n this article, we’ll discuss What’s the 80/20 rule in sales?
Sales is a game of numbers. You must find the right leads, convert them into sales opportunities, and close as many deals as possible. It’s not easy because every lead presents a different challenge. The 80/20 rule in sales refers to a principle that holds in most situations: 80% of your results come from 20% of your efforts. Similarly, in sales, this principle means that 20% of your sales will bring you 80% of your revenue. That might sound unfair, but it’s an opportunity to reorganize your priorities and focus on the things that matter most. The more successful salespeople determine what activities drive the most significant returns and dedicate most of their time to those tasks.
80/20 Rule: The Ultimate Guide
What is the 80/20 Rule in Sales?
The 80/20 rule in sales refers to a principle that holds in most situations: 80% of your results come from 20% of your efforts. Similarly, in sales, this principle means that 20% of your sales will bring you 80% of your revenue. That might sound unfair, but it’s an opportunity to reorganize your priorities and focus on the things that matter most. The more successful salespeople determine what activities drive the most significant returns and dedicate most of their time to those tasks.
Why is the 80/20 rule so important?
The 80/20 rule allows you to prioritize your time and effort to get the most significant results in the least amount of time. When you know where your most significant sales are coming from, you can focus your efforts and attention on those tasks. Because sales is a numbers game, it’s easy to get discouraged when you don’t see results immediately. Most people will give up after a month or two if they don’t see immediate results. But successful salespeople know that it takes time to build a pipeline of leads and convert them into sales. Consistency is vital, and you can’t expect to close deals immediately.
Which 20% of activities will bring you 80% of your results?
You could be doing many things as part of your sales process, but not all are equally important. The trick is to find the activities that drive most of your results and focus on those. For example, let’s say that you sell enterprise software. You know that your typical sales cycle is about six months long. Therefore, you know that the revenue from a single sale won’t show up in your bank account for six months. It’s easy to get impatient and want to see immediate results. But suppose you focus on activities that bring in revenue immediately. In that case, you might neglect the relationships that will drive your biggest deals six months later.
The 80/20 rule for lead generation
When you’re just starting, you need a lot of leads. More leads mean more opportunities to close sales, which means more revenue. The good news is that leads are easy to come by. You can find new leads in many places, including trade shows, online advertising, referrals, and networking events. The trick is to focus on likely leads to buy your product. In other words, you want to find people with a problem that your product solves. Otherwise, they won’t buy from you. Leads interested enough to put their email address down on a website form or sign up for your email newsletter are the best. You can also approach potential customers directly or ask your existing customers for referrals.
The 80/20 rule for sales meetings
Sales meetings are short get-togethers between you and a potential client. You’re likely to have several sales meetings with different clients, but you can use those meetings to your advantage. First, you should walk away from each meeting with a few next steps. These could include setting up a discovery call, setting a date for a discovery call, or asking for a referral to someone else in your prospect’s company. Whatever you do, you should walk away from every meeting with a concrete next step. If you do, you’ll see consistent revenue from your sales meetings because you’re actively taking steps to drive business. You’re not just showing up at the meeting hoping something happens.
The 80/20 rule for email outreach
Email outreach is a great way to reach out to potential customers. You can find them by researching your competitors or creating a list of companies you want to work with. But just sending emails to people won’t bring in sales. You want to ensure that you’re sending emails to the right people. Your outreach emails should have a clear call to action, like asking for a meeting or asking for a referral. Your emails should also be personalized, so you should use a CRM to store information about your contacts. Your emails should be short and to the point. And they should end with a call to action.
Tips to Benefit from the 80/20 Rule in Sales
1. Always keep track of your sales data and customer feedback to see if any patterns can be applied to the 80/20 rule. For example, you may notice that the majority of your sales come from a few certain products or customer segments. These can be plugged into the 80/20 rule to help you prioritize what products to focus on in the future. You may also see that most customer complaints are related to a certain issue. Once again, these can be plugged into the 80/20 rule to help you prioritize how to address this issue in the future.
2. Stay aware of your customers’ needs and be ready to meet them with the right solution when they come knocking. You don’t have to wait for a cold call to engage with customers. The best way to ensure you’re serving the majority of your customers with the right products and services is to keep an eye on what they’re buying. The products and services you buy most often are the ones your company should focus on offering.
3. Create a sales process that is heavily reliant on software. The best way to do this is by implementing a sales automation tool that includes an email marketing campaign, a lead nurturing sequence, and a landing page builder. By doing this, you will be able to focus more on high-value activities such as networking, prospecting, and closing deals with clients. In addition, you can focus on closing more deals and increasing your average deal size by automating a large portion of your sales process.
4. Make sure you focus on the most profitable clientele without wasting time on the unprofitable. To know who to focus on, you must keep track of your sales pipeline. You can do this with a piece of software or with a simple spreadsheet. The most important thing to keep track of is the value of each client. An easy way to do this is to group your clients into categories based on spend. The clients that make up the majority of your company’s revenue are your high-value clients. The clients that make up the minority of your company’s income are your low-value clients.
5. Make sure you have a process for new sales team members to hit the ground running. This is especially important if you hire outside your company’s usual hiring cycle. A strategy can help new hires feel welcome and ensure they have all the information they need to succeed. It can also help your current team if they feel overwhelmed by their current workload. A process can help you determine essential tasks and clients. It can help you create a schedule that balances everyone’s workload and ensure you’re not spending too much time on less critical clients.
6. Create a sales compensation plan that is heavily based on performance.
You want to encourage your reps to focus on activities that bring the most value to your company and customers. A sales compensation plan that heavily favors performance will do precisely that. To create a performance-based program, you must identify the activities that provide the most value to your company. Ideally, this will be face-to-face selling activities, signing up high-value customers, or bringing in new business. Then, you must create a system that rewards those activities with higher commissions, bonuses, or other incentives.
7. Make sure you follow up with your clients after each sale and ask them when they want to have their following product delivered. If you have a sales team, ensure they follow a process that allows them to track their sales.
Things you need to do if you want to apply 80 20 rule in sales
Find your most profitable sales activities.
To apply the 80/20 rule in sales, you need to know which activities will most likely bring you revenue. That means tracking how much revenue each of your sales activities produces. For example, you might be surprised that your top-performing salesperson only closes a few deals each month. This is because you can’t fit all your activities into your daily schedule. By tracking your sales activities and finding out which ones are most profitable, you’ll know where to prioritize your time.
Use data to find your best leads.
The best way to apply the 80/20 rule in sales is to find the best leads available. That means identifying the leads most likely to become sales opportunities and closing the moment you engage with them. If you don’t know where to find these leads, you’re probably spending too much time on low-quality leads that are unlikely to convert. You can use data to find the best leads for your business. Start by identifying your target customer. Next, search for their pain points and buying behaviors. You can also research which channels they prefer to use when making purchases. The more you know about your ideal customer, the easier it will be to find and connect with them.
Commit your time to closing deals you’re highly likely to close.
When you know where to find your best leads, you need to give them the attention they deserve. You’re not a superhero. You can’t close deals, respond to customer service issues, follow up with sales prospects, and keep your team happy all at the same time. Since you don’t have a superhuman skill set, you need to prioritize your time to make sure you’re dedicating it to closing sales you’re highly likely to close. Leads further along in the sales funnel are a better investment of your time. You can spend hours reaching out to leads that have never heard of your business. Still, that time could be better spent on existing customers and leads closer to making a purchase.
Final Thoughts: What’s the 80/20 rule in sales?
Success is a numbers game; the more leads you can get, the better your chances of closing a deal. The 80/20 rule for lead generation can help you focus your efforts on the sources of leads that have the highest chances of converting into sales. The 80/20 rule is important because it lets you focus on the things that matter most and ignore the things that don’t drive significant results. As a result, you’ll have more time to spend on the activities that bring in revenue and less time on those that don’t matter. When you understand the 80/20 rule, you’ll be able to focus on driving the most significant results. And that will take your sales to the next level.
The 80/20 rule in sales might seem unfair, but it’s an opportunity for you to focus on the things that matter most. The more successful salespeople determine what activities drive the most significant returns and dedicate most of their time to those tasks. To apply this rule, start by finding the best leads available. Then, please give them the attention they deserve with your time by prioritizing closing deals you’re highly likely to close.
Do you want to learn more about “What’s the 80/20 rule in sales?” Check out the 80/20 Rule: The Ultimate Guide.
James is the editor-in-chief of 8020ruleschool.com. James is a workaholic and an entrepreneur who has been in the tech industry for over ten years. He has worked with Microsoft, owns multiple websites, and now owns a mattress shop. James has a B.S. in Business Management Information Systems and a Master’s in Business Administration from Liberty University. He is currently pursuing a Master’s in Executive Leadership, and once he completes that, he will pursue his Ph.D. in Business Administration – Entrepreneurship. James also seeks investment opportunities, putting his money to work instead of himself. James is true believes in the 80.20 rule and seeks ways to implement the concept in every field in his life.