Almost all small & medium enterprises suffer from effects of 80-20 Rule in sales team performance and sales of products.
CEOs either don’t care, or do not know how to overcome it, or they just believe that full range of a product helps customer to consider them favourably.
What is important here is that there is a POTENTIAL HUGE GOLDMINE waiting to be tapped, but no one knows how to mine the gold. In most cases the CEOs do not even know if there is a goldmine at all.
There is ONE BIG concern in the minds of the CEOs. They have a fear that any action on bottom 20% or 40% performing assets will upset the top 80% or 60% adversely. So the CEOs take NO ACTION.
I want allay these fears.
I have successfully used the “Pareto Squared Rule”.
Let me explain this.
First let’s understand the math for this rule –
Step 1: 80% Output is generated by 20% Input
Step 2: 80% of 80% Output is generated by 20% of 20% Input. (Using Pareto’s Rule on the outcome of step 1). This is Pareto Squared.
The Result:
80% of 80% is 64%.
20% of 20% is 4%.
So, 64% output is generated by 4% input.
Practical Application:
While driving business growth strategy, a CEO must implement following steps:
1) Protect and secure the top 64% revenue activity. Not to be touched during the implementation of new strategy, till the strategy is assuring success.
2) The 16% output which comes from 16% input, is the playground for exponential growth. While implementing new strategy, the exiting business is supplemented with the new input, thus protecting existing and supported by new growth areas.
3) The mid-40% to 60% is where the new strategy implementation plays. However, it does not mean junking the old. It is all about find the hidden value in it to make it grow exponentially.
An important point to note: The 80-20 rule is generally in play not singularly, but across various assets – salespeople, products, marketing channels, sales channels, geography, market segment, customers etc. So finding the interplay of Pareto Squared Rule is the skill which needs to be mastered by every CEO/CSO/CMO/Founder.
Pareto Squared is an ideal tool for CEOs who are implementing a change or driving a strategy implementation program.
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Hi, I’m Mayank Gupta. I simplify B2B sales strategy. I help to visualise your customer’s unique journey with your brand and offerings, enabling you to build a custom sales value chain that 100% aligns to the buyer’s value chain, thereby enhancing sales win rate to 3x to 5x. DM me to know more.