When I was growing up, my friends wanted to be just like Mike, dropping 30 points per game. Or Barry Sanders, who averaged 128 rushing yards per game during the ’97 season. Me on the other hand? Well, I was slightly different.
I wanted to be Warren Buffett, the famed investor. As with Jordan or Sanders, Buffett clearly dominated his trade. But, what attracted me was Buffett’s track record. In the 50 years he has controlled Berkshire Hathaway, its market return has recorded a compound annual return of 21.6% versus 9.9% for the broad-based S&P 500. This equates into an overall return of 1,826,163% for Berkshire, as compared to 11,196% for the market. Now that is a record.
But, what does an investor’s success have to do with performance optimization? Well, a lot if you think about it, especially when it comes to maintaining your personalization and testing
process. Here’s why...
It’s all about the process
A little backstory: While my aspirations led me to understand how Buffett built his investing chops, I realized that he wasn’t the only phenomenon out there. Although there were fundamental value investors -- buy and hold types like Buffett -- there were also technical analysts and trend followers. There were traders who held long and short positions. In addition, there were quantitative funds that on average held positions for milliseconds. Ultimately, all these people were posting market and beating returns, yet there were few common traits on the surface. To distill it down to one point, it was all about the process.
A process is a documented set of consistently followed steps with the aim of reaching a particular result. Each successful investor or trader may have used a different method, but each stayed loyal to their particular process. Some periods it worked and some periods it didn’t, but long-term, the process was the key to outstanding performance. To put it in terms my friends may have understood: if Jordan’s drive didn’t result in points, or if Sander’s run was cut short, neither abandoned their honed process that had delivered. Today, we look at their careers positively, in part due to their process.
Building your personalization program around a process
So, what does this have to do with personalization? Well, this adhesion to process is always our first recommendation when we talk to clients about personalization and testing projects. The exact lines of the process will be unique to the individual needs of the client, but we know that spending the time upfront to lay down a well-defined process results in a firm foundation, which builds to a successful optimization program.
A process frames the decision-making required each time a campaign is executed. The process can answer which resources need to be involved, which test idea should be prioritized first, and which test was a success. The process focuses the team on the next required action, pushing the program forward.
Here’s an example: We were once tasked with helping a major retail operator to streamline their testing initiatives. However, one thing we discovered right off the bat was that the best tests needed to be run first to gain the most positive outcomes. So, we determined a process to uncover which tests were the most optimal. In essence, our team created a score methodology combining reach and impact, which would help us determine which test was “best”.
Once we had the "best" test, the process allowed for properly implementing the test. In addition, there was a QA component to make sure the user experience was not negatively impacted. The result? A testing program that has no failed tests -- because a failed test is only a test that you gain no insights from. But, can failure be beneficial in your process?
Why a failed process is a good thing
I often hear about failed tests or the fear of them. For example, a personalized offer or piece of content underperformed the default. Or, the hypothesis of an A/B test
was determined to be false. However, those aren’t examples of failed tests. Those tests yielded insights. Sure, the tests didn’t work about as expected, but that is always going to happen in some capacity. We test because we don’t know. A failed test or personalization project is one where we don’t know what happened. No insights. No useful results. A proper process prevents failure of that kind.
The same concept applies to Warren Buffett. His success was largely due to honing his process, which involved figuring out what works, what doesn’t, and where he needed to focus his energy. He probably failed a lot, but it’s applying your failures to your process which matters, not the failure itself.
Bringing it full circle
Focusing on your process should be your goal. Jordan did it. Sanders did it. Buffet still does it. Sure, these guys aren’t looking at data like we are, but their attitude towards their craft applies across the board: A well designed process will yield more wins, more consistently, and in the long run, more efficiently.
Want to be the next Jordan, Sanders, or Buffett of personalization? Contact us at email@example.com for more information!
Image courtesy of Benjamin Wachenje