For Australian small and medium enterprises, the question isn’t *whether* to personalise marketing, but *how much* and what return on investment (ROI) we can realistically expect. Many businesses hesitate, assuming personalisation is complex and expensive. However, even small, well-executed personalisation efforts can deliver significant gains. We’re seeing a clear trend: customers increasingly expect experiences tailored to their needs, and businesses that deliver are rewarded with loyalty and increased revenue.

Let’s break down the ROI of personalisation. It’s not a single number, but a combination of improvements across key metrics. Here are some insights that matter:

• Increased Conversion Rates: Personalised website content, product recommendations, and email offers consistently outperform generic approaches. We typically see conversion rates lift by 5-15% with even basic personalisation – meaning more of your website visitors become paying customers.
• Higher Average Order Value (AOV): Recommending relevant products based on past purchases or browsing history encourages customers to add more items to their cart. This is a powerful tactic, and we’ve observed AOV increases of 10-20% for businesses effectively using product recommendations.
• Improved Customer Lifetime Value (CLTV): Personalisation fosters stronger customer relationships. When customers feel understood and valued, they’re more likely to return for repeat purchases and become brand advocates. A 5% increase in customer retention can boost profits by 25-95%, according to Bain & Company research.
• Enhanced Email Marketing Performance: Segmenting your email list and sending targeted messages – based on demographics, purchase history, or website behaviour – dramatically improves open rates, click-through rates, and ultimately, sales. Expect to see open rates increase by as much as 20% with personalised subject lines.

Calculating the precise ROI requires tracking. We recommend starting with A/B testing – comparing personalised experiences against generic ones. Focus on measuring the metrics above: conversion rates, AOV, CLTV, and email performance. Don’t get bogged down in complex attribution models initially; focus on clear, measurable improvements. As your personalisation efforts mature, you can refine your tracking and analysis.

The key takeaway is this: personalisation isn’t a ‘nice-to-have’ anymore, it’s a core driver of profitability. Start small, test frequently, and focus on delivering value to your customers. A simple next step is to review your existing customer data and identify opportunities to segment your audience for more targeted messaging.