20% of your actions will bring you 80% of your results. This observation and my attempt to pronounce Vilfredo Pareto in today’s video. Scroll for the text version.
- Where the 80/20 rule comes from
- How it applies to your business
- How to leverage it to get better results in less time
The 80/20 Rule
In 1909 – an Italian economist named Vilfredo Pareto noticed that approximately 80% of the land in Italy was owned by 20% of the population.
This observation soon lead to other similar observations regarding unequal distribution.
The exact percentage doesn’t have to be 80/20 – it might be 90/10 or 70/30 – but the overall concept is that things are not evenly distributed and effort and results are not proportionate.
Some of the observations are a tad depressing, like that the top 20% of the people in a given field will make 80% of the money.
Others simply provide good data that you can use to your advantage.
The 80/20 of small business
If you pay attention, over time, you will notice that these things are true:
- 20% of your actions will bring you 80% of your results
- 20% of your clients will bring you 80% of your business – in the form of repeat purchases + high quality referrals
- 20% is an fairly good “open rate” for your email list – and an astounding “participation rate” for your online group or community
- 20% of your audience will do 80% of the liking and sharing of your social media posts
- 20% of your articles, status updates or videos will get 80% of the views
How to use the 80/20 rule to get better results in less time
Here’s how you can use these observations to get better results in your business in a shorter period of time:
Track what you do and the results that you get.
While you may have a gut instinct about what’s working for you – tracking will show you the unvarnished truth about where to focus your time and energy.
(Your tracking results might surprise you.)
Do more of the 20% that pays off.
Nurture those clients that buy repeatedly and send referrals.
Do more of the marketing that leads to sales.
Do less of the 80% that doesn’t.
Drop the marketing activities that don’t get results.
Avoid perfectionism and spending your time on unimportant minutia.
Ask: will this matter in 10 minutes? 10 hours? 10 days? 10 years? And act accordingly.
20% of the advice you implement will give you 80% of the improvements you seek
Using the 80/20 rule to guide your business definitely fits into the 20%!
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