How Does Personalization Fit Into Your Overall Marketing Strategy?By Ricardo Bueno
Let’s say your business makes $1 million a year.
How could you add another $100,000 in revenue next year?
There is no one right answer.
- Increase prices by 10%. But that might hurt overall sales, and possibly cause you to lose more money next year.
- Increase your average order value by 10% – that should do it, right?
- You could get more existing customers to come back for more.(It’s generally easier to sell more to an existing customer vs. getting a new customer.)
- You could increase the number of customers you have by 10%.
- ...This could mean getting more qualified traffic to your website.
- ...Or increasing the number of visitors who subscribe to your list or download a lead magnet.
- ...Or getting more subscribers to turn into customers.
And things get really interesting when you start to think about how the different stages of your funnel compound...
5% new visitors + 5% more visitors turning into subscribers + 5% more subscribers turning into customers + 5% more customer buying more…
What sort of impact would that cross-funnel lift have?
Here’s a hypothetical:
A business that does $1 million a year might do that by having 1,000 people pay $1,000. To get those 1,000 customers (10% customer conversion rate), that might have required 10,000 subscribers (5% opt-in rate), which might have meant 200,000 visitors.
200,000 visitors + 5% more visitors = 210,000 visitors
210,000 visitors + 5% more subscribers (5.25% opt-in rate) = 11,025 subscribers
11,025 subscribers + 5% more customers (10.5% customer conversion rate) = 1,158 customers
1,158 customers + 5% more revenue/customer ($1,050) = $1,215,900
Or a 21.5% increase in top-line revenue.
Not too bad, especially considering that increasing the performance of each step of your funnel by 5% isn’t too terribly difficult.
So, how does personalization fit into your funnel?
There are a lot of things you could do to increase funnel performance:
- Run A/B tests until you come up with stronger headlines, supporting copy, CTA’s, etc.
- Use Chatbots to let prospects ask questions directly before they buy.
- Invest in better email marketing automation software and workflows.
- Redesign the entire customer experience with conversion in mind.
- Perform an SEO audit and optimize your site structure, keywords, etc.
Overwhelming, isn’t it?
Some of these only apply to certain stages of your funnel. Others are experiments that may or may not work in your favor. And many will take time to see any results.
What could you do that has a low effort-to-impact ratio?
Here’s what I mean by that:
What can you do that will take a relatively little amount of time and get you the biggest possible results?
I love revenue-raising projects that meet the following criteria:
- Minimal upfront time required (rules out redesigns or automation overhauls)
- Barely any ongoing effort required (rules out chat widgets)
- Immediate ROI (rules out A/B testing or SEO changes)
Personalized content ticks all the requirements:
- Using software like RightMessage to create a campaign that swaps out headlines, supporting copy, testimonials, and call-to-actions based on visitor data can generally be done in less than an hour.
- Personalization is a layer that sits on top of your existing sales copy. Once it’s there, it continues to do it’s thing 24/7/365.
- More specific content is always more effective than general copy and content. Unlike A/B testing, which requires you make a guess about whether headline A will outperform headline B, specific headline A tends to immediately outperform general headline B.
And personalization can affect all stages of your funnel:
- You can use dynamic lead magnets to get more visitors to turn into subscribers.
- You can personalize email messaging to lower the likelihood that your subscribers churn out (unsubscribe) by making your emails more relevant to them.
- Personalized pitch sequences (over email) do really well at grabbing people’s attention and getting them more likely to click through to your sales pages.
- Done right, a sales page that tailors a minimal amount of content (headlines, testimonials, etc) to make the reader more likely to think “this product/service is designed for me!” drastically increases conversions (for one of our campaigns, we saw 70% more sales after implementing this.)
- Dynamic call-to-actions on your website that are relational and take into account what a customer has already bought allows you to passively and continuously promote relevant and recommended products to your subscribers.
Taken as a whole, implementing the above is a lot of work.
But each of the above items affects a single part of your funnel, and each stage can be implemented piecemeal.
For example, let’s say you spend 20 minutes implementing a simple personalization campaign that tweaks the language of your lead magnets depending on the landing page or referrer of the visitor.
Assume this increases opt-in rates by 10% (it’s generally higher, but let’s err conservative.)
OK, so 10% more anonymous people who hit your site are opting in.
But what financial effect is that going to have on your business?
Well, to figure that out you’re going to figure out the value for each stage of your funnel.
Here are two examples of how a funnel can be reversed engineered:
EXAMPLE A: Web Design Company
A web design company sells redesigns. Last year, they did $300,000 in revenue. The average price of a redesign is $10,000. Rarely does a customer ever rehire the company, so all value is captured through that first sale.
30% of project leads become customers. This means that a project lead is worth $3,000.
Most leads come via webinars. People register for a webinar, attend, and then some of them end up reaching out about a project. Assume 5% of webinar attendees become a project lead, meaning that an attendee is valued at $150.
The company runs paid ads and direct outreach to get prospects to attend their webinars. 20% of people who click through to their webinar registration page register. This means a page view is worth $30.
Lots of numbers, but let’s break it down and see what effect a 5% lift in registrations (thanks to landing page personalization) would have:
The value per page view would go from $30 to $33.
Since they brought in $300,000 in revenue last year, that implies they had 1,000 people who viewed their webinar registration page.
That one improvement – a personalization campaign that would take less than an hour to implement – would cause the next 1,000 page views to generate $330,000 in revenue, a 10%, or $30,000, improvement.
EXAMPLE B: Subscription Software Company
A software-as-a-service company charges an average of $99/mo for their software. Their average customer stays around for 18 months, yielding an average customer value (cLTV) of $1,782.
While they get some direct signups to trial from their marketing site, they also get a lot of customers who first show up on their blog. (They rank well for a lot of project management keywords.)
2% of people who opt-in on the blog end up eventually becoming a customer, making a subscriber worth about $36.
And 2% of visitors to the blog opt-in, valuing a blog visitor at $0.72.
Assume all we’re doing is changing the opt-in for anonymous visitors to reflect the kind of content they’ve been consuming, the type of website that referred them, or the topic of the original landing page that Google referred them to (giving us an idea of what they were searching for.)
A 10% increase would mean 2.2% of visitors are now opting in, increasing the value per visitor to $0.79.
For every 100,000 visitors to their blog, 200 more people are opting in at 2.2% vs 2%. This equates to 4 new customers (since 2% of blog subscribers buy), or $7,128 in new revenue per 100k visitors.
A Challenge for You!
I want to challenge you to do two things.
It doesn’t matter if you’re a small consulting company or a large e-commerce retailer, you have a funnel and your funnel can be broken down and priced.
Here they are:
Step #1: Value your funnel
What’s the typical path that a customer of yours takes?
How can you break that down into discrete stages, with each stage having a price associated with it?
Calculate your average customer lifetime value.
What “transactions” lead to a sale?
- Opting into your list
- Registering for a webinar
- Clicking through to a sales page
- Filling out an application form
What leads to additional sales or upsells?
This might mean digging into some data (sales records, Google Analytics, email marketing reports) to calculate how valuable someone is depending on what stage of your funnel (or funnels) they reach.
Step #2: Plan revenue-raising personalization campaigns that have a low effort-to-impact ratio
What are some changes you can make to are easy to implement, doesn’t require additional ongoing effort, and will immediately make an impact?
Don’t worry about thinking about all the things you could be doing. That just leads to analysis paralysis.
Once you’ve valued your funnel, think about what could be done relatively quickly that has an immediate, permanent, and positive impact.
- How could you make your lead magnets and other opt-in CTAs react to who somebody is (the pages they've viewed, the initial landing page, their original referrer, etc.)?
- What sales page or product description could, with a few tweaks, generate a lot more sales just by speaking a little more directly to the people reading?
- How can you personalize the emails you're sending your subscribers to make your content even more relevant to them?
- What can you do to get more visitors to subscriber, more subscribers to buy, and more buyers to buy more?
Over to you …
What are one or two revenue-raising personalization projects that you can implement to increase your funnel valuations?