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?

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.

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%?

Originally Posted by BIG Mike 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.

Originally Posted by BIG Mike 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?

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.

Originally Posted by Jim Klein 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!

"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).

Do you guys think these "ambassadors" should be your "customer profile"?

Originally Posted 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.

Originally Posted by Mikey Tell me you're not treating ALL of your customers the same. 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