The 80-20 rule still applies

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Thursday, September 11, 2014

Many salespeople are familiar with the old adage known as the 80/20 rule that states that 80 per cent of their sales will come from 20 per cent of their customers. The advice to be derived from this time-tested maxim is that they should spend 80 per cent of their selling time with the 20 per cent that account for the majority of their productivity.

If you are a small business owner marketing a product or service to a clientele, the 80/20 rule will still be an effective guideline for determining how your finite amount of time is allocated.

One issue that often arises for those in the initial phases of getting a business up and running is the desire to accept any client that comes along, only to discover that this one client is monopolizing close to 80 per cent of your time for very little in the way of revenue.

Frustrating as this reality may be, it can actually provide a valuable lesson in identifying potential clients that can generate greater revenue with far less of a time commitment.

Having a difficult-to-please or needy client at the very outset might make you question why you decided to go out on your own in the first place, but an attitude of gratefulness in the face of this challenge will prove very clarifying in how to improve future client relationships.

You will learn to recognise the warning signals early in the relationship, when it is much easier to tell potential clients that it would not be in their best interests to utilise your product or services.

Eventually, when you have accumulated a large enough clientele, you will have the distinct and well-earned pleasure of telling that difficult client or clients, very diplomatically of course, that you can no longer operate under the original conditions in place at the beginning of the relationship.

You might very likely find that you have proven a valuable resource to these clients and that they might be willing to modify the arrangement to something much more palatable in terms of time and revenue.

It is possible that the client or clients will resist any sort of change, in which case you might lose them, but that will free valuable time to pursue clients that can be on more agreeable terms and generate more revenue, which when you thing about it, is one of the main reasons for making the decision to become the boss in the first place.

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