Who is Pareto, And What Is He doing With Your Customers?

Who is Pareto, And What Is He doing With Your Customers?

Vilfredo Pareto was, among other things, an economist who pointed out that 80% of the property in Italy was owned by 20% of the population. Which, standing alone, isn’t all that noteworthy of an observation. He continued to point out that this 80/20 rule was noticeable in nearly all situations where data could be gathered and measured.

  • Roughly twenty percent of the population controls 80% of the world’s money.

  • A study in 2019 revealed that 20% of the population incurs 80% of healthcare costs.

  • Eighty percent of crime is committed by 20% of those with criminal tendencies.

  • Eighty percent of internet searches are for the same 20% of topics.

  • Twenty percent of the words available in the English language are the most common, while 80% of those remain neglected.

  • As I write this in my favorite coffee shop, I recognize that approximately 80% of the patrons are repeat customers, and the other 20% are more rarely seen or visitors who may be one-time visitors from a nearby hotel.

  • Writing this article has revealed that my fingers are not accustomed to hitting the SHIFT + 5 button, and approximately 80% of the time, I am hitting CAPS LOCK + 5 and having to go back and correct my error.

How this affects you, a member of the very trackable and measurable sales profession, may already be extremely obvious. Let’s explore it, however, and see how you can simplify your day and earn more income.

Where Is Your Money Coming From

As I already mentioned, 80% of your sales will likely come from 20% of your customers. More impactfully put: 80% of your income comes from 20% of the people you contact.

Repeat Customers

It’s probable that when you contact that 20%, your closing ratio will likely be 80%, rather than the 20% closing ratio you have with 80% of your standard prospecting calls.

You should be very intentional with your time and spend 80% of the time you’ve set aside for business development on maintaining relationships with that top 20% of customers. Then 80% of the remaining time and effort on the 20% new prospects you identified as the most likely to purchase from you.

Are You The 20% Or The 80%

The Pareto Principle will likely reveal

  • 80% of the sales made by your company are closed by a mere 20% of the salespeople.

  • 80% of the remaining staff probably experiences 80% turn-over over time.

  • 20% of new salespeople are diligent enough to develop into career salespeople.

  • Underperformers will likely spend only 20% of their time on productive career activities.
    • And 20% of that time working and genuinely fruitful things.
  • The top 20% are likely to spend 80% of their time doing productive activities.

  • The bottom 80% are likely only to spend 20% of their time learning new things and building skills.

  • 80% of top performers start their day working on deals that are 80% likely to result in an early sale giving them an 80% boost in momentum.

  • 80% of underperformers start their day chatting about last night’s TV show, sports, their romantic interest, or other activities that do not generate income.

  • 80% of salespeople will read this article and try to disprove the statistics.

  • 20% will get the point, fine-tune their process, and increase their income by 20%.

  • 80% of your satisfied customer will give you a referral

    • 80% of referrals will enter the sales process ready to make a purchase based on the recommendation of your loyal customer.

If you genuinely wish to study, learn, grow and get better at your sales career, I can’t encourage you strongly enough to spend at least 80% of your evening tonight examining how you spend your time and looking for ways to improve.

By the way, I drank 80% of my coffee this morning before it got too cold to be enjoyable.  The good news is that I only do this about 20% of the time.

A quote by Glen Pavlovich.

This article originally appeared on CloserClasses.com

Closer Classes Logo

Dealership Sales Training

 

FREE GIFT

Get your free "Post COVID Car Sales" Ebook for signing up!

You May Also Like…

Building Value

A prospect decides to make a purchase when he realizes...

You May Also Like…

Your Perfect Plan

Your Perfect Plan As you plan your future, whether we’re talking about your monthly sales volume, income goals,...