Make The 80:20 Rule Work For You

Posted: August 11, 2015 by Jaime Stenning

Here is a quick action plan that uses The 80:20 Rule, also known as the Pareto Principle, to get you more profitable customers.

The Pareto Principle

The Pareto Principle is the theory that 80% of effects come from 20% of causes. When it is applied to business theory, 80% of your profit will come from 20% of your customers.

Action Point

Write down a list of your ‘Top Ten’ clients by profitability – What do they have in common?
[eg Company A,B,C… they are all spending more than £100,000 pa]

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Talk to them to find out about how they heard about your business/product and how they use your product.
This will give you a better idea of how you can find and sell to similar companies.

Now answer these questions:

• What do they have in common?
• Where did you meet them?
• Where can you find more customers like them?
• Do you put in significant effort to acquire more customers like them?
• Do you have similar clients in the pipeline?
• What actions can you take over the next 30 days to acquire a new customer like them?

This should put you in a good position to find more customers as profitable as your Top Ten.

Robert Craven (@robert_craven) is an international Keynote business speaker, author, consultant and owner of The Directors’ Centre, a consulting and training company which helps owner-directors run the business they want to run.

His latest book Grow Your Digital Agency, which provides the business fundamentals that every growing agency needs to address, is now available.