The wisdom of 80/20

The 80/20 rule is one of the most well-known theories of management and marketing.

20% of your customers, messages, employees or time give you 80% of sales, conversions and output.

It’s ironic that this is one of the rules we get wrong so often.

Why? We chase our losses.┬áIt’s a common reason for problem gambling where we fail to recognise what’s causing us so much damage.

Every time you ignore the evidence that your social media marketing is draining your time, or that your sales mainly come from a demographic you don’t particularly like, you chase your losses.

Refusing to accept where your 20% is and cutting out the ineffective 80% is a quick road to disappointment.

Let’s be more honest with ourselves and make sure our efforts are spend in the most valuable places.

Where’s the leak?

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We all spend time and money on different ways to get customers or to keep them.

But how do we know what works? Many assume that spending more money on advertising is the answer to all business problems.

But many times we fail to measure how effective each message is and, usually, we find out that we aren’t breaking even on each ad we buy.

Turning the tap on harder when the pipe is leaking is only going to make the leak worse. The truth is we might be better off handing out the money on the street.

So make sure you know, really know, where you’re leaks are and understand that more doesn’t always equal better.