You may have never heard of the โ80/20 ruleโ, but itโs a term that you wonโt forget. Itโs more commonly known as the โPareto Principleโ, which is the belief that thereโs an 80/20 relationship between effects and the causes. But, what has this got to do with marketing and sales?
If youโre a business, you can use the 80/20 rule to your advantage in your sales and marketing by using it as a guide for your strategies. For example, a business 80/20 rule could be that 80% of your sales are generated by 20% of your customers. So, how do you use the rule to your advantage in this scenario? Well, itโs time to focus your resources and efforts on those top 20% customers.
Hereโs a few strategies that you could useโฆ
- Market to the right customers by keeping up to date with whoโs frequently making purchases or purchasing the most. You can then point all of your marketing efforts in their direction and use what you know about them to attract a similar audience.
- Find out where your top customers are by checking your point of sale (POS) for location of your most successful sales. You may find thereโs one particular location thatโs outdoing the others, so you can use this information to your advantage and use marketing strategies to boost your sales there even more.
- Keep track of your buyer behaviours and find out what drives them to make a purchase. Consumer behaviours are constantly changing, but following their buying journey will give you insight into what actions they take on the lead up to a purchase.
- Put your time into the right customers by setting the right expectations from the get-go. Youโll always encounter prospects who are tricky to deal with, but itโs important you work out whether theyโre worth pandering to or not. Work out whether that demanding customer is in your top 20%, and if not, focus your efforts on customers who arenโt going to waste your time.
- Take care of your best customers, try not to forget about them when these strategies start working and waves of new customers start rolling in. Donโt let your marketing efforts or standard of customer service slide with your top 20%, otherwise you could be at risk of losing them. You can even start engaging with them on a more personal level as you continue to gather valuable information from them and their buying activities.
However, the 80/20 rule doesnโt just apply to your customers. It can also be applied to who/whatโs involved in making the salesโฆFor example, itโs important to keep a check of who your top 20% salespeople are and their selling strategy. Ask yourself, what techniques are they using? What are they doing differently to your other sales team members? How are they interacting with customers? This enables you to train new or existing team members in techniques that you know are successful.
Whatever strategy you decide to use, the 80/20 rule is vital to your sales and marketing efforts. Although you might not have been familiar with it before, itโs time to start implementing it into your business framework immediately. Whether itโs customer or sales people focused, youโre bound to benefit from this underrated technique!