Your customers surprise you. Instead of the one e-mail campaign you send them each week, customers overwhelmingly tell you they want a monthly e-mail, and maybe three additional campaigns for major sales events.
You eagerly set up a three month test, to understand the financial impact of the strategy your customers advocate. The results below are extrapolated to represent an entire year of campaigns.
|E-Mail Test Results, Annualized To Total Housefile|
|52 E-Mails||15 E-Mails|
|Per Year||Per Year|
|Average List Size = 100,000 |
|Average Open Rate||20.00%||25.00%|
|Average Conversion Rate||3.50%||3.80%|
|Average Order Size||$230||$235|
|Sales per E-Mail||$0.48||$0.74|
|Total Net Sales||$2,511,600||$1,105,088|
|Less Marketing Cost||$15,600||$4,500|
|Variable Operating Profit||$863,460||$382,281|
Pundits want you to let customers take charge of your marketing activities. In this case, you survey your customers, and they tell you they want fifteen e-mail campaigns a year. You test the strategy, and find out it will cost you nearly a half-million dollars of profit.
Let's assume that your CFO demands that you generate profit increases, not decreases. Let's assume you do not have the capabilities to tailor the e-mail strategy to the individual e-mail address.
What do you do? Do you listen to your customer, and convince your CFO that the customer is right, and the shareholders/owners are wrong? Or, do you ignore the feedback of your customers? I'm going to guess that you aim to please your CFO.