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Do You REALLY apply the 80/20 Principle: Why ignore one of the most important success factors?

Do You REALLY apply the 80/20 Principle: Why ignore one of the most important success factors?
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I can't remember where I first heard about the 80/20 rule - Pareto's Principle -a powerful success factor. I do remember that it sure got my attention.  True to form, first I researched it to see if there was truly evidence for it.  There was.  Then I applied it to my business and my personal life.  And I saw results.  It's now 2nd nature for me to ask myself routinely -does this activity fit into my 80/20 rule?  Maybe you've heard of it but forgot all about it...or maybe you've never heard of it.  Either way, here it is:

About 80% of effects come from 20% of causes.  Joseph M. Juran, who studied quality improvement, suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of the land in Italy was owned by 20% of the population.  Juran found that in quality management, 20 percent of product defects caused 80 percent of product problems.

Turns out this success factor applies in all areas (maybe not always 80/20 but close enough!).  Picture your clothes closet.  If you're like most of us, you wear 20% of your clothes 80% of the time. If you keep files, there's a good chance you look at 20% of them 80% of the time.

In sales 20% of customers bring in 80% of sales.  80% of delays in schedule arise from 20% of the possible causes of the delays.  80% of customer complaints arise from 20% of your products or services.

Here are 3 tips for applying this rule to your success:

Tip #1:  For a few days, write down everything you do.  Then pare down your list to the 20% of things that you see as most important.  For example, if you find in the last 3 days, you've done 15 different things, which 3 things were most important to reaching your goals, or bringing in money, or serving your best clients?  Now focus most of your daily time and energy on those things...when distractions start occurring...remember where to keep your attention...on YOUR success factors.

Tip #2:  Do you sell products?  Even if you're in a service business, I encourage you to have information products! Pay attention to how much of your profit comes from each item. Put your effort into the 20% that give you 80% of your sales.  Sometimes it pays to bundle together and discount the others that aren't bringing in 80% of sales.

Tip #3:  Most of the time, 80% of your sales come from 20% of your customers- the ones who make the big purchases and are repeat-buyers. Make that 20% feel special.  Give them advance notice of new services/products and offer them discounts.  Give them exclusive services, available only to them.  If you do business face to face -periodically host a breakfast or lunch for your best clients...don't ask them for anything in return, just honor them.

For the next week pay close attention to what activities you're doing.  Ask yourself if they fit into your 80/20 success factor rule.  This is one of the most powerful ways to moving away from working "hard" to make money to working "smart" to make money.





Do You REALLY apply the 8020 Principle Why ignore one of the most important success factors - To learn more about this author, visit Ann Ronan's Website.

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Dianne Crampton

Dianne Crampton is an executive leadership coach, team culture consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here.

Dianne's contribution to the 2010 Pfeiffer Consulting Journal (an imprint of John Wiley and Sons Publishers) entitled TIGERS Hearted Teams is available in November 2009.  Her new book TIGERS Among Us: 5 Winning Business Team Cultures And Why, Three Creeks Publishing will release in March 2010.  To receive publishing discounts, subscribe to the free TigerTracks Newsletter here.

- Visit Dianne Crampton's Website

Leanne Hoagland-Smith
Are your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website

Linda Richardson
Linda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website


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Ann Ronan
(Visit Ann's Website) Ann Ronan, Ph.D., founder of Authentic Life Institute is an author, speaker, and self employment expert. Ann delivers smart, simple ways for people to start businesses based on their passions and to create marketing systems that work. Her articles, products, and books have motivated and inspired readers in numerous print and online publications. She regularly leads coaching programs, teleseminars and live workshops, bringing the message to audiences internationally that living a purpose-based life will bring prosperity and success.

Ann Ronan is a Gold author on EvanCarmichael.com
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