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> Living on the Top Line - The Book > Joe's Blog > What the Heck is 80/20 Thinking, and Why do You Need to Use It?
What the Heck is 80/20 Thinking, and Why do You Need to Use It?The principle of imnbalance as originated and developed by Vilfredo Pareato in 1897 is a "law" of economics not one of physics, but it has as strong an effect on all our daily lives as many natural physical laws. You all know this principle. Simply put, Pareto's principle tells up that a small number of influences or causes produce a large percentage of total results. We know this as the 80/20 principle, but there can be many different results, and the numbers don't have to add up to 100% either. You can have 25% of your sales staff produce 90% of your volume, or 50% of your products produce 100% of your sales. This is because there are two different data sets; the first example being for 1. salespeople and 2. sales volume, and the second example is for 1. products and 2. sales volume.
Here's why the 80/20 law should be important to us all: The principle of imbalance tells us that 20% of our work produces 80% of our results. That seems to mean that 80% of our work, doesn't produce much in the way of results. Could we stop doing that 80% and spend more time doing the 20% things and get even more good results?
Well, according to Richard Koch whose 1998 book which I recently re-read, you can! I know that of all the things I've taught salespeople to do in all the programs I've developed over the decades, only a few things are truly critical to success. If I spent more time teaching those things and more time coaching those behaviors, stores would have done more business. My current sales training for salespeople concentrates all effort on two things, and everyone thinks I've gone crazy and become senile. The two things are sketching rooms, and follow up. Nothing else matters. Do these two things well, and everything else takes care of itself.
If you're a sales manager or store owner, you don't have to spend any time on any other core sales training issues. You do need an overriding strategy for serving customer's true needs, but as far as sales training, all you need to do is teach these two things.
I don't want you to spend any less time training, I just want you to spend all your training time on these two things; learn how to talk about customers' rooms, and get 'em back a second time when they don't make the purchase the first time.
Now you'll argue that product training is important, and I agree. But product training is simply information, and too much of it at that. Knowing your product is a job requirement. How to use the information correctly with customers is a subject for training, but interpersonal selling skills - connecting to the people - is something people have to bring with them to the job. Forget about trying to train anyone to have a better personality.
Now, I challenge you to inventory your work and find that 20% of really highly productive things you do that produce big sales increases, and quit doing all the other things. Stop wasting your time on things that don't produce more sales, more success for your sales staff, more satisfied customers, and more money for everyone in your company.
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