The 80/20 rule in business what about the 20/80 rule and how you fix it

The 80/20 rule says that 20% of your customers generate 80% of your revenue. That is awesome and we pay very close attention to those customers, as they are extremely valuable.

What are you doing about the 80%? That is a lot of customers, that only generate 20% of your revenue. Understandably some them them just are buying one or two things from you as they cannot get them from anywhere else. There is not much you can do about those folks. We understand that.

So how do we get the HUGE mass of your customers who could spend more money with you to do so?

INCENTIVES!

How does that work you might ask

There are a few ways to introduce incentives into your sales mix

Here is one example:

All customers have a baseline of revenue that they generated last year with your company. Company A spent 50,000 for example.  So we want them to increase it by 10%. So we offer an incentive, NOT CASH, but travel, consumer electronics, or prizes, and NOT MERCHANDISE to them when they increase their sales above 50K. Since 50K is the baseline they get nothing for that but only above and beyond is where the reward comes in.

So if you NEVER had this incremental revenue from them and you could provide some prizes for increasing, the small investment on the incentives pay for themselves.

Lets say you budget 2% of sales so on 10K of incremental revenue which for you is 10K in the previous example that is a $200 prize.

Who would not give $200 for 10K of new revenue?

See how this works, they have to meet the previous requirement and then they start earning.

This is just one idea and can be spun in so many different ways to create the desired affect.


Let's talk about how this can be played into your company's business model for growth.


Derek Miller
ProPrinters