Article #13
20% of Your Effort Can Deliver 80% of the Results
By Eric Gilboord
There is a rule in business based on an 80/20 split. This means 20% of your effort can return 80% of the rewards. There are many ways this rule manifests itself in business but I’ll keep this article to 2 specific sales & marketing issues. Getting the customer and getting more from the customer.
Getting The Customer It is most important to remember, when meeting a prospective customer for the first time, to listen 80% of the time and talk 20%. Your job is to listen attentively and determine exactly what your prospect requires. If someone has agreed to see you, they are making a statement of interest in the products or services you offer. However, before they are prepared to listen to your pitch and long before you know what to say, they want to tell you what they are looking for. The prospect has had more time to think about their specific needs than you have. They can guide you to a clear understanding of their exact requirements and therefore make it much easier to fulfill their needs and secure them as a customer.
If you attempt to present everything you do, hoping to have something stick, you may be risking the entire opportunity. A general presentation can do more harm than good. You might hit many hot buttons but miss the one that is most important to the prospect. Or you could turn a prospect off by talking about something that is not accurate as it pertains to their business.
Some inexperienced sales people talk too much. They have actually made the sale but don’t realize it. They then proceed to continue selling and effectively unsell the prospect. As you continue to pitch, the prospect is given more opportunity to think about your offer. They can become confused by too much information get uncomfortable with their decision and begin to rethink their position. As this process continues they start to look for reasons to say no. You may say something that causes them to stop the sales process and request some time to evaluate the information and rather than say yes to you, actually go out and look at your competitors.
You have effectively taken your meeting past the point of sale and driven the prospect to do nothing or worse go to your competitors.
Getting More From Existing Customers
If I told you I could reduce your workload next year down to 20% of this years and still deliver 80% of the sales would you be interested? The information is there for the proactive marketer to examine and act upon.
Look up last year’s sales via your accounting system and you will find some very interesting statistics to help you plan your sales & marketing efforts for next year. Where you focus your efforts and what kind of return they deliver is up to you.
1. Run a printout (past 12 months) from your accounting program listing all your customers from largest at the top to smallest. By largest I mean how much business you did in dollars and cents in the past 12 months with each customer.
2. Next draw a line above the customers on the bottom of the list whom you wrote no business with. Unless there is a solid reason for the lack of business drop them off.
3. Examine the top 20% of the remaining customers and total their combined sales (should be close to 80% of the total). If you service or sell to more than 1 person at a company count all of them as 1 customer. This list represents your historical sales for the past 1 year period but is not necessarily indicative of next year. It is a viable guideline but you could be shortchanging yourself.
4. Look at each customer individually and determine whether you think you can increase sales to him or her. Contact your customers to review past sales and ask for their assistance in determining how you could increase sales to them. Determine a new, more aggressive, but realistic sales goal by customer.
5. When you have finished with the current customer list go back to the below the line inactive customers and find out what happened. You may be able to reactivate them by asking for another chance or understanding what made them leave and correcting the situation.
6. Look for similarities in the top 20% of your customers. What is it about your relationship with them that allows you to generate more sales? Do you have a stronger personal relationship or are they a certain size or do they buy specific products and services from you. 20% of your product or service mix can account for 80% of your business. (This is the subject for another column.)
You have the power to dramatically affect the sales and profit of your business. Take some time and evaluate your sales history and selling methods. Look for both positive and negative habits. Remember the 80/20 rule and help yourself to a more productive use of your time and a more profitable business.
And that's According 2 Eric