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Insights From 80/20 Sales Marketing Pt.1 - Sales (#38)

Reading Time (6 minutes)

Understanding 80/20 or Pareto’s Principle in a Business Context

  • “Pareto Principle” - Italian economist Vilfredo Paredo noticed that 20% of the people owned 80% of the wealth.
  • 80/20 says 80% of your results come from 20% of your efforts, and 20% of your results come from the other 80%.
  • 80% of your sales come from 20% of your customers.
    • Sometimes 20% of core customers actually account for 100% of profits, and the rest on average are loss makers you would be better without.
  • “Your best new customers are your existing customers”.
    • Sales and marketing begins with product development for your best and enthusiastic customers.
    • 80% of the sales are made by 20% of the salespeople. 
    • 80% of the customer service headaches come from 20% of the “problem children”. 
    • 80% of your productivity comes from 20% of the tasks on your to-do list/calendar
  • The winner-take-all phenomenon is the disproportionate advantage that any top dog has over all the others - that the top 3 players have over all the rest combined..
  • Average equals mediocrity.

Rack The Shotgun

  • This means sending one calculated signal that most ignore, but a few respond to
    • Triggering your audience and seeing who responds. 
  • Before you bet your time or money on any sales or business project, you need to rack the shotgun.
  • Selling to the right person is more important than all the sales methods, copywriting techniques, and negotiation tactics in the world.
    • The wrong person doesn’t have the money, doesn’t care, or won’t be persuaded by anything.
    • People are self-identifying as being the right targets or the wrong targets for you all the time.
  • The vast majority of businesses waste huge sums on ineffective advertising.

80/20 Traffic

  • When you do publicity like writing books or magazine articles or blogging, the publicity itself will almost never close the deal for you. 
    • You still need a mechanism for turning the publicity into a sales funnel, like an offer or white paper or diagnostic tool or problem-solving cheat sheet. 

7 Cardinal Rules of the 80/20 Sales Pro

  1. Don’t cold call. Only sell to warm leads.
  2. Before you start selling, know how much you’re willing to pay to get a new customer.
  3. A prospect who “finds” you first is more likely to buy from you than if you find him. 
  4. Building relationships with the press is not how most salespeople should prioritize their time. 
    1. Instead offer to write them magazine articles.
    2. Enhance your credibility as a salesperson, by authoring, speaking, and publishing quality information
      1. Good publicity strategy for any salesperson who doesn’t mind sitting down and writing. 
  5. Generate leads with information about solving problems, not information about the product itself. 
  6. You can attain the best negotiating position with customers only when your marketing generates “deal flow” that exceeds your capacity.
  7. The most valuable asset you can own is a well-maintained customer database, because existing customers are easier to sell to than strangers. 

  • The 1st step to getting anyone to listen to you is getting ears and eyeballs.

The Yin and Yang of Media and Traffic Expertise

  • Yin: Impossible to become proficient in every form of advertising. 
    • Focus on 1-3 forms of marketing and advertising, so that you are much more skilled in those media than most people.
  • Yang: if your entire business is dependent upon one source of traffic, one advertising medium, your business is a train wreck waiting to happen.

Business Tips

  • Many successful entrepreneurs become extremely proficient at the use of ONE sales channel and use it to develop a firm foothold in a desperately competitive marketplace.
  • As a salesperson, if your company won’t generate sales leads for you, generate them yourself. 
  • As a marketer aspire to create endlessly irresistible offers so people spend a lot of money with you
  • To build a sales funnel you begin with the end in mind.

3 Steps To Selling Anything (Power Triangle)

  • Traffic ⇒ Getting traffic
  • Conversion ⇒  Convince the person that what you have is going to solve their problem
  • Economics ⇒ You have to give customers something that’s valuable and get their money

This was a whole section in the book (Power Triangle) so here’s an example of how Traffic, Conversion, and Economics would apply to an ad campaign

  • Traffic   people who see the ad
  • Conversion   ad copy
  • Economics ⇒   click and cost per click

4 Questions You Need To Ask Yourself Before Selling

  1. Who would buy this?
  2. What can we say to persuade them to buy?
  3. Can you reach them affordably?
  4. Can they give you money?

  • Before you try to convince anybody of anything.
    • You must DISQUALIFY people who don’t fit. 
  • Sales, is first a disqualification process, not a “convincing people” process

  • 5 Power Disqualifiers That Are Always Present When A Sale Is Made 

  1. Do they have the money? - Some markets consist of people who have no money.
  2. Do they have a bleeding neck? A bleeding neck is a dire sense of urgency, an immediate problem that demands to be solved.
  3. If you want to make good money your product has to deal with something that involves either big pain or big pleasure
  4. Pain and great inconvenience, loss of money, threat of loss
  5. Craving for pleasure that borders on the irrational. 
  1. Do they buy into your unique selling proposition?
  • USP 
    • What does your product do that nobody else’s product does?
    • Why should I buy from you instead of anybody else?
    • What guarantee can you make that nobody else can make?
  1. Do they have the ability to say YES?
  2. Does what you sell fit in with their overall plans?
  • Test Fast, Fail Fast, Move On, Next, Next, Next

  • If you’re talking to your prospect on the phone, you need to start with a unique selling proposition that really gets his attention. 
  • Remember that all good sales copy is about your customer, not you. Good copy speaks to the bleeding neck first. 
  • The surest way to emotionally connect with a customer is to empathize with them, show them that a page of your diary looks an awful lot like their diary. 
  • Headlines, italics, highlights, and bolds emphasize the most important 20% for people who are skimming. 
  • Headline Test: If your headline were a classified ad, would it make the phone ring? Don’t focus on your product. Focus on the urgent problem, the bleeding neck. 

Your USP (Unique Selling Point)

  • Why should I buy from you right now, instead of buying anything else from anybody else next week? What can you uniquely guarantee?
  • Symptoms of a bad USP:
    • You’re constantly fighting downward price pressure
  • 4 Questions Your USP Can And Should Answer?
    • Why Should I Listen to you?
    • Why Should I do business with you instead of anybody and everybody else?
    • What can your product do for me that no other product can do?
    • What can you guarantee me that nobody else can guarantee?
  • How do you make yourself unique?
    • Quality of Service
    • The market you serve is unique
    • Your product is unique
    • Your whole “experience” is unique
    • Your price is unique.

Random Sales Advice

  • Master the area or aspect of marketing or sales that you naturally love and excel at - harnessing the natural forces of who you are
  • Whenever you have something in your sales funnel that’s not working, you just need to break it into pieces and make the 1st piece work. 
  • If you can’t sell a product, see if you can give it away. Or give part of it away. If they won’t take the free item, find out why.

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