Acquiring new leads and converting them into long-term customers is the priority of any marketing department. In today’s market, with its information overload and often undifferentiated offers, it is even more urgent to reach carefully profiled and selected prospects and convert them first into buyers and then into loyal, long-term customers.
While the internet has certainly expanded the range of tools available for promoting products and services, it has also led to the market being flooded with very similar offerings, making it increasingly difficult—yet essential—to stand out from the crowd.
Balancing the Forces at Play
To maximize opportunities for gaining visibility, strengthen your brand’s reputation both online and offline, and stand out from the competition to capture the ideal market niches for your business, it is essential to make strategic use of your resources.
It is crucial to adopt the marketing tools that best serve our professional goals, but it is equally important to target our campaigns at the most profitable segment of customers.
Perry Marshall, a marketing consultant, has developed techniques and tools that make it possible to identify the best resources and invest them in the most productive activities, with the goal of converting the most profitable customers: the 80/20 rule.
What is Law 80/20?
“80% of the results come from 20% of the factors.” In this way, the Italian mathematician Vilfredo Pareto first formulated the 80/20 rule in 1897—a concept that can completely revolutionize the way we think about a company’s growth today.
Why does Law 80/20 hold such enormous potential?
1) It’s a law of nature.
It applies to any situation in daily life and at work; you can apply it to economics, science, and technology, but above all to every single aspect that’s fundamental to a company’s growth: from lead generation to productivity, from time management to human resources.
Applied to the workplace, for example, this means that 20% of financial investment yields 80% of profit, 80% of annual revenue is generated in 20% of the time, and 20% of customers generate 80% of actual earnings.
2) It’s a fractal.
In every 80/20 ratio, there’s another 80/20 ratio, following a pattern that repeats itself infinitely.
If you’re an entrepreneur, try thinking about 100 of your employees. The top performers who account for 80% of the results make up 20%, but among them, there’s a 20% who produce more than the rest combined.
3) It has a multiplier effect.
The 80/20 rule is based on a mathematical model that utilizes power laws—that is, it multiplies by factors of 10, 100, and 1,000. That is why it does not simply double growth, but causes it to increase exponentially.
In short, when it comes to results, it’s essential to stop thinking in terms of mathematical averages and start focusing on the most productive activities, the resources with the highest returns, and the most profitable customers.
Take advantage of Law 80/20 and…
1. Find your ideal contacts.
Not all customers are the same. Your customer base is not made up of two equal halves, but rather of a large segment of people who are less inclined to make purchases and who—in all likelihood—have less spending power, and a small segment capable of spending exponentially higher amounts on much more expensive products.
2. Identify your strength.
The 80/20 mindset allows you to bring out your best 20%—your uniqueness, what makes your product or service exclusive and invaluable—and what sets you apart in the eyes of your potential customers.
3. Master a vehicle.
Whether it’s pay-per-click, Facebook, email, or cold calling, the 80/20 Rule can help you identify which tool is best suited for your marketing campaign and master its use. This way, you can attract the best leads by strategically investing your most productive resources in the activities that drive the most sales.
Developing your marketing strategy based on the 80/20 principle is the key to increasing its effectiveness, improving business performance, and boosting revenue while using fewer resources.
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