How do you make the most sales with the least effort? Consider the 80/20 principle (Pareto’s Law). The principle states that 80% of results are returned from 20% of effort, which applies in many aspects of life. In marketing and sales, you can look at Pareto’s Law from several perspectives. Use these to figure out better profitability. (And yes, sometimes the numbers will not be exactly 80/20, but the principle can save you lots of money!)
80% of sales come from 20% of your customers.
It seems fair to treat all customers equally, but they are not equally profitable. Focus your time and money on the most profitable clients, not the clients that cost you. Sometimes, raising your prices helps cause this shift in profitability.
80% of repeat sales come from 20% of your customers.
Identify and nurture these profitable customers.
80% of your complaints come from 20% of your customers.
Are there common factors between the customers who give you headaches? You may be able to make helpful adjustments with this information. Work to eliminate those problems and that customer type. Fixing the correct 20% of the issues can remove 80% of the customer complaints.
80% of your sales are from 20% of your products.
What are your top products? Focus your marketing on those, and consider eliminating any products that are not profitable.
80% of your sales come from 20% of your salesforce.
If you pay attention to this factor, you have a chance to make a massive improvement in sales. Look into the personality, techniques, and sales styles of your top salespeople. This information should help you gain more sales with less effort.
80% of your website’s persuasion happens on 20% of the pages.
What are your most visited pages? Put your energy into making these pages as effective as possible. Can you identify any trends and customer preferences from your analytics that will help you strengthen your website overall?
Doing an 80/20 data analysis on your products, projects, salespeople, customers, and marketing campaigns will help you find ways to be more profitable. With this knowledge, you can allocate resources to the top 20%. Do more of what’s working well. Want more? Read this article.
