Become The King Of Sales & Marketing By Employing The 80-20 Principle!

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Become The King Of Sales & Marketing By Employing The 80-20 Principle!

24th, May 2018    -    Sponsored

If you were told that 80% of your sales were generated by 20% of your customers, would you believe that?


You might ponder & recall the number of people you must have approached, pitched, convinced and assured to sell your product. And in the end, only 20% of buyers generate 80% of sales? It might sound outrageous initially, but it is true.


All you need is some assessment, and if you stick to the 80-20 pattern, you will see it in everything. The Pareto Principle is a very basic yet profound idea that states, 80% of effects are generated by 20% of causes. If you can analyze things you do, you will see this pattern rooted in all activities, because it is exponential.


For instance, 80% of your sales are generated by 20% of your customers, that’s fine. Let’s assess deeper into it. Take the 20% part and assess it separately. You will observe that 80% sales of this part are generated by 20% of customers!


This stays constant as we analyze deeper. That’s because the Pareto principle isn’t just a table or a yardstick, it’s a pattern, almost all-pervading, yet not a law.


The ratio doesn’t necessarily have to be 80-20. It could be 81-19 or 90-10. The essence of this principle is that few causes generate large effects. And it is pretty well entrenched in sales and marketing.

 

The Pareto Pattern in Sales and Marketing

Get your contact list and sales memo out. Enlist everyone you have marketed and sold to and keep your income charts ready. Simply make a column listing your top buyers and the sales they have generated for you. In most cases, 20% customers will get you 80% sales.


If you are a marketer, you might need to check your advertising channels and sales inventory. The 80-20 pattern is evident in numbers, so when you have clear stats you can make right conclusions and see obvious patterns. Some observations you might make are-


-         80% of the sales are made by 20% of the salespeople

-         80% of your online product sales come from 20% of your products

-         80% of sales come from 20% of advertising channels

-         80% of your profit is contributed by 20% of your products or services


In most cases, this ratio is pretty clear. It might certainly fluctuate, but on an average, it remains the same. But what can you do with it?

 

Using 80-20

The Pareto Principle helps you improve on your sales and marketing in extraordinary ways. Just by assessing and structuring your data in a simple pattern gets you a very clear picture of what sells for you, who buys from you and what works for you. With a general segregation of your sales and income in the 80-20 pattern, you can be aware of your key focus area.


Suppose you are selling 10 products, and 2 products get you a major chuck of your profit, you might consider pushing or marketing those products more in comparison to the other 8 products that have comparatively lesser sales. This enhances your chances of having better sales.  


But, there’s lot more than money to it.


Just imagine how much you can save in terms of efforts and time. When you reduce marketing and selling efforts for 8 products, you get more resources to spend on the 2 premier products.

 

What can you do with the resources saved?

A lot. You can simply channelize that time, money and energy into selling those two products in more creative or dynamic ways. You can invest that resource into research and development of new products, or whatever you want to sell!


At the end of the day, it’s not just the money you have earned, but also the space you have saved for yourself to ideate new methods to enhance your sales methods.


Even if you don’t wish to be productive in the time and effort you have saved, you can simply hit the beach and refresh your mind. The best ideas are generated and found at times that are not dedicated to work!


So, by following the 80-20 rule, you can at least earn time to simply waste!


And, if you are serious enough, you can earn yourself a chance to be more effective in sales and marketing.





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About the author:


Hetansh is the Founder at Vital20 Communications, a marketing consultancy that follows the Pareto Principle to win customers in the first 3 seconds.

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Hetansh Desai

Hetansh is the Founder at Vital20 Communications, a marketing consultancy that follows the Pareto Principle to win customers in the first 3 seconds.



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