Most of us understand the basics of 80/20. 80 percent of your results come from 20 percent of your efforts, and 20 percent of your results come from the other 80 percent.
But that’s barely the tip of the iceberg. The real power of 80/20 is 80/202, 80/203, and so on.
To give you an idea, imagine discarding 80 percent of the roads in your city, only look at the top 20 percent, and the 80/20 rule will still apply. 80 percent of the 80 percent of traffic is on 20 percent of the 20 percent of roads.
That means 64 percent of the travelers drive on 4 percent of the roads. That’s 80/202.
Then we do it again: 80 percent of the 80 percent of the 80 percent of the traffic, runs on 20 percent of the 20 percent of the 20 percent of the roads.
In other words 52 percent of the travelers drive on 0.8 percent of the roads. That’s 80/203.
And it just keeps going because 40 percent of the drivers are driving on 0.2 percent of the roads: 80/204. 32 percent take 0.016 percent of the roads. That’s 80/205.
80/20 says that if you have 10 rooms in your house, you spend almost all your time in two or three of them. It says if you hire 10 salespeople, two will generate 80 percent of the sales and the other eight will generate only 20 percent of the sales.
That means that person for person, the two are SIXTEEN TIMES as effective as the eight. That’s right—a good salesperson isn’t 50 percent better, he or she is 16X better. That means there’s huge leverage in 80/20: much to be gained if you pay attention, much to lose if you don’t. It keeps going until you run out of things to count. Top performers are not twice as good as average performers. They’re more like 100 times better.
Everything that really matters in business isn’t linear, it’s exponential. Almost every frustration you have in sales and marketing has something to do with ignoring 80/20.
80/20 for Cold Calling
Cold calling is dead. You should talk only to prospects who are genuinely interested in what you have to sell.
- Don’t use shoe leather and cold calling to generate leads. Think positioning, not prospecting.
- If your company won’t generate sales leads for you, generate them yourself. Mastering at least one form of advertising media beats cold calling any day.
- There are many dozens of sources of advertising, publicity, and traffic. You must master at least one of them.
80/20 Power Triangle
Everything in sales and marketing is summed up in the Power Triangle: traffic, conversion, economics, and 80/20. Traffic comes first, then conversion, then economics. But great marketers think backwards, which means starting with economics.
- Traffic = People who land on your page
- Conversion = People who opt in and the reasons they did. They want the cheat sheet or price quote; they want to take the quiz, or they want the free software download.
- Economics = What they get in exchange for their email address and the value of that address to you.
The 5 Power Disqualifiers
These go hand in hand with the Power Triangle, because these five things define the who of the traffic that you’re trying to buy.
- Do they have the money? Some markets consist of people who have no money. Sometimes the very market itself is defined as a herd of moneyless people.
- Do they have a bleeding neck? A bleeding neck is a dire sense of urgency, an immediate problem that demands to be solved. Right. Now. Serious money is always found in those places.
- Do they buy into your unique selling proposition? A unique selling proposition (USP) is your unique answer to these questions: What does your product do that nobody else’s product does? Why should I buy from you instead of anybody else? What guarantee can you make that nobody else can make? Your most important job as a salesperson or marketer is to not only know the answers to these questions but constantly improve the USP of whatever you sell.
- Do they have the ability to say YES? One can have money but lack an authority to say yes. Two different things. Are you applying for a job through the HR department knowing they can only say no and only the VP can say yes?
- Does what you sell fit in with their overall plans? If your service requires major brain surgery on the part of the customer, he ain’t gonna take your offer unless brain surgery is literally a lot less painful than the alternative (e.g., dying). Whatever you sell needs to harmonize with natural, existing forces—both on the inside and outside of your prospect’s world.
- Why should I buy from you right now, instead of buying anything else from anybody else next week?
- What can you uniquely guarantee?
With the answer to these questions comes your unique selling proposition.
Domino’s Pizza has one of the best-known USPs ever: A fresh, hot pizza delivered in 30 minutes or less, guaranteed.
Here are some symptoms of a bad USP you need to pay attention: You’re constantly fighting downward price pressure. You battle directly with other people on price and delivery. You feel competitors breathing down your neck. The cost of advertising seems out of reach. You feel defensive about taking up customers’ time. Nobody really wants to talk to you. You have to knock on lots of doors.
80/20 for Ads
How fast can you go from zero to dominating a market? As fast as you can split test.
You write 50 ads. Eventually, one of them is gonna fetch as much traffic as the other 49 put together. The good news is most people don’t even test five. That’s the 80/20 of ad writing, and in online advertising, testing is what separates the men from the boys.
The same applies for web pages. You can optimize most of your sales funnel by optimizing a handful of vitally important web pages. The rest can just be “good enough,”.
Perfection Vs. Good Enough
When you embrace 80/20 there’s always going to be some unfinished detail. But there will also be something in your success formula that demands perfection.
If you’re a concert pianist, then every note must be right; 80 percent right will not do when you’re performing at Lincoln Center in Manhattan. And in any company, profession, or success story, there is a very small number of things that truly have to be perfect.
Be encouraged to know that you can become successful and even famous by achieving perfection in one tiny corner of your world. And please remember that everything else just needs to be good enough.
You might be able to close 50 percent of the customers you present to, and your salespeople may be able to close only 25 percent. But if you want your company to grow, you’ll need to accept their imperfection and move on to higher-value tasks.