For Business Owners: Overlook The Pareto’s Law In Marketing If You Want To Fail…

In case you are wondering what the heck is the Pareto’s Law, let me explain to you.

Simply put, it is the 80/20 rule.

How important is the Pareto’s Law to marketing and your business?

Very.

Let’s see. Applying this law to your business, you will discover that 20% of your customers will provide 80% of your revenue.

So what do you do to these group of premium customers?

Concentrate On Marketing More To Them, Silly!

I want you to think about the following questions:

• Who are your major customers?
• Do you treat them well?
• Do your understand their NEEDS? And more importantly, their WANTS?
• Are you following up with them?
• Are you providing value to them?
• Do you sell more than 1 time to them?
• If yes, how many times more?

After you have done so, do more of these:

1. Give them the best treatment you can. Nothing less than VIP!

2. Stimulate their desires

3. Keep selling to them!

4. Repeat the whole cycle…

Your year-end profit sheet will thank you for this.

From here, we can also learn one lesson.

Some people spend a lot of time to gather new customers. That is good. However DO NOT neglect your current customers. Especially those major ones!

Remember – it is easier to sell to your current customers than acquiring new ones. Your back-end sales will drive most of your revenue! Concentrate on building up your relationship with your best customers!

As usual, let me know what you think.

All Success,

[tags]E-MoneyMarketing, business, backend profits, marketing, pareto’s law, customers, business optimization[/tags]

Like my daddy always said, ‘Fish where the fish are!!’.

You are so right on to target those who already bought from you. Any smart retailer will tell you it is easier to sell to a past customer for the second time than a new customer for the first time.

Just a word of caution on the advice to sell to your past customers more than once: Don’t overdo that strategy.

In a number of times, I bought something from an online store. In the next few days and weeks, I was bombarded with too many upsells and those emails really pissed me off.

Ha.. this post is perfect. On one of my clickbank affiliate sites, I have a script that captures the email addresses on my buyers and how much money they spend. I then send a special mailing list to them with more offers…. always am successful this way. Getting users that spend a lot of money is key!

Business Management Articles:

I think they key here is ‘balance’. We want to build relationship and provide value. We sell what we feel helps them, but at the same time, we do not overdo it like you mentioned.

James:
Good to hear that. Care to tell me more about that script you are using?

Jag

Hmm… interesting. I am thinking what u just said.

Excellent post. There’s no point marketing to people that are never going to buy anything.

This makes a lot of sense. It seems that most businesses are always concentrating on making new relationships and new sales, but at the same time take for granted the fact that old customers will remain repeat customers. There’s nothing wrong with bringing in new customers, but it’s so much more effective to target and strengthen relationships with those who already do business with you.

I think when you have identified a premium pool of your consumers discounts should be offered, customer service should be excellent and some acknowledgments should be shared toward them. Our society has become very impersonal and it would be nice for these customers to know that they are valued.

Hi Sarah,

You are absolutely right. Let’s treat these group of customers better than the rest. They are premium after all!

Let them know they are valued! You are spot on!

Warmly,
Jag

Very good point! When I first saw the title of this post I didn’t have a clue what you were talking about. But I am very familiar with the 80/20 rule and how it applies to business.

How well does this apply to blogs? Is the 80/20 rule still in effect or do you get more monetization revenue through visitors? Of course, you should appeal to and interact with your main readers, but I’ve seldom ever clicked on an ad or done any affiliate sign-ups through the blogs I love and read daily.

YoungMoneyHabits,

I should suppose the 80/20 rule would apply to blog as well.

You are right. Appealing and interacting with the main readers is important.

That said, I would think the the 80/20 rules apply more to products rather than clicks on advertisements.

Correct me if I’m wrong.

Cheers,
Jag

all your advice very useful for my business to grow. thanks for sharing, and keep up blogging!

A common challenge in our industry is balancing the need for new leads vs working the established word-of-mouth networks. Good article!

Here’s another rule: 2% of your customers will take up 90% of your time with petty issues A.K.A ‘The Man From Porlock’ syndrome. Solution: Fire them!

Definitely you are right! Customers are the most important factor in your business. Without them your business will be nothing. So it’s important that you have to build a good relationship with them, as much as possible put them on top of your priorities.

I agree, especially with service oriented business – it’s especially important to satisfy those big spenders.

Marketing is the hardest part of business, I think. Often times it takes money to bring people to the product or service…

I think one of the comments mentioned above it extreemly important – that the 2% of your customers cause all the problems. Lots of people are out there just to get free stuff. I think every company should handle this issue firmly but in a kind manner

good points… i remember learning about bestbuy and they focus alot on that 80/20 rule. i wonder if this model applies to all business…
~Mike

yea the trick is to finding out who are those 20% customers so u can make them happy :o
~john

yea i think thats the model either bestbuy or circuit city uses, or maybe they both do.

Who are these 20%? You have to “be” that customer. Read magazines for that market, visit forums and “listen” to the comments and listen to problems. Get into that parade and walk with your customers. Don’t guess what they want – they’ll tell you, if you listen.

Hi Marni,

Right on. Think how your customers think. And fill their need and wants.

Good input there!

Jag

[...] For Business Owners: Overlook The Pareto’s Law In Marketing If You Want To Fail… [...]

All i can say is listen to your customers. Im sure you know that but it cant be stressed enough.

Very interesting advice you gave us here. If I’m going to start my own business I’ll surely know what to do.

Excellent post. There’s no point marketing to people that are never going to buy anything.

Finding that 20% is the key. The important thing is to get to know your clients. Who are they? What do they do? What do they like. Then emphasize on those strengths. Listen.

it’s important that you have to build a good relationship with them, as much as possible put them on top of your priorities.

Christani

I’m going to start my own business I’ll surely know what to do.

Relationship building is a great thing to market on the web. Creating a good list is key. I like the idea of getting customers with great spending habits.

Hi,
Excellent post. There’s no point marketing to people that are never going to buy anything.
Thanks a lot!
seo firm india´s last blog ..Internet Marketing Services Application – Can It Help Your Website to be Prosperous?