As customers continue to demand more personalized and effortless experiences, there’s a growing importance for organizations to understand customer behavior and preferences. This requires data-driven decision making to inform customer journey and experience strategies to stay competitive. For that reason, organizations across all industries are looking to invest in journey analytics to gain more insight and optimize experiences more quickly.
With customer experience optimization leading the way in organizational priorities, businesses are looking for more robust analytics and testing than traditional A/B testing might provide.
Enter multivariate testing.
What is Multivariate Testing?
Multivariate testing (MVT) is a technique businesses use to test multiple variations of an interaction to determine which one performs the best. While most people know MVT to be used for traditional marketing tactics (i.e., A/B testing email templates for conversion), MVT’s capabilities far surpass that.
What’s the Difference Between Multivariate Testing and A/B Testing?
MVT and A/B testing are both experimentation methods used in marketing, product design and user experience research. The main difference between these two methods is the number of variables being tested.
A/B testing involves testing two versions of a single variable (A and B) against each other to determine which one performs better. This method is commonly used to test changes in headlines, copy, images or colors. For example, an e-commerce company may test two different versions of a product page, one with a red “buy” button and another with a green “buy” button, to see which one generates more sales.
MVT involves testing multiple variables simultaneously to determine which combination of variables produces the best results. This method is used when there are multiple variables that could affect customer behavior and it’s not clear which variable is most impactful. For example, a travel website may test several different combinations of flight prices, departure times and airlines to determine which combination produces the highest conversion rate.
MVT transcends A/B testing because it can optimize an entire experience. While A/B testing is traditionally used for simple use cases, MVT can test entire journeys against one another using machine learning. An example is testing whether SMS or email are more effective in engaging the customer. When you test these strategies, it enables adaptive learning to pick the winner and naturally flow customers to the “winning experience.”
How Can Multivariate Testing Be Used to Optimize Customer Experience?
MVT helps to optimize experiences at the journey, channel and action level using machine learning.
At the action level, by testing different variables that influence customer behavior and decision-making, businesses can identify the optimal combination of variables that lead to the desired customer action. Think of this as traditional marketing testing. For example, by testing different versions of a call-to-action button, businesses can identify the button that produces the most conversions.
At the channel level, MVT can be used to conduct channel-specific tests to identify the variables that are most important for each channel and optimize the experience accordingly. This is a more dynamic level of testing. Customers interact with businesses through multiple channels, and their experience across different channels can impact their overall perception of the brand. MVT can also conduct cross-channel tests, so businesses can identify the variables that impact customer experience across channels and optimize the customer experience to create a seamless and consistent experience across channels.
At the journey level, MVT can optimize the entire customer experience by identifying the most effective combination of variables that influence customer behavior throughout the customer journey. MVT can help to identify which journey touchpoints have the most significant impact on customer behavior. Additionally, by analyzing customer behavior data, machine learning algorithms can predict which variables are most likely to impact customer behavior at each touchpoint and recommend the most effective strategies to optimize the customer experience. At this level, cadence of communication and sentiment are optimized as well. For example, if you are selling an exclusive high-level offer, MVT can optimize the experience to ensure that the general tone of communication is delivered with excitement versus a collections reminder notice may be given with firm tone and sentiment.
Related Resource: State of the Customer Experience 2023 Report
What Are the Benefits of Multivariate Testing as It Relates to Customer Journeys?
MVT is important for customer journeys because it allows you to identify the most effective combination of touchpoints, messages and content across the entire customer journey. By testing multiple variations of different elements at each stage of the journey, you can determine which combination is most effective in driving conversions, retention and loyalty.
Here are specific reasons why multivariate testing is important for customer journeys:
1. Optimization of touchpoints
With MVT, you can identify the most effective combination of touchpoints to guide customers through each stage of the journey. For example, you can test different variations of landing pages, emails, text messages and content to determine which combination is most effective in driving engagement, retention and conversion.
MVT allows you to tailor the customer journey to each individual customer by testing different variations of content and messages. By understanding which combination is most effective for each customer segment, you can create a more personalized experience that resonates with their specific needs and preferences.
3. Continuous improvement
MVT enables you to continuously refine and optimize the customer journey over time. By regularly testing different variations, you can identify areas for improvement and implement changes that drive better results.
Related Blog: CX Is More Than Voice of Customer: Employees, Business and Process Need a Say, Too
How Is Traditional Marketing Multivariate Testing Different from Journey Orchestration Multivariate Testing?
The key difference between traditional marketing MVT and journey orchestration MVT is the scope of the testing and the level of personalization involved. Traditional marketing MVT typically focuses on testing different versions of individual elements within a campaign, such as the headline, images or call-to-action button. The goal is to determine which version of each element performs best in terms of generating clicks, conversions or other desired outcomes. This type of testing is often used to optimize individual campaigns or website pages.
Journey orchestration MVT, on the other hand, takes a broader approach by testing different versions of the entire customer journey. The testing covers the entire customer lifecycle from acquisition to retention, and engagement, not solely just conversion. Journey orchestration MVT takes test results from the traditional marketing process and leverages them in the engagement process (e.g., preferred channel, preferred product feature, etc.) This involves testing different touchpoints across multiple channels, such as email, app and website interactions, to determine which combination of touchpoints generates the best overall customer experience and desired outcomes. Rather than testing a single version of a campaign or website element, different versions of the journey are tested based on individual customer behavior, preferences and needs. This allows businesses to create highly personalized and intelligent journeys that are tailored to the needs of each individual customer and deliver results beyond campaign performance.
CSG Xponent: Experience Optimization Through Multivariate Testing
CSG Xponent’s journey analytics provides data-led actionable insights for a deeper understanding of customer interactions, helping you enhance customer journeys and overall CX, and expand customer lifetime value. Beyond just understanding traditional campaign performance, CSG Xponent takes multivariate testing a level deeper, analyzing customer interaction across a variety of channels, touchpoints and messages to drive customer action.
CSG Xponent can help you test:
- Which content is most engaging
- Which channel is most effective in reaching customers
- Which actions make the CX more effortless
- Entire journeys, to ensure return on investment
Not sure where to start?
Take advantage of CSG Xponent Ignite’s pre-built journeys for four industries: telecommunications, financial services, retail and healthcare to quickly see experience optimization in one or two journeys. Xponent Ignite includes powerful reporting and testing capabilities to help you improve journeys, overall CX and your company’s bottom line.
Contact us to learn more about how you can make your data more actionable and optimize the entire customer experience.