Coming from a sales background and calling on doctors we know about the 80/20 rule what I discovered recently was that not everyone doing sales is aware of Perato’s law.
You see some people who have to sell every day haven’t necessarily been exposed to the sales training that you get at a corporate level. Companies will spend 10’s of thousands of dollars on sales training PER year!
I made an assumption the other day when I mentioned the 80/20 rule to a solopreneuer and they didn’t know what I was talking about.
When Chet Holmes was in the magazine advertising space he applied the 80/20 rule to his sales position. When he first started with the magazine it was making very little in advertising. So he analyzed the competitive magazines and noticed a trend.
He found that there were only about 100 companies who bought ads consistently in the competitor’s magazines.
So he focused all his efforts on getting them to switch to his magazine he called the list the Dream 100.
He focused on 20 percent of the businesses that did 80 percent of the ad spend.
Are you measuring the wrong things in your business?
Steve Jobs said once, “If you go to New York City and get an average taxi cab driver versus the best taxi cab driver, you’ll probably get to your destination with the best taxi driver 30% faster... but the difference between the average software developer and the best is 50:1, maybe even 100:1.”
Bell curves hide performers. The 80/20 Curve makes performers obvious. If we have 1000 people on an email list – 80% of your business comes from 20% of the list, in this case 200 people.
Segmenting your audiences by tagging them sends them very targeted emails. Blasting or Broadcasting your message to your whole list and they could end up in a spam folder.
Which means gmail has done the segmenting for you!
What’s worse is that a handful of those people could have been in the 20 percentiles.
If we apply the 80/20 rule to your business even further – meaning of that 20% there are customers who will spend 4X the money with you and another 1% that will spend 50 X the money.
When you eliminate the bottom 80%, the 80% still applies. 80/20 to the second 80/20 to the third, forth and fifth down the line. This taken from the 80/20 from Perry Marshal.
As you know I like to teach what I’m reading. The fastest way to grow is to build a list a list and the quality of that list falls directly into the 80/20 rule. Build your list. Can I say that enough?
Why split testing is key to your marketing. Split test everything, the picture, the audience, the message. When you have a landing page, split test. The copy, the pictures and the buttons. Tweaking everything will increase your performance. Improving this every day.
A lot of entrepreneurs are creative people, whether that’s with copy, graphic design, photography or coaching. What most entrepreneurs don’t do is market research. Market research is a discipline.
Testing is key and we stop short on this too often. If you test 5- 10 ads and give up when the winner tests 50 and it pays off. : Don’t sell harder market smarter.
Let go of the of grunt work the low paying jobs. Focus on the $1000 per hour work in your business. I like to learn and then pass if off just so I understand how to do it and I’m not being led blindly.
There are two areas of Hidden money in your business. The first place is in payment processors. After you are in business you need to re-evaluate your percentage rate. When you first start out you are pegged as a higher risk.
But as your business grows you give them more and more money, so go back and renegotiate your percentage with your bank or your stripe account.
The other area this happens is with course platforms. If you are paying them a percentage at the beginning and you are just starting out then YOU win but if you have 100’s of people going through your course a month and you are still paying them by a percentage, you need to switch to a monthly plan.
When asked what was the one thing world class musicians missed or hated most while on tour, they all made the same comment. It wasn’t being away from home, being stuck on a tour bus…it was PRACTICING.
It’s practice…. repeat IT until you’ve mastered it. Remember, it’s not about the product you sell it’s about how you market your product. Be obsessed with marketing, if you’re not then pay someone to do this for you. Out of the hundreds of things you can obsess about, only on 3 or 4 matter right now.
1: Build a brand 2: build a system 3: Build a list 4: nurturing that list. Create a marketing plan START PAYING FOR ADS before they become out of reach.
If you use words to sell, then you need to become an Uncommon Brand.
If you want to Standout in a Crowd…go to The Uncommon Brand and apply for the Business Breakthrough Retreat.