Making the 80/20 Rule Work for Sales

by: Joe Connelly (VP Sales)

The 80/20 Rule states that 20% of your effort will get you 80% of your results. This highlights that return on effort is disproportional in nature – maybe even unfair. Successful sales people know the impact of this rule when applied to their time and their business. Yet why do so many sales people not consider this rule on a daily basis?

I guess there are a few reasons:

  1. By nature, most sales people genuinely want to help people. It is really hard for them to say “no” to a customer who might represent an order even if it is a small dollar amount.
  2. Salespeople are inclined to “go after everything” (i.e. don’t leave a single order unturned)
  3. You never know if a small customer with a small order will become a big customer with a big order some day.
  4. Small customers with small orders might ‘refer’ you to other higher potential customers.
  5. Your reputation could be impacted if you don’t go after every order for every customer.
  6. It feels like too much of a gamble to go after the bigger orders, so let’s play it safe by going after everything.
  7. It’s too much work to go after the bigger customers.

Sound familiar? Of course your level of effort is not always just about the size of the customer or the order. It includes things like your commute time to a customer location, your preparation time for one customer vs. another, your understanding of the account and its potential, etc.

Some of the ways to make the 80/20 rule work in your favour are:

  1. Make time management a critical skill that must be mastered.
  2. Apply time (and thought) to where orders actually come from, their size and ability to be repeated.
  3. Focus on the right opportunities so that time does not become the barrier to higher revenues as it is with handling lots of smaller customer orders.
  4. Pick the customers that have potential both now and in the future.
  5. Become skilled at identifying and going after the bigger orders (YOU DECIDE where to play, so why not decide to play in the big league?).

Follow this advice and chances are high that your revenues will increase significantly (remember I am not suggesting saying “no” to all small customers, just choose them wisely and don’t let them absorb all of your time).

My personal experience of coaching senior sales people and VPs of Sales is that time is a constant enemy that few master. Those who do set themselves apart from crowd! Why not set aside 30 minutes at the start of each week to THINK about your business and how to apply brainpower rather than brawn to increasing your revenues and success?

As someone once asked me “If you can spend a day to get a $10,000 order, or spend a day to get a $20,000 order, which day would you most like to replicate?”

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