Guys, I've got an interview today that ROCKED the way that I see the world. It's a little something that is so prevalent and widespread that it's almost like a law of nature.
You may have already heard of this "law" before. Our guest today Perry Marshall brings to us today the 80/20 principle and how it can help your marketing and sales.
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The 80/20 Rule
80% of your customers will produce 20% of your revenue, and 20% of your customers will produce 80% of your revenue.
80% of your skills will produce 20% of what you achieve, and 20% of your skills will produce 80% of what you achieve.
80% of a tree's branches produce 20% of the leaves, and 20% of the branches produces 80% of the leaves.
A Law of Nature?!
The crazy thing about learning and applying the 80/20 principle is to realize that within each percentage, there lies another percentage, and another percentage.
Remember the tree we were talking about earlier with the 80/20 Rule? Yes, 80% of a tree's branches produce 20% of the leaves, and 20% of the branches produces 80% of the leaves. Take that one step further.
Out of the highly productive 20% of branches and their 80% of leaves, 20% of those branches produce 80% of the previous 80%.
And so on and so on, with the 80/20 rule nestled in itself. It's like one huge fractal, where the closer you look and the deeper you zoom in, the more you see the same pattern again and again:
What this means that there's always a 1% that leverages for a sizable portion of your income. The trick is to find these 1% levers. Who are the 1% of customers who can
Stainless Steel Espresso Machines and Uber Choppers
Perhaps you've taken an Uber before. Have you taken an Uber chopper ride before?
When most of us think about Uber, we're not looking to be flown in a helicopter escort to our destination. Even though the vast majority of customers seek road transportation, a small minority may want to arrive in style from a chopper, and are willing to shell out a little more to do so. Remind you of the 80/20 principle?
What about coffee?. Your average customer (and the vast majority) of them may get a latte and a snack. But when you consider the 80/20 principle, perhaps a few customers want a stainless steel multi-functional coffee machine for 2000$. There are people who pay even more for their Starbucks--if they're
These are the people willing to pay more. These are the 1% who leverage a significant portion of the final payout.
Look for the exception; averages are deceptive.
Averages are a funny thing. They're easy to understand, but they're also deceptive. Averages don't tell the whole story.
Your average Uber customer just wants a car ride. Your average Starbucks customer is looking for his 6$ latte. You don't hear as much about the guy who just shelled out for Uber Chopper or for someone looking to Starbucks for regular catering.
Back in school, the students may take a class that the teacher grades on a B- average. Knowing that the average is a B- doesn't really tell you everything about the students.
If you're an employer, you're not looking to hire the average student. You're looking for the one that got the A+ in the class!
Just like with the Uber helicopter and the coffee examples, it's the 20% of the 20% of the 20% that will bring you sizable results and income. So how do you identify which one of the 1% will be the lever that produces windfall?
Remember: I promise you this episode will be entirely useless to you-IF you don't apply what we've discussed.
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