A few years ago when I decided to lose some weight and take part in a try-a-tri (think “triathlon for dummies”), I read everything I could get my hands on when it came to diet and exercise. It also didn’t hurt that I had spent a good deal of my career in the health and sports nutrition industry. One of the most effective and powerful concepts that came out of my study and personal experience was something called the Pareto Principle.
More commonly known as the 80-20 rule, the concept of how we can best concentrate our efforts while maximizing results was developed by an Italian economist named Vilfredo Pareto in the early 1900s. At its essence, the 80-20 rule says that 80 per cent of your results will come from 20 per cent of your efforts.
In my weight-loss journey, I created my own version of the 80-20 rule so that 80 per cent of my dietary intake came from healthy, low-carb, high-protein and high-fibre nutrients such as lean meat and fish, vegetables, whole grains, nuts and fruit. It turned out to be a philosophy that resulted in a 40-lb weight loss while never leaving me feeling deprived (the other 20 per cent of my diet was comprised of less healthy items such as an occasional slice of pizza, burger or other “cheat” meal).
While obviously successful in my own physiological experiment, the original Pareto Principle can have a pronounced effect on just about any business. In this sense, the 80-20 rule means that roughly 80 per cent of your company’s sales will come from just 20 per cent of your clients.
So what can this mean to an event planner constantly looking to improve the bottom line? While it will always be crucial to keep your marketing funnel full with new leads, prospects and potential clients, it says to me that by focusing your business efforts – marketing, follow up, relationship building, networking, etc. – on that magical 20 per cent of your most important clients, you are likely to get the most bang for your buck.
Of course, this does not that you can forget the acronym ABM – Always Be Marketing. Nor does it suggest that you can ignore potential new business. But it does indicate that perhaps you could be spending more time nurturing the successful business relationships you have already managed to create. This will almost always pay off handsomely in terms of referrals (i.e. more business), increased credibility, trust and loyalty. As any restaurant owner will tell you, treat your regulars like gold and the rest will take care of itself.
So while my “modified” Pareto Principle might not work for everyone thinking about losing a few pounds (however, it is an awesome philosophy for weight maintenance and is very easy to sustain over the long term), I can almost guarantee it will bring tremendous benefits to your marketing and business development programs. Give the 80-20 rule some thought and let us know in the comment section below how things turn out!
