The "80/20 Principle" in Marketing
July 23rd 2007 08:47
You have probably read Richard Koch's book, "The 80/20 Principle : the Secret of Achieving More with Less." The book emphasizes the effectiveness of doing business by the principle of simplicity. The 80/20 rule applies not only to business and marketing but also to your everyday life :
* 80 percent of what you accomplished at work comes from 20 percent of the time you spent working.
* 20 percent of a business company's product usually account for 80 percent of it's sales.
* 20 percent of criminals account for 80 percent of crimes.
* 20 percent of motorists cause 80 percent of accidents.
* 20 percent of your clothes will be worn 80 percent of the time.
Marketers direct their energies finding out which 20 percent of their marketing is motivating the most sales, which 20 percent of their customers are producing 80 percent of their profits, learning which 20 percent of their customer prospects are most likely to become buyers.
Expert marketers advice : When you discover which 20 percent of your customers are responsible for 80 percent of your sales, focus your time and energies keeping these customers happy and increase business transactions with them. Tap them for their referral power because those are contented and satisfied customers. Paying more time and attention to them, reduces your marketing budget because you can pay less attention to the 80 percent who motivate 20 percent of your profits.
* 80 percent of what you accomplished at work comes from 20 percent of the time you spent working.
* 20 percent of a business company's product usually account for 80 percent of it's sales.
* 20 percent of criminals account for 80 percent of crimes.
* 20 percent of motorists cause 80 percent of accidents.
* 20 percent of your clothes will be worn 80 percent of the time.
Marketers direct their energies finding out which 20 percent of their marketing is motivating the most sales, which 20 percent of their customers are producing 80 percent of their profits, learning which 20 percent of their customer prospects are most likely to become buyers.
Expert marketers advice : When you discover which 20 percent of your customers are responsible for 80 percent of your sales, focus your time and energies keeping these customers happy and increase business transactions with them. Tap them for their referral power because those are contented and satisfied customers. Paying more time and attention to them, reduces your marketing budget because you can pay less attention to the 80 percent who motivate 20 percent of your profits.
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