🌱 The Patterns of Nature (and Profit) in Your Email Database

There's a powerful pattern in nature and business known as a "power-law distribution". Looking at the graph above, the curve of the power law has a few defining features:

A "tall head" on the left side, where a minority of total measurements produce the largest results.
A "long tail" trailing out towards the right, where the majority of the measurements produce relatively minimal results.

This type of distribution occurs everywhere around us, everyday:

80% of a tree's branches produce 20% of the leaves, and 20% of the branches produce 80% of the leaves.
80% of all known species on earth are insects (arthropods), and all other life makes up the other 20%.
Of these insects, 80% of all insects are beetles, 20% are all other insects.
20% of those infected with a disease account for 80% of its spread.
2% of the Earth's surface area is home to 50% of all plants and animals.
20% of bird species make up 80% of sightings.
1.4% of tree species account for 50% of total trees in the Amazon Rainforest.

Of course, these sorts of distributions aren’t just limited to the natural world: they’re also ubiquitous in business. The 80-20 distribution, or Pareto Principle, is a well-known example of a power law distribution:

20% of sales people are responsible for 80% of total sales revenue.
20% of customers account for 80% of total profits.
20% of the most reported software bugs cause 80% of software crashes.
80% of customers only use 20% of software features.
80% of your complaints come from 20% of your customers.
20% of a user’s phone apps get 80% usage.

By understanding the power laws in our email database, we can find our top customers, create unique offers and increase our revenue.

Archimedes is supposed to have said "Give me a lever long enough and a fulcrum on which to place it and I shall move the world". Understanding power laws in your business gives you that lever.

The only unknown remaining is the fulcrum on which to place it —

Read The Patterns of Nature (and Profit) in Your Email Database