases for personalization vary between industries. In media, the key measure of success may be the engagement of visitors and the number of pages viewed. In retail, the average order value is the key measure and in travel, profitability is driven through maximizing sales of ancillary services. iGaming typically focuses on the number of games played per session, deposits, and loyalty.

Irrespective of the industry, Frosmo customers have a focus on personalization in their digital service to:

  • Improve the convenience of actions
  • Make it faster and easier to discover products and services
  • Create a dynamic ability to drive targeted promotions and campaigns
  • Inviting the visitor to interact with and purchase additional products or higher value items
  • Experiment with alternative approaches to find the most impactful experience

Improvements in these areas impact key KPIs:

  • Improved conversion rates and online revenues
  • Reduced bounce rates
  • Number of items bought (or interacted with)
  • The average value of items bought (or interacted with)
industry KPIs personalization

In omnichannel businesses, many customer journeys might begin online and lead to in-store purchases – or even the other way around. The correlations and KPIs get slightly harder to measure, but the same basic principles still apply. These lead to increased revenues and profit (assuming pricing, performance, availability, shipping, assortment, etc. are up to par).

The positive experience (that in the first place led to the visitor’s transaction) in the service consequently increases loyalty and word of mouth based brand recognition.

Positive loop of personalization value

The satisfied customers (and even their friends) typically return and create repeat business. This takes the pressure and costs away from customer acquisition through advertising as the lifetime value of customers increases and more businesses are created through referrals.  The positive loop of personalization value is born.

The positive loop of personalization value

Also, the inverse is true: when the personalized user experience is not there, conversions go down, the bounce rate increases, the average order value doesn’t grow, and loyalty doesn’t increase – more resources need to be used on customer acquisition and profit margin decreases. We get into the negative spiral of generic experience.

Accomplishing a personalized experience takes effort and focus

Implementing personalized experiences through custom code or spot solutions for e.g. testing or recommendations may lead to a spiraling cost in R&D and service infrastructure, without providing the agility and velocity that the modern marketing teams are looking for.

Frosmo’s versatile personalization software not only solves the challenge of implementing a personalized experience to start the positive loop of personalization value but also makes the experiment – optimize – personalize cycle fast and easy. Constantly delivering the best experience can now be done with speed and agility. This further accelerates the compound effect in the positive loop of business value.

You can also watch this webinar as Frosmo experts explore the fundamentals of personalization, walk you through the key elements of the customer journey and show you how to leverage this strategy in creating a customer-centric experience for your customers.

Are you ready to start your personalization journey?

About the writer: 

Teppo resized

Teppo Halonen has been leading sales teams in services and technology for past 15 years. He started his career in business development as the VP for sales working with different service providers in Europe. With a solid understanding of technology and software, and a strong educational background in computer science, his approach to leadership is based on transparency, teamwork, individual accountability, commitment, and integrity.