As you may know, we’ve developed a Special Sales Development Program for Hubspot Partners. They’re kind of a busy group. They’ve got their own LinkedIn group. They talk a lot. Recently, I sent an email to the group and talked about the 80/20 Rule. It started a conversation and I wanted to share some more info with them, but I was surprised that I’d only mentioned it in one post.
So, first, let’s set the stage. One of the partners just closed a $2,500/month retainer. Great. He’s using what he’s learned. He still has 14 customers that pay him $100-200/month. He could get rid of all of them and make the same money as he did before he closed his new deal and save himself a lot of time every month. Or, he could find himself another good customer. If you really want to grow your business, you always need to be replacing your worst with your best yet.
Let’s go back to the 80/20 Rule again and look at some examples of the rule in action.
I remember Bob Jiguere telling me that his employer fired the bottom 20% of division managers every year. Didn’t matter if you grew. Bottom 20%…Gone.
Have you ever noticed that most of your customers just go along. No problems. Pay their invoices. 20% of your customers will give you 80% of your problems. Have problems with your billing. Make up their own payments terms. etc.
How many customers do you have? Look at the biggest customers. Are the top 20% biggest customers responsible for 80% of your revenue? Even if you sell a set price unit, you’ll find that your most important customers give you referrals, buy again, etc and are responsible for more than their share of your business.
So, let me show you how to grow your sales by 1,600% (That’s 20 times today’s sales.) using Dave Kurlan’s 100/0 rule. First, figure out which of your customers make up the top 20% and what they look like. Then replace the bottom 80% with more customers like the top 20%. When you finish that process, your business will be 4 times the size that it was when you started.
Unfortunately, the 80/20 Rule will kick in and you’ll have a new top 20% that will represent 80% of your business. As a matter fact, your top 20% will actually be 4 times the size of your original top 20% and when you replace the bottom 80%, your business will be 16 times where you started. If you want help with the math or the doing, let me know.