You may have never heard of the “80/20 rule”, but it’s a term that you won’t forget. It’s more commonly known as the “Pareto Principle”, which is the belief that there’s an 80/20 relationship between effects and the causes. But, what has this got to do with marketing and sales?
If you’re 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, it’s time to focus your resources and efforts on those top 20% customers.
Here’s a few strategies that you could use…
- Market to the right customers by keeping up to date with who’s 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 there’s one particular location that’s 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. You’ll always encounter prospects who are tricky to deal with, but it’s important you work out whether they’re 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 aren’t 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. Don’t 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 doesn’t just apply to your customers. It can also be applied to who/what’s involved in making the sales…For example, it’s 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, it’s time to start implementing it into your business framework immediately. Whether it’s customer or sales people focused, you’re bound to benefit from this underrated technique!