Follow The 80/20 Rule


A FACT of business is the so-called ’80/20 Rule’. This says that 20% of your clients will provide you with 80% of your income. A perfect example of this is in the Antiques Industry. When an Antiques Dealer starts out in business, he/she has to spend a lot of time building up not only a stock of quality artifacts, but also an equally large portion of time on building a client base of collectors or aficionados of antiques – a list of buyers.

However, once a client has bought a few examples, a trust naturally develops – the client knows the dealer’s prices are fair, supplies good quality antiques and the dealer is honest. Next step? The antiques dealer becomes a ‘searcher’ of antiques the client is interested in. The dealer takes a note that client X is in the market of a Georgian, gate-leg table, in oak with ball & claw feet; or client Y is looking for a an early Victorian, glass-fronted bookcase; or that client Z (me) has a space on his office wall for an original Michelangelo or Rembrandt. (Okay, I’m stretching it a bit here…)


The dealer will keep a note of the client’s requirements and as soon as something suitable comes on the market, the dealer knows that there’s a very good chance that the client will buy. And if you stop and think for a minute, there is probably a good number of your clients that you know well. They come back to you frequently, they’ll spend with you without hesitation, they respond to any contact you make with them. Maybe you or your staff even know them by their first name. They’re your 20%.

You have certain clients that you know are as solid as the Rock of Gibraltar. They trust you, you appreciate them, and you always do your very best to keep them happy. In fact, you’re applying the 80/20 rule already, possibly without knowing it. 80% of your sales (or income) will come from 20% of your clients. This is an immutable rule that simply doesn’t change. An Italian Economist by the name of Pareto proved it, too. You’ll find that it’s a fact.

This 20% can work for you in another way too: because as ‘good’ clients, the chances are very high that they’ll bring you new clients too, thereby increasing the profits that they make for you.

Adios the noo!

By Norman Macleod

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