The New 80:20 Rule

The New 80/20 Rule

?Vilfredo Pareto, the Italian economist, discovered the 80/20 principle in 1897, which is now referred to as Pareto’s principle.

He discovered that 80 % of the output from any activity results from 20 % of the inputs; 80 % of the consequences result from 20 % of the causes and 80

% of the result comes from 20 % of the efforts.

20 % of the customers contribute to 80 % of growth; 20 % of services account for 80 % of turnover: 20 % of employees account for 80 % of productivity; the opinion of 20 % defines the society; the output of 20 % of the population defines the economy of our country.

Perry Marshall, Google and social media expert, has given an innovative interpretation to this concept in his incredible new book, “80/20 Sales and Marketing.”

?Here’s how Perry Marshall has taken the Pareto Principle to the next level. He found that the Pareto Principle is exponential! Let me explain. We already know that 20% of your customers represent 80% of your revenues. What Marshall found is that, within that initial 20%, the 80/20 rule also exists. This means that the top 20% of the top 20% of your customers (or the top 4% overall) represent 64% of your sales.

Imagine, your top 4% represents 64% of your sale.

Hence, this 80/20 rule has acquired a new meaning in today’s business.

Most organizations and particularly sales Managers are obsessed with working with under-producers and non-performers to improve their productivity. Regular training programmes are conducted and HR policies are changed every quarter to create an environment, which is expected to motivate employees.

At the same time, top performers go unattended and their performance is taken for granted. The easiest way to lose your top performers is to ignore them in favour of “trivial many”.

The new 80/20 % thinking is the secret of achieving more with less.

Focus on strong performers and make them stronger. Start celebrating exceptional productivity, instead of raising average performance. Reward excellence in a few stars instead of wanting to raise the average productivity in many.

Don’t waste too much effort on 80 %, which will yield very little in return. Transform your thinking. Revamp your outlook. Allocate your resources from unproductive “trivial many” to productive “few stars”. Your effectiveness will depend on how you manage and control this 20 %.

Focusonthetop20%and80%ofeverythinginyourlifewillbetakencare of.

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