The 80/20 Rule
Turn-of-the-century Italian economist Vilfredo Pareto’s observation that the majority of wealth is distributed unequally inspired the “80/20 Rule” that is taught in many of today’s sales training programs. Exemplified by the fact that during his lifetime 20% of Italy’s population owned 80% of its land, “Pareto’s Principle” describes the concept that most of a result is attributable to just a few inputs. How does this principle translate to the sales world? Are statements such as “twenty percent of sales people make 80% of the sales,” and, “a salesperson should speak only 20% of the time so that a prospect may do 80% of the talking” related to sales success? Why is 20% a seemingly magical number?
Actually, the key to the “80/20 Rule” isn’t the number 20 or the number 80 – the key is allocation of resources, and understanding that a small amount of resources are responsible for a very large part of the solution. In this case, 80% of the sales being made by only 20% of the sales people suggests that a very small number of individuals in this role master their craft. And, they’re probably the group doing a mere 20% of the talking!
How can you do so much with so little? You can accomplish it through the very simple, but often overlooked discipline of planning ahead. Without advance preparation, it is impossible to think of the perfect questions to pose at the exact points in the conversation that will have the maximum impact on your prospect’s decision-making process. If your typical prospect presentation lasts 60 to 90 minutes, you should select those questions most pertinent to your prospect from a prepared list of 60 – 80 questions, most of them open-ended. Posing the right questions helps ensure you really will only talk 20% of the time, because you’ll be too busy listening to the answers to do much else.
During the month of April, the RD blog will delve into proper preparations for successful sales suggested by RD’s senior consultant Patti Hutton. In addition, the blog will briefly introduce best questions. Stay tuned during April to learn more.
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About the Author
Patty Scotten is a consultant with Retirement DYNAMICS® and serves as their marketing manager. Patty has over twenty five years’ experience in the senior living industry and has led several communities in preselling expansions or increasing occupancy levels. She graduated from Elon University and holds a Masters Degree from University of North Carolina at Chapel Hill. Patty is licensed as both an assisted living and nursing home administrator.