The 80/20 Principle was first discovered approximately 100 years ago by an Italian economist named Vilfredo Pareto while he was studying income and wealth patterns.
He discovered that there was a pattern of “predictable imbalance,” and that by identifying and focusing on the top 20% of our efforts, we can leverage our results in virtually any area of our lives, and vastly improve our effectiveness.
Not long ago, a major insurance company did a study on its sales force to see where the majority of its sales and profits were coming from. Low and behold… 20% Of The Sales Force Produced 80% Of the Profits!
They went one step further, and analyzed the top 20% of the sales force to identify if there was a “predictable imbalance” amongst this highly productive group of people.
Guess what they found? That’s right…
The Top 20% Of The Top 20% Of The Sales Force Produced 80% Of The Profits!
I have personally used the “Pareto Principle” in many areas of my business and personal life, and found it to be an extremely effective tool for determining where and how I should be spending my time and efforts.
I’ve boiled it down to the top 7 ways to use the 80/20 Principle in your business and personal life.
CRM Reviews
Technorati Tags: increasing productivity
It always surprises me how few marketers actually “test.” For example, have you ever tested one price against another to see which price pulls the most sales leads? I’ll bet most of you haven’t
Well starting today, here’s a brief list of the most important things to test:
1. Headlines (in ads and sales letters)
2. Price, payment plans and combination offers
3. Guarantees
4. Offers and Bonuses
5. Mailing Lists
6. Media
7. Sales Copy
And the list goes on. There are an endless number of variables you can test in your business. Here’s the exciting part: One “minor” change can have a major impact on your business.
For example, let’s say you test charging a 3% fee instead of a 2% fee for your services and your sales remain exactly the same. Let’s further assume you’re selling approximately 200 new clients a year. That increases the dollars per client by 50% multiplied by 200 clients or …
Well, you do the math
That’s a lot of Extra Dollars Per Year With No Extra Work On Your Part!
Or say you offer some extra bonuses to the customer for doing business with you and find that it increases your sales ratio by just 10%. That’s 20 new customers and 20 extra paychecks.
That’s the power of testing. Put it to use in your business today.
For managing and tracking your tests you can save a lot of time and effort using a CRM Program. Learn how at CRM Reviews
Technorati Tags: market testing
The first rule in marketing probably should be: “Remember, You Are Not Your Customer!”
It is both easy and expensive to get in the way of what works based on your own biases and assumptions about your customers and what you think they want. Often when faced with different advertising options or marketing approaches a business owner will say “I would never call on an advertisement like that” or “I wouldn’t read something that long” or “That doesn’t fit our image”.
This can be a big mistake. A research study of advertising executives “guessing” what people thought vs. what the people really thought showed that the advertising executives were wrong by as much as 72% on various questions.
Making assumptions about your customer can be very costly. If you don’t know how your customer will react then you need to quit guessing and find out more about your customer through actual surveys and testing.
The more you know about your customer, the more customers you will have.
Conducting surveys to assess customer satisfaction and understand your customers needs can be an effective way to learn the truth about your customers.
Using a fully integrated CRM program will enable you to design a survey, send it automatically by email, measure the responses and take actions based on the analysis.
You can also assess customer satisfaction with every support ticket. Send an email when a ticket is closed to solicit feedback on the customer experience with the ticket.
In addition, you can use surveys to determine and optimize your marketing strategy by sending a survey to a select panel of customers/advisers, to determine their views on product direction or product positioning.
You can also conduct surveys to understand email and media preferences and run campaigns targeted at those who are most likely to respond.
Technorati Tags: customer research, customer survey