The Secret Of The 80/20 Rule
The Pareto principle is a principle that states that for most things, 80% of consequences come from 20% of causes. This is also known as the “80-20″ rule. For example, it’s likely that you wear 20% of your wardrobe 80% of the time. The same is true for your business, in that 80% of your business will likely come from 20% of the clients you have.
Although it seems to be good business practice to many, it’s actually unfortunate that most people will spend 80% of their time courting the 80% of their clients who don’t bring in business.
The flipside of this is that 20% bring in most of your business. Therefore, 20% of the tasks you do each day will bring the majority of your business. If you want to streamline your business and spend your time where it really counts most, consider the following:
Spend the bulk of your time dealing with your best customers.
It’s likely that your most difficult customers will often be the ones who place the smallest orders; by contrast, your easy-going clients will have placed a larger percentage of your orders.
Now, of course, you must provide good customer service. It is also important to follow through with potential customers who are truly interested in your products and make sure that they get all of the questions answered so that they will likely become clients.
However, you can likely tell after a time or two which prospects are serious about gaining your business and those that simply want to provide more work for you but are not likely to become your customers in the end. For these latter prospects, spend as little time as you can; answer their questions, but be brief.
Spend 80% of your time on those clients who seem truly interested in your business and are likely to become clients. You should also try to focus on clients who are likely to place large orders.
It’s very smart of you if you create a detailed FAQ that has standard answers to most prospective customers’ questions. In this way, you can simply provide a link to the FAQ on your web site that’s prominent and that people can see easily.
If someone still queries you about something that’s already in the FAQ, you can simply direct that person to the FAQ first, and then ask them to come back to support for anything the FAQ does not answer.
It’s also smart to set aside half an hour in the morning and half an hour in the evening to respond to e-mail specifically; the rest of the day, concentrate on other tasks. By putting limits on your e-mail this way, you can save yourself a lot of time and concentrate on other necessary tasks.
If e-mail is very important to business and you think a large volume of it will need to be answered during the day, you can hire a virtual assistant to answer general business e-mail, with only specific ones that can’t be answered in a general sense routed to you for personal handling.
If you want to experiment with this, keep track of the time spent for several days on specific tasks. Determine which ones are making you money and which ones are simply eating up time, like answering a lot of general e-mail that could be handled by a virtual assistant. If you use these tips, devoting more time to your profitable activities should in turn greatly increase your profits.
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