The 80/20 Rule: A Guiding Principle for Business Success
What is the 80/20 rule and how will it my business succeed?
The Pareto or 80/20 Principle was invented by the economist Vilfredo Pareto in 1897 after determining that 20% of the population in Italy owned 80% of the land. This principle is well-known and widely used by business leaders in all types of industries. This principle has also been at the core of my successful sales career by providing me with the focus needed to drive revenue growth by using my limited time and resources more efficiently and developing tangible goals. What the principle conveys is that 80% of outcomes, consequences, or achievements will result from 20% of all inputs, causes, or efforts. We can achieve more with less, in other words. Every role that I have held has helped validate the 80/20 rule: 80% of my revenue goals have been generated by 20% of active accounts; 20% of our TV shows or website content topics accounted for 80% of our ratings or online traffic respectively; 20% of our cable or satellite providers accounted for 80% of our distribution; 20% of our sales people accounted for 80% of our revenue, and so on. So, how do you apply the 80/20 Principle? Identify Your Top Targets- Who are the customers or clients that account for 80% of your revenue or business?
- What content topics, formats, or categories drive most of your site traffic?
- Who are your top performers within your company or team?
- Who or what are the top drivers for your distribution?
- How will you nurture, deepen and grow these 10 to 12 clients or customers?
- What capabilities will be tailored to the needs and interests of your key targets?
- What new offerings can you develop to grow these accounts?
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