Workplace Examples Of The Pareto Principle (80 20 rule) Applying The Pareto Principle
To Your Business
How many times have you heard someone mention the pareto princple or the 80/20 rule: 80 percent of your business comes from 20 percent of your customers.
Take a look at your business and see if this applies to you. If so, think about this for a moment… If you’re really getting 80 percent of your business from 20 percent of your customers, then your getting the remaining 20 percent of your business from 80 percent of your customers.
Why waste so much time, effort and energy trying to serve the 80 percent of your customers that are generating only 20 percent of your business?
With this in mind, let me ask you 3 questions:
- How much time is being spent servicing people that don’t buy very much from you?
- How much time is spent answering questions from people who bought from you last year – and aren’t a current customer?
- How many people call you, ask lots of questions, take up your time, and then buy from someone else?
When you’re wasting your precious time, effort, and resources dealing with these people, you aren’t giving yourself the opportunity to find new prospects who could become valued and loyal customers.
And you wonder why you’re so tired and business is so slow.
Last week I got a call from the owner of a company that sells/rents equipment that is used in the filming of movies and television programs. He told me that many people call to purchase hard-to-find replacement parts (that cost less than $100) for equipment that was purchased elsewhere for tens-of-thousands of dollars.
His sales people find themselves wasting lots of time on these little – insignificant – orders, while they don’t have enough time to call on companies who could purchase tens-of-thousands of dollars of new equipment. And then he wonders why business isn’t what it should be.
Take a look at how much time you are spending calling on, servicing, or answering questions from people who don’t do business with you.
STOP WASTING YOUR TIME!!!
Here are 3 things you can do that will help you eliminate people who keep you busy, waste your time, and never do business with you:
1. Keep track of everybody you speak with in a contact management program. My preference is ACT!.
2. Keep detailed notes of everything that was discussed, how much time they took up, how much they purchased, and how timely they are about paying their bills. (Customers who don’t pay their bills are BAD customers.)
3. Schedule regular follow-up calls and meetings so you don’t lose track and forget about your good customers.
People who say “Call me in 2 weeks.” or “I’m in a meeting and can’t talk, call me later.” or “Just send me something.” are probably blowing you off but don’t have the courage – guts – to tell you they aren’t interested.
They’re more than happy to let you waste your valuable and precious time.
Spend your time serving the 20 percent of your customers that generate 80 percent of your business and let someone else look after everybody else. Now you’ve more time to find, meet, and sell new customers that have the quality and characteristics of your best customers
You’ll quickly begin to close more sales, make more money, and have more fun.
Authors Details: Workplace Examples Of Pareto Principle – Jeffrey J. Mayer Web Site