David Mannheim, author and expert on personalization, discusses the importance of personalization in marketing. He emphasizes the need for brands to focus on building relationships with customers based on trust and care. Mannheim distinguishes personalization from segmentation, highlighting personalization as a communication principle rather than just a marketing tactic. He also mentions the challenges faced in implementing personalization, such as the pressure for immediate returns and the balance of metrics.
David Mannheim 0:00
You know, Netflix when they first created their advertising campaign, they were promoting a CPM $65 that is higher than the 2022 Superbowl. And the reason why is because they can personalize they know that if you’re, you know of this certain demographic, you’re gonna like Breaking Bad.
Khalil Guliwala 0:19
Welcome to another episode of exterminations podcasts today we have the amazing David Manheim with us. He’s an incredible book all the first edition paradox talks about how companies are trying to get a bit more personalized when it comes to talking to their customers. If you grew up with Disney, and has been a huge part of your childhood, you’re gonna love this book. There’s so much love and care. And David is doing an incredible job. Just making personalization a bit more personal. David, welcome to the podcast. Thanks very much. This is a really good intro. Really good.
David Mannheim 0:49
I don’t know what else to add. Yeah, I mean, it’s funny incident when people come on podcasts or what have you, they tend to talk about the credibility or their acknowledgement or something to demonstrate some kind of authority. When really, if we’re talking about personalization, we should be personal. So yeah, so I’ll admit, you know, I get anxious, quite a lot about panic attacks in my past. I, I prefer to have few friends rather than lots of friends. And I’m the kid I love this knee. There’s probably the things that define me the most anyways.
Khalil Guliwala 1:19
Yeah, yeah. Speaking of Disney talking about your book, you talk about epiphany, you had kind of a waiting line at Disney. Could you talk a little bit more about that? Because I’m sure I’m sure waiting in line of Disney cause a lot of self reflection.
David Mannheim 1:30
I mean, when do you not wait in line? So I’ve been going to Disney? I mean, a soccer fan, right? So I can go 3535 times. I’m 36 years old. And it’s one year you can probably guess what year that is. Which sucks. But hey, you know, first of all problems, and been so brand loyal to this brand that I am. I absolutely adore. I remember waiting in this line, we have a ride in the Magic Kingdom called monsters in life law. And it’s supposed to make you laugh. And there’s a two hour queue for what is essentially like a 60 mile it’s a bit longer like a 92nd show. And I thought to myself, What am I doing his office, this epiphany of, I think many 35 years, I still have to, I still have to stand in queue for two hours. And I feel like I’m about to buy a $70 piece of merchandise and get overcharged for a $4 soda. I felt at that moment in time, like just a number. And not a person. It’s almost as though my brand loyalty to Disney felt nothing. And if you notice that about what’s happened with Disney theme parks recently, it feels as though they’re extracting value. They’re not adding it nickel and diming. The guests really that’s what they call us. They call us guests. And I didn’t feel like a guest. You know, I felt like a number. And so I came back to England, penniless after that trip, and decided to just ask a few people like how how do brands make you feel, you know, is personalization is being personable? I think anymore? Because in my experience, especially Disney, unfortunately, it wasn’t. That doesn’t mean so I’m going to Disney. I’m going in a few months. But like I say sick of fun. So
Khalil Guliwala 3:11
I think first of all, and so talk about centering. So you guys are perfectly waiting a Disney and so does the idea of a book come right away. Because imagine like, you know, working with CRO and Keratoconic Whoa, what was that process of someone doing CRO to produce a book about personalization?
David Mannheim 3:27
I think it’s grown over time. That’s probably the catalyst more than an epiphany. I mean, in CRO I, I don’t know how fellow CRO s think. But I feel as though this is this whole debate of you know, conversion rate optimization, the title, we’re optimizing our conversion rate. And it feels in a really large, quite, quite generic and aggregated. Okay, this conversion rate figure feels retrospectively it feels binary, you know, yes or no? Did they convert? It feels incredibly average, which I’m sure all your listeners already know. yet. We still talk about that figure infinitely. We still talk about the solutions to address that figure in equally generic terms PDP PRP, the location of the solution rather than the solution itself. And it feels backwards, it feels generic, it feels as though the solution to all this is personalization. But then, what is personalization? Do people understand it? Why do we is there a difference between segmentation and personalization? Why are we still abiding by this conversion rate figure optimizing for the for for the for the mass, rather than focusing on the few focus more focus creates more impact. And it’s it’s this that I just found really fascinating. And flip to that the paradox of which is everybody says they want to do it this this perpetual hike every year is the year of personalization. But no year is it’s never been real. Is the past 20 years of personalization become a thing? So what what’s preventing that? You know? So this all led me on a journey of asking a bunch of fabulous minds in the industry of what the hell is going on with personalization.
Khalil Guliwala 5:16
Brilliant in terms of like the different people that I mean, you’ve got some really interesting people you’ve interviewed in there. Because you may talk about sort of, you know, a quack who was, which was the interview that really gave me insight that you didn’t have before?
David Mannheim 5:30
I don’t know. But what I do know is that so there were 153 in total. And it almost felt like it never never ended. I was doing it well, you know, 18 months in advance. My first interview was Pet Pet lawyer. I remember, I think I was his first customer for CSL Institute. He called me out on LinkedIn post ages ago. So I thought it was only fitting for him to be my first interviewee. So there was that, but terms of where the like, what was the one creative thing? I don’t know that lots of people are very different, different opinions, which I found fascinating. But because of that, there wasn’t I didn’t really reach a bell curve. Until about 100 people in I found that fascinating. So I generally just asked a couple of questions, which is what is your relationship like with personalization? And who does it well, and then dovetailed from there? And it wasn’t until about 100 or so interviews in that I started to get some real, like very, very similar answers and themes where it became not repetitive, but quite quite generalized. You know, I could easily bucket people. Yeah, yeah. And that’s a lot, right. That’s a lot of interviews, to usually, you know, sample size of 10 or 20, or maybe 30 to 50 might get you that bell curve, but I was, it took me a good 100 it might be me, my lack of interpretation and stupidity. But I sense it’s just the topic is so complex. And that that hindered me if anything, because structuring a book you’re writing 80,000 words on on such a complex topic is like, like writing a couple of paragraphs on creativity. It almost doesn’t do it justice. It’s such a complex concept isn’t a theory or thing. How do you put that into words and structure your thoughts around that I find that really difficult
Khalil Guliwala 7:24
as a reader the idea that you find it difficult to put into words is did not come across it’s a fun read. It’s a good read. I think that the other element is well i That’s I want to wonder like it you know, when it came to, we always think about like we you know, we think of sometimes I’ve read personas when customers so tell me your writing it like was there any personalization in terms of like, did you have a end reader mind and end user in mind when it came to your book? Like, like, what was the process of you personalizing your content?
David Mannheim 7:53
You know, ironically, it was the opposite. I felt like it’s almost the mass audience, which is really ironic. But what I wanted to do was it just like coming on on this podcast and saying it feels silly for me not to be personal. When talking about personalization, I felt the same within the book. You know, I’m a big kid. I’m quite satirical and pithy. I love comedians like Bo Burnham and Tim Minchin I love writings and thoughts of say, Scott Scott Galloway, who are slightly more pessimistic or cynical about the world. And that’s me, and it felt irresponsible for me to not be personal within this book. So I talk about destiny a lot. I talk about stories and knights and dragons, and it sounds really stupid and talking about out loud, I know. But it felt it felt like it had to be an extension of myself. I don’t know how you feel. But you know, reading all these books here. A lot of them are very dry, very practical marketing books. And it’s just not the type of person that I am. So it feels incongruent. For me to write something like that. I’d much rather write something that is evidently filled with track. Great.
Rommil Santiago 9:17
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Khalil Guliwala 9:30
I speaking of dragons, in your book, you have a section where you talk about sort of these three dragons. Could you could you tell your OBD audience about that?
David Mannheim 9:37
Yeah, there are different names. I took them out so they want to be liable for anything. So these three dragons are the dragons that stand in our way of success, basically, what I call the personalisation Paradise, and the dragons are the golden dragon. This is the big commercial. This is smoke from Lord of the Rings. There’s a big commercial dragon that says I want my money. I want it now. And immediately, I demand a return on investment. I think it’s the commercial draggable dragon that really prevents us from thinking about personalization, the way that we should be, you know, these intangible feelings of relationship and trust, how do you put a value are me saying, Oh, I really like your hair, you know, you’ve got really you do you have a really good hairline, you know that those are, those are really nice feelings, rather than me trying to immediately sell you some finish of sugar product on your friend. So the commercial Dragon is the biggest of all. And then there is the the the technological and data dragon. These are the most commonly cited reasons why personalization is prevented from reaching this paradise. It’s where an over reliance on technology or an assumption that technology will get into the narrative that AI will be the Lord and Savior to us all, or the data side of, of the very same Dragon, which is one where I need all the data and a single view of the customer in order to even start personalization. And again, an over reliance on that data or a debt using data as an excuse to not personalize because let’s be honest, the collection, the management, the integration, the accessibility of it, or the regulation, not to mention is a minefield. And third, and finally, the third Dragon, who I think is not necessarily the biggest dragon, but certainly the one that is the toughest to defeat is what I call the deep fake dragon. As one way you don’t know whether it’s quite human or or not. And this is where it’s really very ironically, a site that we need to put the person back into personalization. Yet it’s also the person in personalization that prevents us from reaching the personalization paradise. There’s a lot of alliterations in this book. And what I mean by that is that we need to be more human, in how we personalize mentioning hairlines or whatever it might be. But it is also the individual that is personalizing to other people, that prevents us from achieving success. It is a combination of ego and greed, a lack of a lack of cohesion silos within either physical silos or mental silos is this discussion of the value doesn’t quite match the effort. And it’s a fascinating is a fascinating world world to explore that came up a lot. Within a lot of my interviews, ironically, the the concepts of V, ego and greed, cynicism, I say, I think Mark hibersap Creative CX called said that people can have like an element of PTSD, after they’ve implemented personalization, because it doesn’t quite live up to their expectations. And the difference to the you know, the, the, the definition of happiness is just the difference of what was my expectation now to what reality actually is, you know, if it’s above that expectation, then I’m happy if it’s below that expectation, then we’re unhappy. So the trick is to remove expectations or make them more realistic. And unfortunately, you know, vendors agencies, they don’t do a very good job at that, because they are quite self serving. I know I am one. And even when they sell their products to the market, you know, get 500% uplift here. Well, it’s it’s like buying a new car, you know, you you always know that you see images of middle aged white men driving in the hills. On a sunny afternoon listen to Ed Sheeran, but after a week that new car smell is gone. And the kids are kicking the backseat of your car and screaming at you. Reality sets. So yeah, so the the three dragons are basically the golden dragon over the commercial on the technology and data Dragon The to offer most scientists reasons, and the deep fake dragon my really it’s the the human that prevents the reaching that that paradise.
Khalil Guliwala 14:02
You know, I think I think what you’re what you’re talking about is so important. The fact that it’s also that element of being that PTSD of the fact that personalization, you know, we we talk so much about personalization, and you go into place you work on it, and then maybe it doesn’t meet reality. And then you say, well, what’s the next state? What’s the next step? And so maybe, so maybe I’m gonna have to just maybe have a bit of clarification for the audience. So you making the point that they make the point that personalization is a dead end, a person is personalization needs to be done differently.
David Mannheim 14:32
Oh, no, absolutely needs to be done differently. There’s no, there’s no, the whole premise of my book is that I absolutely see a way out of all of this. But unfortunately, in an overly commercial world that is driven by data and the run more and more by computers. I feel like it’s gonna take some big catalyst to get us out of that. And there are three things that give me hope. The first of which is the pandemic was cited as a catalyst. You know, it helped QR code So we’re gonna say can help us. The second of which is data regulation, you know, the more and more that comes into force, I think that’s a good thing. You’re putting more control back into the customers into our hands away from the retailers, it’s less about, if I’m a retailer, it’s less about how I can get data from you more how I can work with you with your with your information. I think that’s a beautiful, beautiful relationship. When it comes to personalization, and the second of which is AI. One of the most common sites of reasons like I mentioned is is, is that the effort doesn’t quite match the value. Think about the mental effort required, this was cited quite a lot as well, where I’d much rather focus on 100% of my traffic and then 10% in traffic is easy to get a 1% uplift on 100% on traffic, then an equivalent 10% uplift on my 10% of traffic. Okay, to get the same, the same level of value. AI is definitely making that easier. There’s no question about that. And I think that will accelerate more and more people will retailers with more more brands into this field of personalization. And I think they’ll get more success from it. It’s just ironically, I feel that it’s a rather like introspective question. By becoming more impersonal, between human and computer. Are we? Are we removing personalization? It’s almost like the personal is becoming more impersonal. We’re almost segregating ourselves as humans. So I find that fascinating. But yeah, it’s definitely not a dead end. There’s no question I actually see the opposite. I see more hope. Just for reference, one of the reasons why I see more hope is it’s ironically, it’s money. Yeah, we know full well that more targeted advertising works better than the alternative. And the money is in in the advertising. You look at the the streamers, you know, of, of Netflix and Disney, how they’re, they’re now promoting ads. And, you know, Netflix, when they first created their advertising campaign, they were promoting a CPS $65 that is higher than the 2022 Super Bowl. And the reason why is because they can personalize, they know that if you’re, you know, of this certain demographic, you’re going to like Breaking Bad, but not not just that you’re going to relate to water. Why? Because your psychographic suggest that you’re more lonely, and you feel a loss for the world. And not only that, but it’s at an episodic level. So I won’t give away spoilers, but you know, you might like flies for those who know the fly episode or whatever it might be. So yeah, I, I see a lot of hope. For the future of personalization, I just think there needs to be a reframing, or not forgetting the first three syllables of personalization being personal.
Khalil Guliwala 17:50
Yeah, I think you know, I think kind of for what I loved about Dave was you also kind of sketching out kind of like where we are and kind of where we’re headed. But more importantly, where we should be heading to. I think that’s like a huge part of this. One thing I will check with you in is that is that you also talked about this kind of a lot, as we know, we conflate personalization with segmentation. So could you maybe share a little bit more sort of like, you know, oh, it goes, in some sense? How are these two things distinct? And why are people kind of confusing them with each other?
David Mannheim 18:21
Yeah, so it’s a really good question. So that there is this scale right of one tool and One to One to One over here. And in between, you’ve got one too many one too few. And I think the the ones are few is segmentation. The one to one, sorry, the one to all is just advertising. The one to many is optimization, that wants a few segmentation on the one to one, usually classified as some kind of personalization, although I personally wouldn’t classify it as that. And the difference between segmentation and personalization, I think, I think there’s quite a few. So first of all, it’s worthy of noting that there is a difference. And the reason why there’s a difference, there’s been a few empirical research studies that have been done on this, that basically cite the difference between the two is the lack of contextualized data. So a segment is somebody or a group or cluster of people that you don’t hold a lot of context about. And in within their in moment, thought so an example that I think thought works, the consultancy, gave was if I’m looking at buying microwaves you might provide you might provide me in microwave, a microwave dish. That is a form of segmentation, because you know that I’m in the microwave category, but it lacks any context about why I might want do I need that microwave dish, you don’t understand the customer’s intent. I think that’s one of the core differences. I think the second biggest difference is I don’t see them as I don’t see them as similar. I see a personalization as more of a communication principle than a than a marketing one. If that makes sense. If you bear with me, what I mean by that Is that experimentation, optimization segmentation are all four ways of doing things. They’re almost like disciplines. Feel free to come at me with your pitchforks, but I’ll die on this hill. And I see, personalization is slightly more ethereal than that slightly more conceptual, it’s more of a communication principle, I’m being more personable with you. It doesn’t matter whether I do that at a segmented level or an optimized level, or an individual level or a mass level. I’m trying to acknowledge you, and be familiar with you, and help you and care for you, and create a relationship with you one that’s based on mutual trust. For me, that is, that’s personalization. It’s all about creating a relationship built on mutual trust. And for me, that’s why it’s more more of a communication principle than a than a marketing discipline,
Khalil Guliwala 20:50
saying, I think what I love to be tied into is that in your book, you talk about sort of the care competency index, I think, I don’t think so. Could you could you maybe tell me, let me share that share that concept with the with the podcast as well, I think it ties perfectly into what you’re just talking about.
David Mannheim 21:04
Yeah. So So I must admit, it’s not my concept is there’s a book somewhere, come by two researchers, Malone first, and they wrote something called the human brand book called The human brain. And they try to identify as humans, what makes us trust one another. And they try to relate that to brands. So between a human brand relationship, what, what are the prerequisites of trust? And they identified and axes have to care? And competency? Can you help on? Will you help? And they go into all sorts of reasons why the fact that care is actually one of the biggest prerequisites and trust that accounts for 60% of all how we as humans trust each other. So for example, if you saw a person in a dark alley, Harry Potter style, walking down the street at you, you thinking, okay, can this person hurt me? And will this person hurt me, that’s obviously the other end of it. And the two are not mutually exclusive. So for example, when you when you you know, a Christmas, you get your nan to get you your language, your Christmas sweater, with a cat, your cat on it. And it’s bloody ugly, and you know, for well, it’s gonna get really gifted. That’s a factor of care, but not competency. She’s, you know, she wants to help, but she just can’t help she’s just inadequate at buying such gifts. And it’s my hypotheses that as brands we over indexing competency, can you help? And under index in care will you have and the reasons why simply the competency is easier to to replicate to simulate, and it has a return value against it. So that’s why you see Amazon do so well. Is that bad boy, are they competent, great customer service, breadth of product, great recommendations, yada, yada, yada. They try to help Gothic, they just won’t help they don’t demonstrate a level of cow what Malone and fiscal is warm. That personal feeling? How have like a branded experience. It is a reason why, when there’s optimizers, we all sit in boardrooms and Unifor Well, usually the oldest person in the boardroom will say, what’s it like in install, though? You know, how can we replicate the in store experience, and there’s a reason why you can’t replicate it or you want to replicate it is because it lacks care. The to the difference between online and offline is the absence of care or the the difficulty of simulating care. So that’s the you know, it’s a concept by Malone. And first, but it’s something that I feel is so closely tied towards personalization and being personal with one another, because it is a factor A prerequisite of trust, which is a prerequisite of having a relationship Forum, which is a prerequisite of a cow lifetime value. customer centricity.
Khalil Guliwala 23:58
Yeah. Speaking of carrying trust, oh, God, maybe you know, like, some, I always think of like, tips of low hanging fruit like, and I know, maybe we may go against of the spirit of what you’re saying about being personal. But maybe they’re low ground meaning of someone wanting to get a bit more personal and put the person in the center. Why don’t we quick things that they could start doing to to show that they care?
David Mannheim 24:22
Well, I think the big the biggest blocker, and I’m gonna give an example. So I think the biggest blocker is the need for an immediate tangible return on your investment. It is very, it’s almost impossible to demonstrate a level of care without increased effort. Usually, that means more resource, and usually that means more more cost. So if I want to demonstrate care, how can I prove the value of that back to my my boss or a line item in a spreadsheet? It’s nearly impossible. And that is one of the biggest blockers I feel that we can’t or don’t simulate care. But an example of a company that I think did it really well as a single sample is bloomin wild, the flower retailer in the UK where they they created what they call the footfall marketing movement, which is a on Mother’s Day, they allowed their users to opt out of communication from a Mother’s Day, Mother’s Day advertising both on site and an email in the hope or the vein or the expectation that it’s quite triggering to some people to receive a Mother’s Day email when unfortunately, you may not have a mother, you’ve lost a loved one. And rather than have the approach of a maca, mass acquisition of all, and we’ll see, we’ll know we’ll get a reduced click through rate. How about the alternative of understanding your audience’s mindset, their context, their situation, their intent, and having a thought process of focus is more or focus? Not more isn’t more acquisition is not sexier than retention, despite what we’re told. More focus equals more impact. And that’s exactly what blue Manuel did. And I think it’s something that we should all we should all learn from I think that’s a marker of care over competency.
Khalil Guliwala 26:06
I think that ties in something that you previously said is that, you know, on one hand, do you choose this or that spectrum is between being personalized to everybody? I mean, personalized to a very few. And then if and finding that spot within that, within that spectrum. Yeah, you’re gonna choose what you want to focus on?
David Mannheim 26:23
Yeah, absolutely. I would just try and reframe the conversation of personalization. For me, it’s not a marketing discipline, it’s not an additional tactical add on person, or team or, or recommendations engine that you just plunk on your website. It is a communication principle. Those companies that will succeed in personalization are one where there’s a genuine purpose behind it, and authentic reason as to why you’re personalizing. And the answer for reference is not because you’ll get more money. It is because it will get as close to our our customers, or our customers need more relevancy in our life, or more resonation with what we’re selling to them. So that that’s the way I would think about it.
Khalil Guliwala 27:07
Yeah, I think and then tying that back to that image of the Golden Dragon. I think that’s why I love that image. Again, you know, one of the nice things about the book is, is not just it’s the love is the care. It’s the pawns deliberations. But also it’s also the vivid imagery. And seeing that golden dragon, you see gold and you and you understand what smug you know, but the goal, and the idea is that that focus on immediate ROI, they focus immediate focus on revenue, or even just revenue versus understanding the customers as actually what could be the biggest blocker here.
David Mannheim 27:38
Yeah. And who knows where I’m living in Cuckooland. I, to be fair, I acknowledge that I give you examples of how Marks and Spencer, for example, when they were starting their personalization program, you know, they went to their board, their FDA to say, Okay, here’s the return on investment. So if 70 to one ROI, or whatever, whatever it was. And they did all the research and everything they’ve benchmarked against sort of academic studies and case studies, which we know, let’s be honest, are largely self serving. And they found that the board kind of laughed them out of the room, and not to that much of an extent. And they told them to go away, it was unrealistic. I didn’t believe your expectation. So instead of that next time, when they went back to the board, instead of focusing just on that the one thing at a revenue, they focused on this balance of metrics. They have what’s called like their Bullseye platform, for example, which Alex Williams has, has shown me and talks about in great detail. And they use the Adobe Suite. And that balance of metrics that isn’t just solely focused on revenue, is what got them over the hump. I’ve been able to successfully implement a personalization platform that has done really well for that allow them to purchase thread.com, for example, their recommendation algorithm of which they call thimble. And so they’ve done really well. But their example isn’t that way. You need a balance of metrics, not just a myopic focus on a single metric. It’s a balance.
Khalil Guliwala 29:03
Yeah, yeah. And speaking of balance, I mean, you know, here you are, you’re working in CRO, you’ve just written a book, but you also got a software coming up that deals with personalization. Could you talk a little bit more about that?
David Mannheim 29:15
Yeah. So it’s, it’s called neighborhood 10. I think in writing, you know, the book and the business I very different from one another. And the two are mutually exclusive. But one of the things that I’ve been laboring on for quite some time is this concept of intent. I’m a big football fan. And there’s a concept known as expected goals. And what expected goals was introduced back in 2012 2012, or is designed to do is to help you understand in a football match the quality of the chances that are created not the quantity, but the quality, and they use all sorts of regression analysis to understand the possession of play, the angle of the shot, the distance of the shot, and the market. is a score of more than 10. So it’s it’s a predictive metric, not a retrospective one. And they did that, to combat the aggregation that affordable football match had. IE is one mil to Chelsea is five nil to Manchester United, I hope. And that isn’t a marker of quality. It’s a marker of results, not necessarily performance, United could have overperformed, Chelsea could have over performed. And so I think we can bring that that notion to the world of E commerce. So in fact, we have done by understanding, expected conversion, not actual conversion, by understanding the quality of your truck traffic and composition of your traffic. By understanding customer intent, we can then personalize effectively, we can understand the quality of our traffic, not just the quantity of the results. So our software comes out mid June will be the first MVP to 10 data clients and will allow retailers to understand the intent of their visitors.
Khalil Guliwala 31:02
It’s cool, but yeah, sounds like it. But you know, I mean, just just Yeah, excited by that. There isn’t thank you so much for being on our episode today. You know, you know if there’s if anybody who wants to find out more about you find out about your book or your software, where could they find out more about you?
David Mannheim 31:19
I’ve just LinkedIn probably how long was ranting and raving about something. And my book comes out late July there is like a newsletter that you can sign up to. There’s over 1000 people on there, which is really humbling and equally anxiety inducing. So yeah, it’s gonna be a bumpy ride.
Khalil Guliwala 31:36
Now, well, I wish you nothing but the best. And yeah, thank you so much for joining us today. David.
David Mannheim 31:44
Thank you. Appreciate it.
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