360° Coverage : Pareto Principle: How To Use It To Dramatically Grow Your...

10 Updates
Pareto Principle: How To Use It To Dramatically Grow Your Business

Pareto Principle: How To Use It To Dramatically Grow Your Business

Jan 20 2014, 9:24am CST | by

The Pareto Principle is very simple, yet very important. It is named after Italian economist Vilfredo Pareto, who, in 1906, found that 80% of the land in Italy was owned by 20% of the population....

Filed under: news

 
 
 

27 weeks ago

Pareto Principle: How To Use It To Dramatically Grow Your Business

Jan 20 2014, 9:24am CST | by

The Pareto Principle is very simple, yet very important. It is named after Italian economist Vilfredo Pareto, who, in 1906, found that 80% of the land in Italy was owned by 20% of the population.

What was most important about Pareto’s finding was that this 80/20 distribution occurs extremely frequently. For example, in general, 20% of your customers represent 80% of your sales. And 20% of your time produces 80% of your results. And so on.

The Pareto Principle, or “80/20 Rule” as it is frequently called today, is an incredible tool for growing your business. For instance, if you can figure out which 20% of your time produces 80% of your business’ results, you can spend more time on those activities and less time on others. Likewise, by identifying the characteristics of the top 20% of your customers (who represent 80% of your sales), you can find more customers like them and dramatically grow your sales and profits.

Now while the Pareto Principle or 80/20 Rule has been used by savvy business owners and executives for years, a recent and unique interpretation of the principle has taken its importance and power to a whole new level. I learned about this innovative interpretation in Perry Marshall’s incredible new book, “80/20 Sales and Marketing.”

Here’s how Perry Marshall has taken the Pareto Principle to the next level. He found that the Pareto Principle is exponential! Let me explain. We already know that 20% of your customers represent 80% of your revenues. What Marshall found is that, within that initial 20%, the 80/20 rule also exists. Meaning that the top 20% of the top 20% of your customers (or the top 4% overall) represent 64% of your sales (calculated as 80% times 80%).

Now you have a distribution in which the top 4% of your customers account for 64% of your sales. So you can find more customers like them. And importantly, the Pareto Principle scales to the third power, and fourth power, and so on when the numbers are great enough.

Importantly Perry Marshall’s “80/20 Sales and Marketing” succinctly explains the exponential power of the Pareto Principle, and then focuses on ways to apply it to your business to quickly grow sales and profits. For example, he teaches his “rack the shotgun” technique for quickly identifying potential customers who are ‘top 20%-ers’. He explains how to use the principle to get customers to call you (and never have to cold call again). He shows how to use the 80/20 rule to hire the absolute best talent. And perhaps most importantly, he explains how to use the rule to generate the maximum value and profits from your customers.

The Pareto Principle or 80/20 rule is an extremely powerful tool, when properly applied, for growing any business. The key is knowing how and when to apply it, and leveraging its exponential properties. Perry Marshall does an outstanding job in his book of providing clear examples and action steps for businesses to reap great profits. Perhaps most interestingly, Marshall is currently selling “80/20 Sales and Marketing” for only 1 penny on his website. As the master user of the Pareto Principle, I’m assuming he’s using this unique technique to identify the top 20% of the top 20% of business owners and executives. That’s powerful.

Source: Forbes Business

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was told today ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by robbers. ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rakyat to ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minist ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the sou ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in c ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

8 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mo ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

8 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocati ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

8 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar S ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrar ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Galaxy that acts as cosmic magnifying glass discovered
Washington, Aug 1 (IANS) Using NASA's Hubble Space Telescope, astronomers have unexpectedly discovered the most distant galaxy that acts as a cosmic magnifying glass.
 
 
Watch your waistline for diabetes risk
London, Aug 1 (IANS) A British health report has warned that adults with a large waistline are five times more likely to develop type 2 diabetes.
 
 
Now SEPA to facilitate euro payments
Brussels, Aug 1 (IANS) The European Commission said Thursday that the Single Euro Payments Area (SEPA) would become fully operational in all euro zone countries from Aug 1, 2014 onwards.
 
 
Ebola outbreak: $100 mn response plan in West Africa
Geneva, Aug 1 (IANS) The director-general of the World Health Organisation (WHO) and presidents of West African countries hit by the Ebola virus outbreak will Friday meet in Guinea to launch a new $100 million response plan.
 
 
 

Latest from the Network

Sindhu joins Thulasi, Kashyap, Srikanth in quarters (Roundup)
Glasgow, Aug 1 (IANS) Indian badminton players had a great day at the Commonwealth Games when Pusarla Venkata Sindhu joined Parupalli Kashyap, Kidambi Srikanth, Rajah Menuri Venkata Gurusaidatt and Puthenpurayil...
Read more on Sport Balla
 
CWG badminton: Sindhu makes it a good day for India
Glasgow, Aug 1 (IANS) India's Pusarla Venkata Sindhu Thursday night joined Parupalli Kashyap, Rajah Menuri Venkata Gurusaidutt and Puthenpurayil Chandrika Thulasi in the quarterfinals of badminton competition at the...
Read more on Sport Balla
 
Why Apple Is Winning The Samsung War
In the past couple of weeks, a lot of new has come out related to Apple and their business success. Especially in relation to Samsung, they have a lot to be happy about.Many people were expecting Apple to take a large...
Read more on Apple Balla
 
Russia Pushing Apple To Release Source Code
Security concerns were recently raised by the Chinese government concerning Apple’s iPhones. They say that Apple’s devices are being used to spy on the State and reveal secrets to the United States government. Days...
Read more on Apple Balla
 
Kelly Rowland's pregnancy was 'a surprise'
Kelly Rowland admits her pregnancy wasn't planned. The 'Motivation' hitmaker, who is expecting a baby boy with husband Tim Witherspoon, was initially shocked to discover the news, but has already chosen a name for their...
Read more on Celebrity Balla
 
Jada Pinkett Smith is still besotted with Will Smith
Jada Pinkett Smith says Will Smith is much more than just her husband. The 42-year-old actress, who has daughter Willow, 13, and son Jaden, 16, with the actor, admits she is ''ecstatic'' about the way their 17-year...
Read more on Celebrity Balla
 
Apple TV Meets Another Delay
Apple TV has been a successful product, although it hasn’t found its place in the market the way that devices like the Roku have. Apple has been working hard to remedy that, including planning a big upgrade that would...
Read more on Apple Balla
 
14 Palestinians killed in Gaza
Gaza, Aug 1 (IANS) At least 14 Palestinians were killed and 29 injured Friday in Israeli airstrikes, hours before the start of a 72-hour ceasefire in the Gaza Strip. According to medical sources, eight Palestinians...
Read more on Politics Balla
 
Continue peace talks: Myanmar president
Yangon, Aug 1 (IANS) Myanmar President U Thein Sein Friday called for efforts to continue peace talks amidst the country's political reform. "Despite different opinions, political groups entertain a shared attitude...
Read more on Politics Balla
 
James Franco: Child of God is 'very dark'
James Franco says 'Child of God' is ''ten times darker'' than 'No Country for Old Men'. The '127 Hours' actor stars in and directs the upcoming film adaptation of Cormac McCarthy's novel of the same name and he's...
Read more on Movie Balla