Monday, 12 November 2012 16:52

80/20 Rule

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The 80/ 20 Rule

“ Many Might Go to Heaven With Half the Larbo They Go to Hell”  - Ben Johnson

One of the most important rules of sales is the 80/20 rule. For sales it basically states that 80% of your sales will come from 20% of you friends.  ( Here at Luv Catz we call our customers friends because that is what they are.)


Here is the definition from Wiki Pedia

The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.[1][2]

Business-management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed in 1906 that 80% of the land in Italy was owned by 20% of the population; he developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas.

What does it mean to you as a Luv Catz Sales Rep. Time spent identifying these 20% and working on helping them with their needs will be time very well spent as these are the friends that are going to build your success.

You can create more sales with less effort. This may seen counter intuitive as we are taught a linear relationship between effort and success but this is not the case as the study of systems suggests. Remember that business and sales is a cash flow system. We will talk about Systems in a future sales blog.

One question to keep asking your self is “What will give me the best result with much less energy?” We want high reward with the least effort and our job is to identify this system and path. We are not working for work sake we are working for results. Work efficiently and you can get huge results.

Look at your list of potential friends try to identify the traits as you start to sell that the repeat buyers have in common. Are they members of clubs? Do they go out a lot on the weekends? Do they travel? What majors tend to spend more money on clothes?  All of these questions can help you build your 20% profile.

Once you have this profile completed (It is a good idea to keep in writing what this profile entails) you then can spend 80% of your time with these friends and recruiting friends with similar profiles. This will be your core friends group. They will give you repeat business and you can tailor your marketing and presentation to this group. Some of this may look hard but like exercise it becomes easier as it becomes routine.


We will be talking more about this in future blogs. Look for the 80/20 principle in other parts of your life as well.



Let’s get Nerdy Here

( more Wikipedia)

It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients". Mathematically, where something is shared among a sufficiently large set of participants, there must be a number k between 50 and 100 such that "k% is taken by (100 − k)% of the participants". The number k may vary from 50 (in the case of equal distribution, i.e. 100% of the population have equal shares) to nearly 100 (when a tiny number of participants account for almost all of the resource). There is nothing special about the number 80% mathematically, but many real systems have k somewhere around this region of intermediate imbalance in distribution.[3]


The distribution is claimed to appear in several different aspects relevant to entrepreneurs and business managers. For example:

  • §80% of your profits come from 20% of your customers
  • §80% of your complaints come from 20% of your customers
  • §80% of your profits come from 20% of the time you spend
  • §80% of your sales come from 20% of your products
  • §80% of your sales are made by 20% of your sales staff[9]

Therefore, many businesses have an easy access to dramatic improvements in profitability by focusing on the most effective areas and eliminating, ignoring, automating, delegating or retraining the rest, as appropriate.


Read 1173 times Last modified on Monday, 12 November 2012 17:00