The 80/20 rule works even in sales. As I have said before the best thing about this rule is that its fractal, which means there’s always an 80/20 within the 80/20 also.
So within all your customers 80% of the complaints about you or your product or your service would come from 20% of the customers. However you could go one step further and identify 4% of the customers who are actually responsible for 64% of the problems. If you eliminated these 4% your life would be much more easier.
Similarly there will be few customers who would be responsible for more than 64% of your business. You need to ensure that you are constantly doing everything possible to not only keep these customers happy but to also ensure that you are growing your business with them.
As a sales person you also need to analyze which 20% of the products get you 80% of your incentives or commissions and then analyze which 20% of your customers account for 80% of the sales of those products. That will give you a clear indication of where you have to spend your time and prioritize your day.
While you’re supposed to sell all the products that are assigned to you, by following this mechanism to prioritize your day, you will also hit your financial goals faster. The only constraint for a sales person is time. If you can focus 80%of your time on these 20% customers you would get a massive boost to your achievements.
Its always how you can leverage your time for the most productive use. After all small hinges move big doors.
Till next time then.
A few posts back I had written a post on how giving too many choices actually reduces the chance of success.
I used to hear a lot of gurus in the stock market talk about being focused with not more than 10-15 stocks to get the best returns. If you read the Wealth Creation studies by Raamdeo Aggarwal, he gives a lot of examples of how being focused can give much higher returns. If you want average returns then you can just take an Index ETF.
The other day I was listening to an interview of Garrett Gunderson with Joe Polish on YouTube. And he happened to mention this term in passing and it kind of stuck with me. Garrett has written a very nice book Killing Sacred Cows: Overcoming the Financial Myths that are Destroying your Prosperity.
Even in marketing if you try to do too many things trying to see which will succeed is because you are not sure of yourself either on your offering or on your market or a whole lot of other things. Most of the time we try to do multiple things at the testing stage to see what sticks and what falls. But once you start seeing what sticks you need to start improving on that. You can’t be testing multiple variables simultaneously. It never works.
You cannot be testing multiple offerings in different markets and also seeing which message works. I have done this at different times and flopped badly. Sometimes these were done because I fell in love with multiple brands and thought I could get them launched at the same time but then eventually realized I could not do justice to all of them. It was definitely my ignorance then. At other times I was in a tight spot and had to somehow get something moving and thought at least if a try so many things simultaneously, I will be able to get success somewhere.
Eventually I have come down to some very specific things for B2B marketing. I need to identify only one target market and niche it as much as possible when I am launching a new product / service. If your segmentation is done well and then you get your database / list based on that you have already come a long way. After that you test your messaging.
The 80/20 that I have been talking about in the last few posts is exactly the opposite of diversification. Its about focus and the knowledge which comes from focus. Like the image above, a few colors in a pattern can give a good look but putting too many colors on the same rug, assuming some one will like some color is ignorance.
Whether its finance or marketing or even other areas of your life you can spread your self, diversify and be shallow and ignorant or go deep, focus and be knowledgeable and get great results.
Till next time then.
A lot of self help books will talk about identifying the top 3 issues to be handled the next day and listing them.
The 80/20 rule is fractal, which simply means there’s an 80/20 within an 80/20. So while 20% of the causes are responsible for 80% of the problems, 64% of the problems are caused by just 4%.
Now prioritizing your day or prioritizing your marketing plan has the same basic fundamental to it. The issue is not whether the number is 3 or the number is 2 or 1. The issue is about being able to identify those key items within your next day plan or your marketing plan which will be responsible for helping you get 80% of the way.
The value is always in the hinges (20%) which help you move large doors (80%) with very little effort.
Its about utilising the 20% creative part – the subject line of your email as an example – which if done right can get the remaining part of your email campaign successful. Its not that the process of getting the emails sent is not important, but once the subject line is well crafted and gets responses, then the process of sending mails can be automated.
Within this 20% however if I look at it, identifying the right list/database/market segment, the 4% will get you more than 60% of the way, because then you can build your message accordingly better, tighter etc. Segmenting or finding a niche is all about finding the most attractive, most responsive set of clients which will help you get your product or service faster.
Not all tasks are built alike. I still get caught up in minutiae and sometimes end up spending a whole day just on them. But to come back to the self help book analogy, if you have prioritized your top tasks in your plan in advance and you STICK to them, you should be able to hit most of your goals.
Till next time then.
I have had a lot of situations where we thought we had an amazing product / service but we were not getting a response from the market.
We tried various scenarios, tested various markets but the response was just not there.
In B2B technology services, you may have a wonderful product or service, which is well differentiated but the market does not respond to your service. This inspite of the fact that you are looking at a very small niche, you have identified your Ideal Customer (the person / role) and talking about the pain points that they may have.
The reason for this as I have explained in my earlier posts is that technology companies follow an “infrastructure” or “ecosystem” model. Which means if your product / service does not easily fit into the existing infrastructure then the adoption will be very low.
In this situation instead of asking questions like is this the right market to focus or does this market have the ability to pay. The questions that need to asked could be more oriented towards what could be preventing the audience from responding to your messaging.
Is it that you don’t explain how you fit into the “infrastructure” or is it that they feel it will be too much of an effort to even think about your product / service. To be able to analyse this you need to sit quietly and brainstorm all the possible reasons which could prevent them from interacting with you.
Once you list all the items then quickly start testing to eliminate each of the issues and see which ones have the most impact.
Most often I have found, the reason for not getting to the right answer has been the fact that I had not reached the right question. Once I had asked the right set of questions, things were generally a cake walk.
Till next time then.