The 80/20 Rule


Most people have heard of the 80/20 rule, but it’s often much easier to understand it than to put it into practice.

The key principle of the rule is:

  • 80% of your profits come from 20% of your clients
  • Or, alternatively: 20% of your products or services generate 80% of orders
  • And 80% of costs come from 20% of activities

Of course, the % is not exact: the principle is the leverage of a small number of clients, products, people and activities.

But, very often, we’re so busy just getting stuff done each day, that we sometimes forget this principle and just plough on with whatever’s next on the list.

Instead, we suggest you plan in a weekly review to slow down and assess one aspect of this rule in your business.

  • What can you learn or do from your key 20% of clients to make them more loyal, want to buy more from you or refer others like them to you?
  • How can you develop your key 20% of products or services to add extra value to them or get customers wanting to cross purchase from them?
  • What costs are genuinely valuable, and what might you want to find ways to minimise?

So there you have it: the 80/20 rule in a nutshell: how to be more efficient and profitable at the same time. 

And step 1 is to slow down and put aside one hour each week to assess one impact of this rule: and, by the way, this one hour is of course within the 20% of activities that produce 80% of results (as are all the key activities in ‘Slow Selling’)

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