The 80/20 rule is an observation that in society, a business or a team, 80% of the results come from 20% of the individuals. 20% of your sales team land 80% of your sales. 20% of your clients produce 80% of your revenue. It’s important to look at every area of your business and see how you can attract more of the 20% and let go of more of the 80%.
Improve Your Customer Acquisition
Use Google Analytics to see which sources of traffic are producing the majority of your conversions. Is it organic, paid, social media, email, direct or referral traffic? Can you see the 80/20 split among them? Find out which sources are converting the best for you and focus on improving them. For example, if email is your winning channel, put more of your time into creating email offers, segmenting your lists, split testing headlines, improving your email design and creating videos for your email subscribers. In short, put 80% of your marketing time into them. On the flipside, if there are channels of marketing that are draining the bulk of your time and not converting, stop them. Use 80/20 discipline to hone your marketing mix.
Improve Your Team’s Performance
In any department in your business, you’ll see the 80/20 rule at play in your staff’s performance. General Electric’s former CEO, Jack Welch famously applied this understanding to increase his company’s value by 4000% over the course of his time in charge. Throughout the organisation, the top 20% of performers were rewarded generously, the next 70% were offered training to improve and the bottom 10% were let go. While other businesses take a less ruthless approach, it’s important to know how your staff compare in their productivity and contribution to your business. You can then focus on nurturing your top performers and helping the rest to emulate them.
Get Rid of Time-Sapping Clients
Do 20% of your clients contribute 80% of your problem-solving time? This could be through phone calls, emails, in-person meetings and more. Is the problem solving justified or does it go above and beyond what should be reasonably expected of you? Look closely at whether you need to continue working with these clients. While it can be hard to let anyone go, moving on from these clients will free up a large amount of time for you to pursue new high quality clients.
Improve Your To Do list
Take a look at your to do list. While it includes all the things you’d like to complete today, only a small subset of those tasks truly matter for your bottom line and long term success. Rather than working in order of the tasks you write down, complete the top 20% of your ‘most valuable’ tasks first. Only move on to the remaining 80% when they’re done.
Incorporate 80/20 thinking into your management style and you’ll see steady improvements to your revenue, productivity and satisfaction.