Better A/B testing with a Customer Data Platform (CDP)

Why A/B testing is better with a CDP

Comprehensive Customer Insights

Client-side testing tools primarily focus on surface-level metrics such as click-through rates, bounce rates, and conversion rates. While these metrics are valuable, they often fail to provide a holistic view of the customer journey. A CDP, on the other hand, aggregates data from multiple sources, including web, mobile, email, and offline interactions. This unified view allows marketers to understand customer behaviour across all touch-points, leading to more informed and effective A/B tests.

Let's take a real example: imagine you, like many businesses, want to implement guest checkout. You find a provider such as PayPal and you build your guest checkout. You set up an A/B test to measure the impact of guest checkout on your purchase rate.

In many instances it's likely that a guest checkout will have a positive impact on your purchase rate. However, if you don't also retain a method of capturing guest customers into your marketing programme you may find that:

• You cannot communicate with customers of guest checkout in your CRM programme
• Customers of guest checkout are less loyal and return less
• You have fewer opportunities to up-sell to guest checkout users (often guest checkout is faster)
• Guest checkout users have lower average order values and lower lifetime values

Set up correctly, your CDP can tell you if these statements are true for your business. This might alert you to a hidden cost of implementing some features. In the case of guest checkout, you might modify the way you implement it to allow you to capture customers into a CRM programme and create up-sell opportunities throughout the checkout process.

It's not that guest checkout is always a bad idea! Sometimes it has excellent positive results. But like any feature you test, measuring the life of your customers will greatly improve your understanding of the feature.

Enhanced Segmentation and Personalisation

One of the key advantages of using a CDP is its ability to create detailed customer segments based on a wide range of attributes and behaviours. This granularity enables more precise targeting in A/B tests. For example, you can segment users based on their purchase history, browsing behaviour, or engagement with previous campaigns. By testing different variations on these specific segments, you can uncover insights that are more relevant and actionable.

You may be able to use this data to enhance your testing. For example: if you identify subsets of customers who regularly or always buy the same product catalogue (exclusively iPhones, or exclusively Android phones) you can experiment with tailored personalisation for those customers - showing them only the brand of phone that's relevant to them.

With a CDP you can do this based on the life of your customer, not just the last time they visited your website.

Real-Time Data and Faster Iterations

CDPs provide real-time data processing, which means you can monitor the performance of your A/B tests as they happen. This immediacy allows for quicker iterations and adjustments, ensuring that you can capitalise on successful variations and pivot away from underperforming ones without delay. In contrast, client-side tools often have a lag in data processing, which can slow down the optimisation process.

Deeper Behavioural Analysis

With a CDP, you can go beyond basic metrics and delve into deeper behavioural analysis. For instance, you can track the entire customer journey from the first touchpoint to conversion and beyond. This level of detail helps identify not just what changes work, but why they work. Understanding the underlying reasons behind user behavior can lead to more strategic decisions and long-term improvements.

For example: if your website's primary goal is to bring leads into the business, you might experiment with giving your customers more information about the process after becoming a lead. Client-side reporting tools may show this to be flat, or even worse, by discouraging customers who aren't ready to commit to the process. However, your CDP might show you that those who are ready - armed with better information about the process - are more committed and therefore more likely to complete, becoming a much higher quality lead.

Integration with Other Marketing Tools

CDPs are designed to integrate seamlessly with other marketing tools and platforms. This interoperability means you can combine A/B testing data with insights from CRM systems, email marketing platforms, and more. Such integration provides a more comprehensive understanding of your marketing efforts and their impact on the customer journey.

CRM testing

Another incredible feature of great CDPs is that A/B testing is built into the platform. This allows you to test single aspects, sub-sections, or entire journeys in your CRM programme.

Let's take a classic example: abandoned basked campaigns. A classic conundrum with these campaigns is whether to, and if so, how much to offer customers as a voucher to complete their basket. Too much and you could be wasting margin. To little and you could be wasting conversions.

With a CDP you can test offering customers a completely voucher-free journey, against one with 5%, 10% and even 15%. You could also test timing the discounts by offering 5% in your first email, 10% in your second, and 15% in your "last chance" email.

With revenue tracking you'll be able to see which journey yields the greatest return by balancing conversion rate and AOV.

Conclusion

While client-side testing tools and analytics have their place, the addition of a Customer Data Platform can elevate your A/B testing strategy to new heights. By providing a more comprehensive view of the customer journey, enabling detailed segmentation, offering real-time data, and facilitating deeper behavioural analysis, a CDP ensures that your A/B tests are more insightful and impactful. Embrace the power of a CDP to unlock the full potential of your A/B testing efforts and drive better business outcomes.

Pathway can help!

We have experience in mapping customer journeys, improving and testing on-site UX, and in CDP set up and strategy. All the ingredients to help you maximise the value of your customers.

Get in touch today to see how we can help you.