Why the 80/20 Rule in Sales Wrong

In the quest for the perfect sales strategy there is a timeless debate that continues to rage on: work harder - or smarter? Those for working harder see their opponents as lazy bookworms who, if they only got their noses out of research might actually accomplish something; those for working smarter view their opponents as aimless droids mindlessly attacking random prospects without a plan. Of course, the truly optimal strategy is not to be found in either of these extremes—to be successful, you need to work both smarter and harder.

Most would agree the formula is simpler for working harder: put in the time and effort and results begin to increase. Top of mind is the rep who is first to the office in the morning, grinds all day, and is last to leave. Most people won’t argue that dedication like that pays off. But how to work smarter? For most people, this is a more difficult concept to nail down.

Anyone with a background in sales is probably familiar with the Pareto Principle, also known as the 80/20 Rule. The principle states that just 20% of your effort leads to 80% of your results. You can imagine the leverage you’d gain by knowing which 20% of your effort will get you those results. Now, what if for sales teams the ratio were actually much more powerful...85/15? 90/10? 95/5?

The InsideSales.com Labs team put together a study called the Power of Prioritization, where we set out to answer two questions: (1) how much better are your best accounts? and (2) how much effort do reps spend on their best accounts? Our results may surprise you.

While most salespeople know intuitively that their best accounts close at a much higher rate than their worst accounts, we wanted to quantify that advantage. We found that on average your best accounts convert 98.8% better than your worst accounts—nearly twice as often! For the second question, first we used our AI-powered scoring engine to rate millions of accounts on likelihood of converting and closing. Then we analyzed all the activities reps had performed on these accounts, noting which led to conversion and which did not. Our data showed that reps spent just 0.5% of their time on accounts that actually converted and 99.5% of their time on accounts that didn’t. Let me repeat—99.5%! This is a huge problem! I’ve looked at literally millions of data points across thousands of companies, and one thing I find to be the case more often than not is that salespeople think they know what they are doing. They tend to trust their instincts, thinking they’re spending time focused on the right accounts, but they’re not. Reps play this dangerous game every day, and it’s costing them and the companies they work for millions of dollars. If leaders could solve this prioritization problem alone, their teams could increase their ability to convert prospects into opportunities by 46.1%. We call this idea the Law of Prioritization.

Just like the Law of Gravity is affecting you whether you like it or not, the Law of Prioritization is affecting your team right now whether you like it or not. No matter where you fall in the harder vs smarter debate, there are accounts in your CRM that are twice as likely to buy from you than others, and chances are you’re not focusing on them like you could be. Want to solve this problem for your team?

Click here to learn more about the Law of Prioritization and how InsideSales.com can help you stop wasting valuable effort and build the pipeline that will make your organization thrive.