You might have heard of the Pareto Principle, which is also referred to as the 80/20 Rule. Now, the Pareto Principle says that 80 percent of your results come from 20 percent of your efforts.
For business owners the question always is – Well, which 20 percent is giving me the 80 percent of my results? When you look at the 80/20 principle, you can assess that in several ways.
The first way is to recognize that about 20 percent of your marketing efforts are giving you 80 percent of your results. So, your goal than is to track all the effects or the results of your marketing to understand what 20 percent is giving you 80 percent of your results.
So, the goal than is not to keep increasing the ways that you market, especially if you find that difficult to do. The goal is to try and understand which of your marketing avenues are returning the best and then to do more of those.
So, a way that you might track your marketing efforts would be to take an Excel sheet or any kind of spreadsheet and to set up on Column A all of the ways that you are marketing. Than in Column B, you want to set up all of the ways that you can track the success of your marketing.
So, let’s say in Column A you have a newsletter, and that’s your one way that your market. Column B might be what you could measure. That might be clicks; how many people open the newsletter or read the newsletter or take an action from the newsletter. You could also measure how many people are on the list and whether that’s growing or getting smaller. You also could measure how many people take the action you want them to take. So, if you wanted them to click on something and get more information or click on something and download it; you can measure all of those things.
Then, in the 3rd column, you’d want to track where you are now, and at periodic intervals; whether that be once a week or once a month. I typically like to use once a month because that tends to give you a larger view; however, if your business is changing more rapidly than that or for some reason you need to track it more often, you certainly can do that on a weekly basis. So, that would be an example on one marketing avenue that you could track.
The second marketing avenue that you could track would be something such as RSS Feed subscriptions. If you run a blog or you offer a podcast or anything like that, you should be able to track the number of subscribers, how many people click back to your website, things like that. You go there and go forward on that.
Then, the other thing you need to do is you need to put into your closing (closing means how you bring somebody into your business, so your sales process ends with you asking for the business). So, when somebody calls you and they say they’d like to hire you to do this service for me; you need to get in the habit of asking them – How did you hear about us? Start to track that against your marketing avenues. So, if you are getting a lot of clients calling you or even just a few; even 3 or 4 a week, especially if you are professional services provider, just get in the habit of asking them how they heard about you.
When you have people buying things from your website, be sure to ask them – How did you hear about us? That will start to give you a sense of where the traffic is coming from or where people are taking action from.
The results may surprise you. You may find that your newsletter really isn’t bringing you a lot of business, but your RSS Feed is (for example). So, in that case, what you’d want to do is find ways to market your RSS Feed more significantly, and you’d also want to find ways to pull back or limit on your email newsletter. This becomes especially important when you are spending money to get your newsletter produced. That means that either you are taking your own time to do it, or you are using your assistant or your Virtual Assistant to do the newsletter for you.
So, by keeping track of these metrics, if will help you understand where the 20 percent of your efforts is giving you the 80 percent of your results.
The other area to look at this in is with your clients. In any business, you are going to have about 20 percent of your clients that are providing 80 percent of your satisfaction, or 80 percent of your income, or 80 percent of your value. Those are the kinds of clients that you want to cultivate. You don’t want to try to market to everyone. You just want to market to people who are more like that 20 percent that’s having the most significant impact on your business.
So, when you look at applying the 80/20 Rule to your business, be sure to measure which 20 percent of your efforts in all your areas are giving you the maximum results. Than, the goal is to do more and more of what’s already working.