Today I’m going to be a tough old bastard and dole out some punishment.
While others might be the laying some “new year, new you” bullshit on you, I’m taking the third day of the year to roundly hammer home the importance of a fundamental rule of nature, with extreme prejudice.
I’ve spoken about the 80-20 rule at length before, both in my “9 nuggets of marketing wisdom” series and elsewhere, but while some seem to get it at a surface level, most don’t seem to have internalized it yet.
So for that reason, Richard Koch’s “The 80-20 Principle” is the sixth business book I’m demanding you read, not just recommending.
I’ll spare you the whys and wherefores of the detailed history of the rule, which I’ve covered at length in my “9 nuggets of marketing wisdom” mini course.
Today is intended merely a short, sharp refresher of the rule, a kick up the arse if you will, as to why you need to be using it.
If you’re one of the uninitiated the 80-20 rule states: 20% of your effort results in 80% of your return.
We use it to identify the 20% of our effort which brings us that golden 80% in return, and do more of it.
As opposed to wasting time on the 80% which only gives us 20% of a return.
In my own business, it dictates everything I do.
The people I work with.
Whom I wish to have as clients.
How I design websites.
The marketing methods I employ.
80/20 is why I pay little heed to SEO or Social Media.
Both fall squarely into the 80% of lead generation efforts that give a paltry 20% in return.
By being acutely aware of how 75-80% of my total lead generation comes from 20-25% of my efforts, I’m able to identify what that 20-25% is, and scale it up.
Meaning SEO and Social Media never get a look in.
Sure they kinda work, but since they only give me around 20-25% of my total leads, wouldn’t it make more sense to spend my spend time and money on efforts which give me a greater return?
And the same principle must be applied to your business to ensure an enhanced level of success.
Let’s briefly apply the 80-20 rule right now to your business.
Is there a product which you continue to stock although profitable, only accounts for a meagre percentage of your profits?
Do you have a client on your books which saps all your energy and resources, but you keep him or her on because of some sorry-ass sentimental reason?
This is where the 80-20 rule comes into its own. It allows you to identify the areas of your business which on the surface work to a degree, but don’t produce enough of a return to merit the resources dedicated to them.
Resources which could utilized more profitably elsewhere.
I mentioned in an email before Christmas about how establishing solid marketing systems should be your number 1 priority for 2014.
But adopting the 80-20 principle to your business could arguably be just as important.
Stay Hungry,
Keith “80-20” Commins
P.S. It’s as a result of ruthlessly applying the 80-20 rule that I rave about the effectiveness of a particularly cool way of getting traffic to your website. Thing is though, you need to know how to use it correctly or you’ll find yourself floating down shit creek, without the proverbial paddle.
But if you want to get the low-down on this method of traffic generation, then my next book’s got your back.
As it turns out, the book’s author is stark raving bonkers fan of the 80-20 rule himself. Great minds think alike, eh?