Investing in Personalized Content


Personalized content is, officially, all the rage. It’s gaining traction in every channel, from email to social media.

The idea, for the uninitiated, is that you can develop deeper relationships with customers using content created specifically for them, based on data that you have. Tailored messages cut through the noise to create a stronger bond leading to both loyalty and satisfaction.

But all this customer loyalty comes at a cost, and potentially a high one, at that. Assuming your personalized messages are good (another discussion entirely) you’re still left with a burning question: is personalized content worth the investment of both time and money? Should you segment, target and tailor messages to separate groups in a way that will hopefully increase conversions more than if you didn’t? 

Just to clarify, I’m talking about more than “Hey [customer name], how’s it going in [sales region]” here. Rather, segmenting specific users based on behavior and creating tailored content specifically for them.

To talk through some specifics, I’ve cooked up this hypothetical example that compares two email campaigns:

Personalized email campaign comparison

Let’s say this chart describes the costs associated with an email campaign. On the left, the creation of the stock, non-personalized email campaign costs $2,500. The personalized one, on the other hand, costs three times as much to create all those segmented messages. Let’s assume each is optimized as much as possible for even comparison. Probably not accurate, but let’s roll with it.

Looking at these two campaigns side-by-side, it’s obvious that the stock email campaign is the better choice. The return is higher because of the lower initial investment since each campaigned achieved the same rate of return (conversion). Easy. The goal of personalization, then, is to increase the conversion rate enough to offset the cost of the extra effort, and maybe even generate a profit.

Personalized email campaign comparison

Here, with only a .2% increase in conversions with personalized content we’ve equalized the cost of the campaign, despite tripling our initial investment. But that only gets us back to our baseline. To make it worth  while, our return needs to outpace our investment. 

In this second example, we invested 100 more hours and got a .2% lift or a 20% increase in returns. We spent a lot more time customizing messages for smaller niches of audiences. But hang on, it’s not that easy. Even if we threw another 100 hours at the problem and got another .2% lift, we’d be in the same boat in terms of our net total return. The only way personalization is cost effective, in this example, is if we can achieve much greater conversions for the effort. More lift for less work, in other words.

I should mention this isn’t some magic marketing formula. Please don’t build a spreadsheet off these metrics to measure your campaigns. And I don’t want to suggest you can just throw time for “more personalization” at a campaign and expect predictable, linear results. Personalized content is as much an art as it is a science, a combination of data and creativity, and trial and error.

My point, rather, is that the details of personalized content are unique to each business and market, but all personalized content is a significant investment, and should be managed and measured as such. 

And with any investment, an effort toward personalization needs to pay for itself, first and foremost, and then provide dividends. Otherwise, you’re better off going with a single campaign that is as optimized as possible. With any investment in personalization, there are risks. It's the whole law of diminishing returns when comparing 100% stock to 100% custom. You could put all this time into segmenting lists and see a little bump in conversions and think “Hey! It worked!” but in reality, you do not see the cost of all that time reflected in your analytics.

If you are thinking about a highly targeted personal campaign in the future or are in the midst of one right now, treat it as an investment. Spend your time wisely, track the effort, and make sure all your hard work is performing the way it should be.