Why personalization matters
Think back to the first digital book you bought on Amazon. Mine was “Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing.”
Amazon not only knows the title of the first book I ever bought. They know my search history - what items I didn’t buy, and based on what I’ve looked at, what items I might be interested in.
Using that knowledge, they send me personalized recommendations via email and they suggest other related products whenever I’m searching the site.
In other words, taking what they know about me, they’re personalizing my search experience.
So, what is personalization?
Personalization just means tailoring the experience someone has with you. Amazon does it. Facebook does it. Every web app on the planet is personalized by showing just the content that’s related to your account.
If we know who’s looking at our website, there’s a good chance we know something about them. And every time someone opts-in to something on your site or clicks a link in an email of yours, an authentication event is happening (i.e. we can add a tag to that subscriber in your database).
So if I subscribe to your mailing list with my email, for example, and I get an email from you, and I click a link in that email … the website receiving that click should know that I’m currently looking at the website.
And if it knows who I am and has information about:
- What lead magnets I’ve downloaded
- What products/services I’ve purchased
- What content I’ve consumed
… and so on.
Then you can start to create the best digital experience possible for different segments of visitors, and ideally, for each individual visitor.
Customization vs. personalization
You can deliver a personalized user experience to your subscribers in two ways: 1.) through content customization, and 2.) through personalization.
Customization occurs when a user opts in and deliberately selects options designed to make their user experience more personalized. Think Netflix. When you first create your account, Netflix asks you to select titles that most accurately reflect your interest. It then serves up other titles that you might be interested in. But here, customization requires your input to begin delivering a customized experience.
Personalization occurs automatically using data that you already know about your subscriber and their wants/needs. So a user/visitor is automatically shown personalized pages and content, without needing to do anything else (e.g. Amazon).
Why personalization matters?
Let’s say your business makes $1 million a year.
How could you add another $100,000 in revenue this year?
You could try lots of things, such as:
- Increasing prices by 10% (though it might hurt overall sales)
- Increasing your average order value by 10% (think bundles - that should do it, right?)
- You could get existing customers to purchase more via up-sells and cross-sells
- You could increase your customer size by 10% (this means more traffic, more leads, and more conversions)
And there are a lot of things you could do to increase your funnel’s performance:
- Run A/B tests to come up with stronger headlines, supporting copy, and CTA’s
- You can use chat-bots to answer pre-sales questions and convert customers who are ready to buy
- You can invest in better email marketing automation software
… and the list goes on, and on.
In fact, it can get pretty overwhelming. Not to mention a lot of these experiments take time to collect data and see any real results.
But what if you could implement a strategy that has a low effort-to-impact ratio? In other words, what can you do that will take a relatively little amount of time and get you the biggest possible results?
Personalization affects all stages of your funnel and requires little ongoing maintenance once implemented. For example:
- You can use dynamic lead magnets to convert more visitors to subscribers
- You can personalize your email messaging to lower the likelihood that your subscribers will churn out (i.e. unsubscribe) by making your emails more relevant to them
- 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 overall sales 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 on conservative).
Ok, so 10% more anonymous people who hit your site are now opting in. Fantastic!
What financial effect is that going to have on your business? Well, to figure that out you’re going to have to figure out the value for each stage of your funnel.
So let’s take a look at a couple of examples and reverse engineer our funnel(s).
Esample 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 re-hire the same design 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 ($10,000 x 30% = $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 ($3,000 x 5% = $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 ($150 x 20% = $30).
Lots of numbers, but let’s break it down and see what effect a 10% 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.
Value your funnel, first!
It doesn’t matter if you’re a small consulting company or course creator or a large e-commerce retailer, you have a funnel and your funnel can be broken down and priced. Here’s how:
Step 1: Value your funnel
What’s the typical path that a customer of yours takes in order to become a customer?
How can you break that down into discrete stages, with each stage having a price associated with it?
Start at the end and work backwards.
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 up-sells?
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 that are easy to implement, doesn’t require on-going effort, and will immediately make an impact?
Don’t worry about thinking about ALL of the things you could be doing, that’ll just lead to analysis paralysis.
But 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 CTA’s 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 convert more visitors to subscribers, more subscribers to customers, and more buyers to become repeat buyers?