Cracking the Pareto Code

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Cracking the Pareto Code

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Want to join the Top 20% of all Salespeople in the world? Learn how to
apply Pareto's Law (80/20 Rule) and build your own 90 day action plan for


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Ever heard of the ―80/20 Rule‖? That’s the well-known principle that says
that in every sales organization 20% of the salespeople win 80% of the
sales (and money!) while the remaining 80% are all splitting up 20% of
the revenue. So, which category do you want to be a part of - the Top
20%, or what I refer to as the Sales HEROES, right?

Where did this rule come from? In fact, the 80/20 rule is not a rule,
it’s a ―law.‖ It comes from the work of Vilfredo Pareto, an eighteenth-
century Italian economist. His studies on economics and productivity led
to the conclusion that in just about any endeavor, 80 percent of the
productivity will come from only 20 percent of the efforts. Eighty
percent of the profits are produced by 20 percent of the employees. In a
police force, 80 percent of the arrests are made by 20 percent of the
officers. It can be applied another way: 20 percent of a business’s
customers create 80 percent of the problems. And so on.

Want to be a Sales HERO? You can use Pareto’s Law to your advantage!
Create an action plan that embraces the law rather than fights it.
Meetings, crisis management, phone calls, office chat, paperwork, getting
your ducks all lined up in a row are NOT part of the 20 percent of your
activity that is directly attributable to creating new business. There is
only one task proven to directly lead to achieving your sales objectives:
cold calling or prospecting. I have seen every possible attempt to find a
way around Pareto’s Law but none has succeeded. Once you accept the
reality that you cannot change the rules of the numbers game, you will be
able to make the decision simply to play by the rules or quit.

How many prospecting calls do you have to make? Let’s apply Pareto’s Law
to find out. Let’s say you decide to ―complete‖ 100 prospecting calls in
a given period of time. According to Pareto’s Law, you will have had to
walk through about five doors or made five phone attempts to actually
reach one decision maker (20 percent of the total). Therefore, you will
make 500 attempts to attain your goal of completing 100 prospecting
calls. Of the 100 decision makers you actually spoke with, 20 (20
percent) are going to have a genuine interest and will stay in the game —
your pipeline — for further follow up, while 80 (80 percent), no matter
how good at selling you are or how much you know they need what you have
to offer, are simply not going to be interested — they are out of the
game for the time being. Now, through appointments, proposals, and
follow-up calls, you will find that 80 percent (or 16) of the 20
prospects that were still IN the game are not going to buy (at least not
right now), for whatever reason. There is absolutely nothing you can do
about it. It’s not you, it’s the law. Don’t worry, they may get back in
the game later! That leaves four decision makers who buy your product
now! Congratulations, you just made your first four sales! At first this
may seem like small reward for all your efforts, but you will learn that
it is a good, solid formula that will always help you get from ZERO to
Sales HERO in 90 days!

Try this - Invest 80% of your productive time prospecting for new
business for three straight months. If you do, you’ll find that from
there forward you will never need to invest more than 20% of your time
prospecting to keep your momentum going. As you mature in your sales
career you will learn many skills, techniques and ideas that will help
you learn to work smarter rather than harder, and to leverage
relationships and referrals to build your sales empire. Just remember –
whenever you start fresh with a new opportunity, or if you find yourself
in a slump and need to get out of it fast – start a 90 day action plan
that embraces Pareto’s Law – I guarantee you will be on your way to the
Top 20% of all salespeople in the world!

Shared By:
Mike Ward Mike Ward Senior Project Manager
About Senior Project Manager working with a UK telco