The Pareto Principle – or the 80/20 rule

The 80-20 rule, otherwise known as the Pareto Principle, states that 80% of outcomes, or outputs, result from 20% of inputs. My experience is that our tendency as business owners is to look for new business from new clients. The 80-20 rule suggests that as we  are likely to win 80% of our business from 20% of our clients. This saves time and energy.  

So, how well do we know our existing clients? There is more to understanding them than just their business. A sustainable business relationship is built on a personal level. It may be shared hobbies and interests, as well as liking that person,  Working with a client over an extended period means they have an investment in the relationship, they will have a degree of trust in you and your offer. A short term business transaction is more likely to be seen as a cost than a investment. In building that longer term relationship, whatever the business size or type we need to earn that trust, by showing gratitude for their investment in us. The best way of doing that is be proactive in keeping in touch and understanding their expectations. 

How can we add value to the relationship for our clients? The simplest way is to just reach out to them. Pick up the phone and become a trusted source of advice. End your call by asking if you can help them at all. Some will say no thanks, some will talk about aspects of your business, and others will maybe ask if you know a financial advisor, or a copywriter they could use. Helping without expectation of return builds trust, adds value to your relationship with that client, and also adds value to your wider network as you will become a valued referral partner and connector of people.

By taking a proactive approach to building relationships with our existing clients we are making the best use of the Pareto Principle. The core of the 80/20 rule is identifying a business’s best assets and using them efficiently to create maximum value for all parties.

At MBD we show how you how to have Freedom and Choice in life. With over 25 years of running a business and helping hundreds of companies to overcome the barriers to success, we are the support you need. I offer clients a powerful combination of counselling, business coaching, mentoring and spiritual coaching to connect you with your purpose. Connect with MBD to discuss how we can support the next stage of your business success.