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10 2012

Marketing the 80/20 Way

Syndicated from: Your Planning Partners

There are numerous, no thousands, of tools, techniques and methods you can apply to your marketing and sales efforts. The bookstores have shelf after shelf of books sharing the secret ingredients to successful sales and marketing. So where do you start? Start with a simple tool discovered by a guy called Pareto back in the 1890’s. The tool is called the 80/20 Rule and it states that there is an imbalance between effort and results. And this imbalance is very often close to the 80/20 ratio. In plain English this means:- 80% of your revenue comes from 20% of your customers 80% of customers’ complaints are caused by 20% of the problems 80% of your expenses are due to 20% of your expense items 80% of your new customers come from 20% of your marketing efforts and so on and so on……  So how can you apply the 80/20 Rule to your marketing and sales plans? Identify the 20% of your marketing activities that bring in 80% of your new clients. For example, do free workshops bring in new clients? Does networking help fill the free workshops? Be brutally tough on yourself when it comes to booking lunch and/or coffees with prospective clients. Never never never forget your existing clients. Identify the 20% that are responsible for 80% of your revenue and nurture them. Bring them more value; help them in anyway you can. This rule also applies to costs. An example was a client of ours who was spending 80% of his marketing costs on networking but was getting no meaningful results. We diverted those expenses to other marketing activities that did result in new clients. Apply the rule to new initiatives. For example, a new web site. You can build a $5,000 web site or you can build a $50,000 web site. But at what point does the extra cost stop having any significant effect on your marketing results? It’s all in the numbers so do your Numbers Game. In order to get 1 new client how many prospects do you need? To get each new prospect how many new people do you need to meet? This helps you focus the 80/20 way. A final thought. You can apply the 80/20 Rule to your personal life! Did you know that 80% of your pleasure comes from 20% of your activities? Complete your Small Business Scorecard to find out how you are positioned for your business growth

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