Have you ever heard of The 80/20 Rule (AKA Pareto principle)? Geez, it’s talked about almost ad nauseam in the business world! It basically states that 80% of our results come from 20% of our actions. In other words, 80% of your success may come from just 20% of your customers or 20% of your activities!
Let’s revisit Career Memory Lane so that I may illustrate how this rule served Bret and I well…
When we were operating Powder Blue Productions (where we created exercise programs), there was a system in place where I:
- Taught a customized choreographed routine
- Put it to music
- Sold it to customers
And that was a pre-choreographed routine allowing fitness instructors to really let their personality shine as they wouldn’t have to spend as much time creating the choreography themselves.
Now, because I couldn’t personally (or simply didn’t want to!) tour the country and train all these people in these formats due to my key priorities, … I had to find people. These amazing people are known as our area promotion directors (APDs). They would do all the trainings and such for me in their state.
CUT TO: We have about 50 or 60 of these (personally hand selected) APDs who held trainings around the country. Now, as mentioned, my job is mostly to create the choreography and the music, BUT – as the business begins to develop, I get all caught up with things, like:
- Creating clothing
- Responding to customers
- Figuring out how things are being packaged and sold
- And this list could go on FOREVER!
There’s just so many moving parts in a business that it’s very easy to get caught up in every area, you know? Instead of just overseeing things, really, I was wheel-spinning on just about all aspects of our business. OUCH.
When Bret and I wanted to take our business to the next level, we had to ask ourselves that important question: What area of our company is creating 80% of our success?
It was glaringly obvious to us that at least 80% of our success – from every customer we had to every person who visited our website – came from 20% of our business! And that 20% of our business was our APDs, our area promotion directors.
This 80/20 rule, which goes back to the late 1800’s, is LEGIT.
After this major realization, Bret and I decided to find other people to focus on the shipping and design and operations. The two of us would ONLY focus on what’s most critical – our APDs. And when we did that, our business doubled the next year!
Does my story resonate?
Think about it right now. Maybe you’re operating your business by dealing with your coaches or your distributors or your customers based on the squeaky wheel and not looking at who/what makes the biggest impact. What is creating 80% of your success right now?
STOP looking at your business from all angles all the time, consuming all of your precious energy. START focusing your energy and attention on that 20% that is creating 80% of your income.
I’d love to hear your thoughts in the comments! Have you heard of this rule before? How can you apply it to your business? I’m listening!