Home > Approach > The 80/20 Rule

The 80/20 Rule

If the rule says I should get 80% of my business from 20% of my customers, shouldn't I work harder on the 20%?

Communicate at least 4 times a year?
Special offers/vip sales?
Unexpected free gifts?

And if the other rule says I'm going to lose 20% of my customers every year (hopefully through no fault of my own), won't some of them my from my treasured 20% list?

Maybe I should work to move some of the 80% to the 20% so I can afford the loss?

whaddyathink? - by BIG Mike
Mike,

Yes, you should work harder on those people. You should train them to be ambassadors for you. Treat them like royalty if they truly are giving and referring lots of business to you.

And you should always be looking for new ambassadors.

Hope that helps. - by Jim Klein
I had never heard this rule but then I am very new to sales.

I wonder if it has anything to do with something my district manager told me when I signed on to sell Avon. She said most representatives only have six or eight customers! I found that hard to believe. Maybe she was referring to that 20%? - by ozzie
If the rule says I should get 80% of my business from 20% of my customers, shouldn't I work harder on the 20%?
Tell me you're not treating ALL of your customers the same. :yi

Maybe I should work to move some of the 80% to the 20% so I can afford the loss?
That is the general rule of thumb... moving C's to B's and B's to A's.

whaddyathink? - by Mikey
Keep on doing the same ol' thing and business will evaporate. You have to be fresh and alive and attentive.

Find at least 4 reasons to contact your customers every year. Thank-you card, newspaper clipping, birthday card. It's all about them, not about you. Treat the 20% like royalty and schmooze the 80% to milk more business and prospect new business so you can grow by 25% a year for a 5% net growth. - by BIG Mike
Mike,

Yes, you should work harder on those people. You should train them to be ambassadors for you. Treat them like royalty if they truly are giving and referring lots of business to you.

And you should always be looking for new ambassadors.

Hope that helps.
Ambassadors, sometimes called "champions" are extremely significant. I've had such a client for about four years, and he's recommended me to a number of new clients. This year, a woman who he'd recommended me to several years ago became an ambassador herself, introducing me to my newest client... one that promises to be my second largest client overall. Hopefully all will go according to plan and 2007 will be a fine year. If so, then I've got a couple of ambassadors to thank for it! - by Coda1108
"If the rule says I should get 80% of my business from 20% of my customers, shouldn't I work harder on the 20%?" I believe you're talking about repeat sales (as opposed to vertical selling which is getting bigger orders from your customers).

It's far easier to sell to who you have an established relationship with, whether it's through your company or personally through you. So do work harder on that 20% (and if you have spare time, on the 80% as well). - by Wonderboy
Do you guys think these "ambassadors" should be your "customer profile"? - by Thomas
Do you guys think these "ambassadors" should be your "customer profile"?
Yes. As much as possible target those prospects you believe will result in repeat or referral business. - by Houston
Tell me you're not treating ALL of your customers the same. :yi

That is the general rule of thumb... moving C's to B's and B's to A's.

whaddyathink?
I agree with this comment from Mikey - by EmmaC
If the rule says I should get 80% of my business from 20% of my customers, shouldn't I work harder on the 20%?

Communicate at least 4 times a year?
Special offers/vip sales?
Unexpected free gifts?
?
Hi, I'm new to this forum...My name is Eydie and I am a Virtual Assistant. I have to say that if I only communicated with my clients a mere 4 times a year...I would have been out of business years ago. Weekly, if not daily, communication is imperative in my business, as it is, I'm sure, in others. Along the way, I thank my clients regularly with cards, simple thank you gifts and the best thank you of all....referrals. - by VirtualAssistant
Well said VA. - by EmmaC
What would happen if you fired (nicely) the very few customers that take your best effort but rarely appreciate it or spread the word?
I'd cut 'em loose too. whstl; - by Calvin
I read in this post, in other posts on this forum and by many modern sales trainers that "It's not about you, it's about the prospect".
This is not true. In my years of sales practice and with the advice from my mentor, I have come to learn... It is about ME.

It's about having a superior marketing strategy which provides you with more hot prospects than you could ever talk to. It's about qualifying these people in a short amount of time by asking the right questions. It's about getting rid of those people who are not prepared to do business with you today or at the very least giving you a firm commitment (these people are a waste of your life). It's about being the absolute professional; providing an exceptional product or service and getting paid for it. It's about going to the bank every day.

It is about YOU! - by bluenote
I read in this post, in other posts on this forum and by many modern sales trainers that "It's not about you, it's about the prospect".
This is not true. In my years of sales practice and with the advice from my mentor, I have come to learn... It is about ME.

It's about having a superior marketing strategy which provides you with more hot prospects than you could ever talk to. It's about qualifying these people in a short amount of time by asking the right questions. It's about getting rid of those people who are not prepared to do business with you today or at the very least giving you a firm commitment (these people are a waste of your life). It's about being the absolute professional; providing an exceptional product or service and getting paid for it. It's about going to the bank every day.

It is about YOU!
What's an example of a superior marketing strategy that you or someone else has used with great success? - by Houston
What's an example of a superior marketing strategy that you or someone else has used with great success?
Multiple websites
Blogs
Newsletters
Public Speaking
Direct Mail
Advertising
Networking

The list goes on...

Whether you are marketing your product, your service or yourself; you need to find what works best for you. Be aggressive with your marketing and you will have them flocking to you all day - everyday.

Give them multiple ways to get in touch with you... phone, fax, email etc...

Always be "getting back to them".

Qualify them immediately (within the first two minutes of your conversation) and find out 1. If they are in the market right now for what you have and 2. If they have the money to pay for it.

If not, get rid of them.

The beauty of having 75, 100, 200+ prospects to speak with everyday is that you will never have to brown nose or treat a select few leads
"like gold" ever again.

We do what we do as a profession to get paid not to make friends. I have been using this strategy with what I do for quite a while now. It works and it pays really well! - by bluenote
Weekly Updates!
Questions and Answers about Selling
Subscribe to our mailing list to get threads and posts sent to your email address weekly - Free of Charge.