Think of your subscriber base as an appreciating asset, like a bank or IRA account, instead of a resource that can be endlessly exploited. As long as you invest properly and draw against the account in moderation, the long-term value of the asset is maintained. More importantly, the asset will take care of you for a long time. However, if you liquidate the asset today, don’t expect there to be much money left in the future.
I have encountered a number of retail companies that choose to send daily email promotions to their entire subscriber list. The logic is based on the simple fact that the more they send email, the more money they make. In the short run, these companies increase their overall sales. In the long run, they witness incredible list fatigue. Eventually sales begin to decline because their poor subscribers have simply had enough.
Yes, individuals should be treated individually—this is the objective of customer-centric marketing strategies. However, tailoring highly personalized messages to each individual in the customer base can be an overwhelming aspiration. Practically, marketers need to deliver the most relevant messages possible—with profitability in mind.
The 80/20 rule states that 80 percent of your revenue will come from 20 percent of your customer base. Time and again, this rule has proved itself in business. The thing that differentiates “great” marketers from “good” marketers is that they learn to use multiple layers of segmentation ...