In my last article I said that what Pareto highlights is the power of leveraging. That means identifying the smallest amount of effort that’s needed to produce the biggest result. His fabulous principle, I promised, can be applied to the three balls you need to juggle in your business, no matter what sort of business you are in, to get the best possible results.
So let’s go with ball number 1 which relates to your customers.
Applying Pareto’s mighty principle means that 80 percent of your business (and profit) is generated from around 20 percent of your customers.
But here’s the 64-dollar question. Do you know who those profitable 20 percent are precisely? If you do, are they getting the time investment commensurate with their value to you and what are you doing to make them feel special over and above the normal good service that you give the rest of your customers? More importantly, when you have identified them and find some common characteristics, what are you going to do to find more prospects like them?
How to Increase Profits by 800%
This is the cornerstone of great business and too often is overlooked in the pursuit of a profitable business.
Simple stuff you can apply now. Get it here
If you don’t know who this elite 20 percent group are, you can find out by listing your customers in descending order of the revenue they’ve generated in the last year or so. Then start adding down from the top until you’ve got 80 percent of the revenue and by golly there’s that magical top 20 percent. Now that you know them, work on both them and getting more customers like them and see your results improve!
The second ball is coming up in a future article.
Recent Comments