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The 80/20 Rule is Alive and Well…How to Leverage These Little Numbers for Big Results in Your Business

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Leveraging Your 80/20The 80/20 Rule, or what’s known as the Pareto Principle, has been around since 1906, but don’t let old age lull you into thinking the idea is old-fashioned or out-dated.  It’s alive and well and more relevant than ever for top companies looking to leverage growth in a challenging economy.  Like anything else in this world, it’s all in how you use it!

 A little history lesson.  The “birthright” of this principle was thought to have originated with economist Vilfredo Pareto back in 1906, when he used it to describe the unequal distribution of wealth in his country.  Twenty percent of the people owned eighty percent of the property and wealth.  Dr. Joseph Juran, however, a management pioneer in the 1930s and 1940s, was the one to come up with a universal “law” or “principle” of the “vital few and trivial many” which described the idea that 20% of something always are responsible for 80% of the results.  Juran used Pareto’s observation in his writings and the name Pareto’s Principal rooted. 

Now – why it’s important to you!  I know what you’re thinking, “So, how does this relate to MY business?”  That, of course, will depend on you!  Applied effectively and consistently, these two little numbers can change the course of your future in many ways, most notably in terms of your business and life FOCUS.   After all, when it’s said and done, what you focus on MOST will determine your direction, your success and your well being both as a person and a business owner.  Let’s look at three ways the 80/20 Rule can help you focus on what’s important and leverage big results: 

Building your customer base:   The 80/20 Rule suggests that 80% of your business comes from 20% of your best customers.  Who are the 20%?  Do you know?  What do they look like?  Where do they live?  What do they need most?  Why do they use your company instead of a competitor?  Knowledge is power when building your business, and the time the time is now to define and clarify where your real business is coming from.  That does two things for your company.  First, allows you to give those customers who are purchasing your product or service, referring you to friends and family, and returning again and again the recognition and appreciation they deserve.  If you’re not thanking them, reaching out to them, talking to them and treating them as the VIPs they are, there is no doubt that they can and will take their business elsewhere.  Focus on the 20% and they will reward you with loyalty and referrals that will help you grow.  Conversely, in his bestselling book, The 4-Hour Workweek, Tim Ferriss also suggests that companies “fire the 20% of the customers who take up the majority of one’s time and cause the most trouble.”  That frees you to spend that additional time supporting and marketing to your best customers as well as seeking out new “like-minded” customers just like them! 

Streamlining your time:   It’s no secret that the bulk of your day, if you allow it, can get eaten up in the blink of an eye with the process of trying to put out or prevent “fires” in our business.  The  savvy business professional, however, let’s NOTHING detract them from the core practices and tasks that bring them closest to their revenue line every day.  Sherry Chris, CEO of Better Homes and Gardens Real Estate, shared, “the old 80/20 Rule still applies.  If you want to build your brand, grow your business and ensure longevity in this world, 80% of your time should be face-to-face, on the phone, or online reaching out to past and potential customers.”  Prospecting, while considered a ‘dirty word’ for many sales or business professionals is now and always will be key to staying power.  Take one week of your life, both personally and professionally and write down your daily activities from dawn to dusk so you can analyze where you’re losing productivity AND quality time with family and friends.  Eliminate, delegate or condense those activities that aren’t adding either productivity or joy to your life and business and focus on what matters.  Make, and more importantly, KEEP that appointment with yourself every day to prospect, present and close customers.  Treat that 20% of your time the same as you would making a huge financial deposit into your bank account and you know what?  It will be. 

Leveraging your passions:  Confucius said, “Love what you do and you’ll never work a day in your life.”  There I go again with the “old” sayings, but Confucius had it right.  There’s are reasons you are good at your job, things that you are more passionate about than others, and ways that you contribute to your business that feel a lot more like fun than work when you love what you do and do what you love.  For some it’s being face-to-face with a customer, analyzing the best way to help them and feeling the satisfaction of ‘solving that puzzle.’  For others it’s creating the presentation, doing the research and putting it all together in a final product.  For me, obviously it is writing and having the ability to share ideas, insights and information with those of you I may or may not ever meet, but have the ability to touch your business or life in some way through the written word.  Wherever YOUR passion lies, your time and focus are usually well spent here as it more often than not, brings out the best, and most productive you possible. 

I challenge you to really take a good look at the 80/20 Rule this month and how it applies to your customers, your days, your business and the way you charter your course ahead.  What will you FOCUS on that will bring you more customers, more balance and more joy in your life?  Go make Pareto proud!  Then check in with me and let me know how you did it!  I wish you success! 

Visit www.oppknockspostcards.com to learn more about the best practices and systems necessary to ensure that you are building the strongest customer base possible. You also can call our marketing team or me today at 866.405.3638; we are ready, willing and passionate about bringing the best resources in the industry to your organization.

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Written by jimschimpf

August 6, 2009 at 6:55 pm

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