I have a theory that we all can be a bit smarter about working our Pareto Principle. Remember that one? Vilfredo Pareto observed that 20% of the people in Italy in the 1904 had 80% of the wealth. Then, famed Total Quality Management Guru Joseph Juran took it one step further in the 1930’s began to observe the dynamic of the ‘vital few’ and the ‘trivial many’ and started making lots of generalized applications that basically mean that 20% of something is responsible for 80% of results. This became known as the 80/20 rule or the Pareto Principle. In other words, 20% of your customers give you 80% of your income.
Let’s apply this concept to your mailing list for a moment. I bet if you really looked at your list, you would agree that 80% of your list are people representing the trivial many; that is they are the tire kickers. They stay on your list, but don’t really buy much or anything at all. Then, 20% are your ‘vital few’ that we will call your paying customers. Mike Litman calls these two camps the ‘tolerators’ and the ‘celebrators’.
Let’s see if we can somehow better work the Pareto Principle? Do you always have to assume that no matter what you do; only 20% will buy? I think if we ask enough questions and begin to learn enough about our 20% celebrators, and then change our marketing strategies to reflect what we have learned about them, we can get more of them.
What do your celebrators have in common? What is their motivation? Why did they buy from you and not someone else? Ask your customers these questions often and begin to get a sense of the patterns that connect them to each other and to you. If you happen to notice that all of your paying customers are wealthy middle aged business owners, then begin to ask questions like; where are wealthy middle aged business owners right now? Are they at the country club? Do they go to an upscale salon? Do they value something in common? Where do people who value that hang out? Are they in the same online community? Are they at University Campus? Are they on a Facebook Group? Wherever you find them, meet them there. Join, participate and help them to get to know you too.
If you were really clear about your celebrators, could you change your marketing strategy to meet more and more of them, introduce them to your products and services and get more paying customers? Could 20% of your marketing effort create 80% paying customers, and not the other way around? I think so. It’s not just about working smarter; it’s about focusing smarter to get to the desired result.
What can you do to find more celebrators?