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The 10/80/10 rule

This is something I strongly believe in and it works in a variety of situations. It's something I have noticed those newer to sales, have a difficult time with.

The 10/80/10 rule states simply:

10% of your customers will be hard
10% of your customers will be easy
80% of your customers will be average

Basically it shows that instead of preparing and concentrating on the 10% that are going to be hard sales, you should focus on the 80% that are average. The 10% that are easy in this case you shouldn't really worry.

I use this rule with my new sales consultants to help them with their time managment. Why should they wast 90% of their time with the hard customer base that only represents 10% of thier total cliental? Especially since usually with that 10% your comission is usually lower than with the other 90%, and you are alot less likely to get referrals or repeat customers from them.

Now don't use this as an excuse to ignore those 10%, because regardless, someone will be selling to those 10%. Just don't let that 10% take up your entire time. Focus on the 80%. The 10% easy customers don't worry about. They are easy sales, and are pretty much laydowns.

The 10/80/10 can also be used for income as well. 10% are wealthy, 10% are lower income, and 80% fall in the middle class.
Don't spend a majority of your time trying to attract a small percentage of cliental. Focus on the 80%, because again that's where you will do most of business. - by jrboyd
I hadn't thought about this much because at AFLAC you're generally working your way through Employers with 5 or more employees and Assurity and Transamerica requires we seek employers in a practical sense of 10, we're approaching those still in business.... :)

A big part of our market is blue collar, so though some make well over $100,000 when working, many right now are living off of last years savings.

Here is an interesting statistic however if you earn over $100,000.

If you are 35, your average savings will last you 3 months
If you are 45, your average savings will last you 4.5 months
If you are 55, your average savings will last you 7 months

I would guess that by default, we're hitting your 80% squarely, though I've not any way to really peg it, here in Hawaii most families are dual income and the average household income in Hawaii in 2007 was $62613 ...

Great Post...

Much Aloha... Tom ;bg shds;
. - by rattus58
80/10/10 is another form of the Pareto Principle, or 80/20 Rule used as a way to focus your work strategy. I remember Joe Verde was big on training to not get hung up on the tough customers. They were for more advanced salesmen who understood the M.O.

An Example of the Pareto Principle - 20% of the sales force are responsible for 80% of the revenue.

We used this principle as the basis of our "Top 20 Group" at the Dealership. Every month we would announce the top 20% of the sales team on a rolling 3-month average and those 5-6 people got to participate in a Top 20 Lunch at the finest restaurants in the area. They would go out with a sales manager and spend around $1000 for lunch for just 6-7 people and that was with NO alcohol! For Lunch! stcktng;

Record was a maddening $1440 that jeopardized its existence.

Needless to say this was a very effective form of motivation because the chatter of the lunch time debauchery became legendary and it was an honor to be in the group to experience it. I personally used it as a time to educate by sharing each others tips and harness their influence to shape the sales culture of the whole dealership.

The Top 20 Group was a hugely successful campaign for the approximate 2-years that it lasted. - by Tony_B
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