Standardized Personalization

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What makes a customer stay?

Great product

Great service

Anything else?

We spend so much time trying to get new customers into the business, but not enough time getting them to stay longer, pay more, and in the end, be more valuable to us.

Today I’ll discuss a framework that can help you do exactly that.

I was so elated to see April’s numbers for our SaaS (Elephas).

We had managed to reduce churn by 75%, and increase customer lifetime valie by 5 times over the last 3 months.

This is HUGE for a 2 person team running a B2C low ticket software business.

How did we do it?

I wrote a thread about it earlier this week.

But essentially it boils down to a framework I like to call - Standardized Personalization.

This is how you make each customer more valuable.

So every lead that comes into your business is worth that much more, which in turn means you can afford to spend more time and money attracting new leads into the business.

Reminds me of a Russel Brunson quote -

“In the end, the business that can spend the most to acquire each customer wins”

The more a customer is worth to the business, the more you can spend to acquire them, and the easier it becomes to beat the competition.

Let’s look at a few numbers to understand this.

For a profitable, sustainable SaaS business, the thumb rule is that your CAC/LTV ratio should be 1:3.

CAC = Customer Acquisition Cost - The money you have to invest to acquire each customer.

LTV - Life time value of a customer - The total amount of money a customer pays you before churning away.

So if your LTV is $60, and if you’re spending anything more than $20 to acquire each customer, then you’re making a loss. Because you still bear the cost of serving that customer + the cost of your own time to run the business.

It makes sense then to increase the LTV of each customer, by getting them to stay longer, or by upselling them higher priced products and services.

Back in January, Elephas CLTV was $37.

We had high churn, we couldn’t get customers to stay. It was like a leaky bucket.

In April, our CLTV reached $169.

Our churn reduced by 75%. Each customer now stays a subscriber for 5 times longer than they used to 3 months ago.

This is powerful, because now we can spend a lot more money and time in marketing activities and we know we would still be profitable.

In the competitive space of AI writing assistants, this is a game changer for us.

The actions we took to increase our CLTV can be boiled down to a framework I like to call - Standardized Personalization.

Let’s quickly see what it means and why it works.

Standardized Personalization

What makes customers stay?

What makes them keep paying you?

Trust? Credibility? Branding?

There are many ways to do this, but as a consumer, what works best for me is personalization.

Sure, the product has to be good (that’s table stakes), but if I can get a personalized experience, then I’m far more likely to keep using a product, than if I get a cookie-cutter experience that every other customer is getting.

Kind of like the difference between eating at McDonald’s vs hiring a personal chef.

Every McDonald’s meal is going to taste the same throughout the year, throughout the country.

But if I hire a personal chef, they can give me a premium custom experience every time they cook for me.

Something worth paying a lot more money for.

So how do you give a home chef experience in an internet business?

The personalization for the customer has to be balanced with the standardization for the business.

So for a SaaS product, this means building features that let users make the product their own.

For Elephas we built features like “Snippets” and “Super Brain” where users save their own templates, prompts, upload their own documents, add to their “brain” and can chat with their brains when needed.

The code for those features is same from our end - it’s standardized.

But it let’s every user customize the product to their own needs. So in a way, all of our 500+ subscribers are using a unique version of Elephas - it’s personalized to their needs.

This also gets customers invested into the product and makes it sticky.

So now, even when they look at a shiny new AI tool in the market, the friction is very high for them to churn away from us, because they have their own set ways in which they use Elephas.

I’ve seen this with many of the tools I use myself -

ConvertKit for sending emails - I have so many tags and segments, that it would be impossible for me to move on from CK at this point.

Feather for the blog - It’s directly tied to my Notion and I have done so many tiny personalizations in the product, that it will be very hard for me to move onto a new tool.

A more consumer facing example of this is Subway.

With a unique combination of breads, sauces and fillings, every customer makes a unique Subway sandwich for themselves.

But for the company, their process is quite standardized.

They have to produce the same types of ingredients, they have to prepare the sandwiches in the same manner - they have to follow a standardized process for delivering value to the customer.

Yet, the experience that every customer gets is quite personalized.

Standardized Personalization.

How can creators leverage this?

If you’re not building a SaaS, if you’re an expert driven business like a freelancer, agency, or you’re selling content products, e-books, courses and communities, you can still apply this framework.

One obvious way to do it is the value ladder framework which we’ve discussed before.

Essentially, the more you’re involved in delivering the value, the higher fee you can charge from the customers, because you can give them a personalized experience.

But how do you bring standardization to value delivery?

Through processes, tools and automation.

You standardize your backend.

The most profitable agencies and freelancers have clear SOPs that drive them.

But they still manage to give their customers a personalized experience.

Logology by Dagobert is a great example of this.

You get a unique logo for your project, the process you go through is quite standard.

But they take it to the next level is by sending personalized greetings to their customers.

For my own example -

I have very standardized process of hosting every indie masterminds session, or delivering a workshop, or making a tutorial for the community. They’re based on the goals and challenges of the members, so it’s a personalized experience, but at my end, the value delivery is quite standardized.

I’ve also pretty much automated the onboarding for the community with the help of NoCode tools -

But towards the end of the onboarding members get a welcome call with me, where I try to deliver a personalized experience.

Again → Processes, tools and automation.

Plus - excellent customer service!

Homework

All this means nothing if you cannot apply it to your situation.

So 2 questions to ask yourself today -

How can you give a personalized experience to your customers?

How can you standardize the delivery of that experience on your end?

Take some time to reflect on these questions.

This is how you win AND your customers win.

This is how you build a business you love.

Hope this helps a little.

Cheers!

Here’s the original thread I wrote about the 5 steps we took to improve our CLTV -

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