Sales Strategy
The 80/20 Rule And Your Store’s Sales | August 03, 2016 (1 comment)
Merrick, NY—We all know the 80/20 rule, but it’s easy to stop paying attention to it as you are concentrating on sales. The 80/20 rule is also known as the Pareto Principal.
If you Google it, you get this from WhatIS.com: “The Pareto principle, also known as the 80/20 rule, is a theory maintaining that 80 percent of the output from a given situation or system is determined by 20 percent of the input.”
What does that mean to you? That 80% of your business comes from 20% of your customers. It also means:
- 20% of employees produce 80% of a company’s results.
- 20% of a given employee’s time yields 80% of their output.
- Among other things, less sales related. Read about them here.
- Essentially, from this article, remember that the 80/20 rule is a rough guide.
Why does it matter? Most things are not distributed equally – some contribute more than others. That is likely the case with your number of customers who make up the bulk of your sales and even perhaps with the number of employees selling to them.
Do you know YOUR store’s numbers? Look at a chart/list of your sales to your best customers. Does it equal a large amount of your overall sales? If so, do those customers know you appreciate them? Do you and your staff follow up with them regularly?
The same applies to your salespeople. Are the same few people selling the bulk of your goods? Are the ones that are not high-volume sellers pulling their weight in other ways? Are you rewarding the right employees in the right ways? You can often focus your effort on the 20% that makes a difference, instead of the 80% that doesn’t add much, says the article. So make sure that you know where your best resources (customers and salespeople) are in the scheme of your store’s sales.
Now THAT’S an application worth knowing.
Top image: Catapult Advisory Group