80/20 Sales and Marketing
eBook - ePub

80/20 Sales and Marketing

The Definitive Guide to Working Less and Making More

  1. 240 pages
  2. English
  3. ePUB (mobile friendly)
  4. Available on iOS & Android
eBook - ePub

80/20 Sales and Marketing

The Definitive Guide to Working Less and Making More

About this book

Guided by famed marketing consultant and best-selling author Perry Marshall, sales and marketing professionals save 80 percent of their time and money by zeroing in on the right 20 percent of their market and applying 80/202 and 80/203 to gain 10X, even 100X the success. With a powerful 80/20 software tool (online, included with the book), sellers and marketers uncover how to slash time-wasters; advertise to hyper-responsive buyers and avoid tire-kickers; gain coveted positions on search engines; differentiate themselves from competitors and gain esteem in their marketplace. With the included tools they’ll see exactly how much money they’re leaving on the table, and how to put it back in their pockets. Sellers will identify untapped markets, high-profit opportunities and incremental improvements, gaining time and greater profit potential. Supported by online tools from Marshall, including The 80/20 Power Curve, a tool that helps you see invisible money, and a Marketing DNA Test, a personal assessment that zeroes in on one’s natural selling assets, this timeless guide promises to change the game for seasoned and novice marketers and sellers.

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Information

Publisher
Entrepreneur Press
Year
2013
Print ISBN
9781599185057
eBook ISBN
9781613082362
Topic
Business
Subtopic
Digital Marketing
Index
Business
CHAPTER 1
How 80/20 Works and Why
A few years ago I held a seminar in Chicago called “The 80/20 Seminar for Direct Marketing.” To my knowledge it was the first such conference or seminar. It cost $3,000 to attend and I had about 80 people in the room. All of them ran businesses of one kind or another, most of them online. To illustrate the all-pervasive nature of 80/20, I said, “Everybody stand up if you have shoes on.”
Everyone stood. I said, “If you own fewer than 4 pairs of shoes, please sit down.” A bunch of people sat down, and about 50 were still standing.
“If you own fewer than 8 pairs of shoes, sit down.”
More people sat down, about 30 left.
“If you own fewer than 16 pairs of shoes, sit down.”
Thirteen people, 9 of them women, still standing.
“32 pairs of shoes.”
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Three women standing.
I smiled. “Don’t be embarrassed, ladies. Just tell the truth, cuz I’m illustrating a principle here. How many of you have more than 64 pairs of shoes?”
Two sit down. One left standing. She cringes with embarrassment.
“How many shoes do you have?”
“Umm, about 80.”
“Thank you so much. You can sit down now. Give this woman a hand!”
Everyone clapped. “20 percent of the people own 80 percent of the shoes. Can you see that?” I said. All nodded in agreement.
“Everybody stand up again—everyone who owns at least one domain name.” They were all marketers, so it was pretty much everybody.
“Sit down if you own fewer than 10.”
Half the room sits down.
“Fifty.”
Half again sits down. We’ve got maybe 20 still standing.
“Two hundred.”
A bunch more sit down, 10 standing.
“Five hundred.”
Five people left. I keep going—1,000, 2,000, 5,000.
At 5,000 domain names, I’ve got two people left. At 10,000, one guy sits down.
Mickie Kennedy from Baltimore, one of my best customers, is the only one left standing. “How many domain names do you own?”
“Twelve thousand.”
Mickie was a “Domainer,” the domain-name equivalent of flipping real estate. He owned entire portfolios of domain names, some selling for tens of thousands of dollars.
20 percent of the people owned 80 percent of the domain names, and in a room of 80 people, one guy owned nearly half.
Almost everything is like that.
Not absolutely everything—but most things. Shoes, domain names, Bible verses, trips to Vegas, pearl necklaces, consumption of dinner napkins, tubes of lipstick. Rabbit populations, streams and rivers, size of cities in southern Argentina, passengers on London’s underground “Tube” trains. Net incomes, profit margins, software development timelines. Foreclosures, trips to the tavern, and trips to the emergency room. Diameters of stars and planets, and the size of craters on the moon.
Why rattle off this scattered list of things in a business book? Because if you can see 80/20 at work in this list, you can identify it in any part of your business. Once you’ve learned to recognize it, you can’t not see it. Look at the tree outside your window: 80 percent of the sap travels through 20 percent of the branches.
If you have 30 customers, you’re tempted to treat them all the same. Well they’re really not the same at all. Odds are, 20 percent of your business comes from just one of them. The size of those customers really looks like this, in Figure 1-1.
All these things obey the 80/20 principle. That’s because 80/20 isn’t a mere rule of thumb, and it’s not just for business. It’s a law of nature. John Paul Mendocha observed that 80/20 is literally the “Invisible Hand” that Adam Smith wrote about in his landmark book, Wealth of Nations, when Smith made his case for free-market capitalism in 1776.

Figure 1-1. Customers are notoriously unequal. If you have 30 customers, their capacity to spend money with you looks like this. The first customer generates 20 percent of your business, the next two largest give you the next 20 percent, and so on. The same principle of inequality applies to almost everything in your business. (Illustration by Danielle Flanagan.)
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It’s not the exact number 80/20 that’s the rule; it’s the principle of positive feedback, which is when behavior is rewarded so that it produces more of the same behavior. Sometimes it’s 60/40 or 70/30; sometimes it’s 90/10 or 95/5. The exact numbers aren’t so important. But it’s always there.
It’s a law that almost nobody ever gets taught in school. In fact, our current educational system trains most of us to be blind to it, ignore it when we do see it, and even fight it as our enemy, instead of embrace it as our friend.
Exceedingly rare is the person who truly understands it in all its depth, and I discovered a new insight, a new approach that I’ve never found about 80/20 anywhere else.
Almost nobody reads simple election statistics that “14 percent of the voters turned out at the polls in this election” or “5 million people donated at least $5 to the election campaign” and translates it into a vivid, meaningful picture of those people, all the way from casual interest to rabidly passionate and addicted.
Few people ever even consider that a tiny minority of the donors give almost all the money. And that the one million smallest donors gave less money than the top ten.
Even if you’ve got average math skills, in literally 60 seconds you’ll be able to predict, with spooky accuracy, that 735 donors gave that same election campaign more than 10 grand—with a simple web page you can pull up on your smartphone.
If your job has anything to do with raising money, you better darn well know that those 400 donors exist, what they look like, and where to find them.
It might also be useful to know that there were 17 donors who gave over $250,000.
With some very simple tools that come as a bonus with this book, you can punch in a few numbers on your phone or computer in seconds, and make spooky-accurate guesses. How many gave over $5,000? You’ll know.
At lunch on the back of a napkin, you’ll be able to shuffle through all kinds of ordinary facts about your business—how many customers, how many VIP members, how many shoplifting incidents, the number of people who opened yesterday’s email. You’ll easily assign dollar figures to all and instantly know which opportunities are worth pursuing and which ones waste your time and money.

80/20 101

80/20 says 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 in 80/20 is that you can disregard 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.

The Leverage Power of 80/20 Is in the Layers
80/201 = 16:1
80/202 = 250:1
80/203 = 4,000:1
80/204 = 65,000:1
80/205 = One million to 1
... and so on.
If you’re not a math person, stick with me and I’ll make this abundantly clear. This is relatively simple and HUGELY important, because if you want to influence that traffic—say, sell them something by putting up a billboard—you can accomplish as much with one billboard on a major expressway as 100,000 yard signs on residential streets. That’s just a simple, elementary example of leverage. As the story unfolds, you’ll discover far more.
You can climb as high as you want, until you run out of roads or customers or products or people. If you have enough numbers to run 80/20 five times, your winners are a million times better than your losers. That’s million-to-one leverage, and it’s not a joke. It’s rea...

Table of contents

  1. Title Page
  2. Dedication
  3. Foreword
  4. Introduction
  5. CHAPTER 1 - How 80/20 Works and Why
  6. CHAPTER 2 - Rack the Shotgun
  7. CHAPTER 3 - You Can Do Better
  8. CHAPTER 4 - 80/20 Traffic
  9. CHAPTER 5 - How to Use the “Invisible Money” Finder at www.8020Curve.com
  10. CHAPTER 6 - Simplify Your Life with the Power Triangle
  11. CHAPTER 7 - 80/20 Conversion Now That You’ve Racked the Shotgun, Make ’Em MOVE
  12. CHAPTER 8 - Your USP
  13. CHAPTER 9 - It’s Not Failure. It’s Testing.
  14. CHAPTER 10 - Scale Up-Massively
  15. CHAPTER 11 - Expand, Diversify, and Conquer Planet Earth
  16. CHAPTER 12 - Make More From Every Customer
  17. CHAPTER 13 - Power Guarantees
  18. CHAPTER 14 - 80/20 = Harnessing Natural Forces
  19. CHAPTER 15 - Do You Wanna Make $10 Per Hour? Or $100, $1,000, or $10,000?
  20. CHAPTER 16 - Make $1,000 Per Hour Doing What You Love
  21. CHAPTER 17 - 80/20 Hiring and Outsourcing
  22. CHAPTER 18 - How to Get More $1,000 Hour Work Done with a Personal Assistant
  23. CHAPTER 19 - Fire the Bottom 10 Percent!
  24. CHAPTER 20 - 80/20 Controversy
  25. CHAPTER 21 - 80/20 Market Research in a Single Afternoon
  26. CHAPTER 22 - 1,000 Things to Pay Attention to—Only Three or Four Matter Right Now
  27. CHAPTER 23 - RFM: The 3-D 80/20 of Profitable Marketing
  28. CHAPTER 24 - “My Latte’s Too Foamy!”
  29. CHAPTER 25 - Finally Achieving Breakthrough
  30. EPILOGUE
  31. APPENDIX - The Power Curve and 80/20 for Math Geeks
  32. About the Author
  33. Acknowledgments
  34. Index
  35. Teaser chapter
  36. Subscribe to Entrepreneur Magazine
  37. Copyright Page

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