Selling & the Pareto Law of 80/20

 In sales organizations it has long held true that 20 percent of the sales force will make up 80% of the sales. That’s a pretty dismal outcome for the vast majority of the sales people isn’t it? 

What’s really important to know is that you don’t need to be in that group. The fact that you’re here reading this article rather than watching TV of something you’d rather be doing is proof of that.

Anything someone else can do you can do as well (no we’re not including dunking the basketball like Shaq). This means if you’re not in the top 20% in sales you can be - keep reading and apply what you learn!

The 80/20 rule is actually called Pareto’s Law after Vilfredo Pereto who was an eighteenth century Italian economist. The law also applies in just about any venue where ‘things’ (including people are compared.

Examples:

20% of the products of company offers will make up 80% of the profits

20% of a company’s clients will make up 80% of the total sales volume

20% of a company’s clients will make up 80% of the hassles you go thru.  

As far as sales is concerned the 80/20 rule also comes into play. That is to say that 80% of the prospects you contact at any one particular time will not be interested in buying at all.

You’re goal is not to just dump those prospects to race on to the red hot ones. Yes, you do want to get to the people ready to buy now but you also want to make sure you are building new and better relationships as you move thru your day. Mangers doing training in sales need to have their people focus on relationships and not preaching that selling is a numbers game.

Knowing Pareto’s law will make the no’s you receive easier to bear for sure and will also give you a sense of what response you should be receiving over the long term.

Taking the 80/20 rule a step further into the sales game we could also extrapolate that out of the 20% who MAY be interested in what your selling – 80% of those folks will not graduate from being ‘interested’ into being committed enough to buy now.

So one could make an educated guess that you’re now down to 5 really valid prospects. I suggest you not accept these numbers as law for the following reasons:

• The quality of your leads will have a huge impact on the sales you make
• The quality of 80% of the training in sales people receive is quite dismal – even if they know the product they often know little about the training in sales itself
• Your own personal success has far more to do with your expectations and beliefs than we can accurately measure.

It’s true on the surface that sales is a numbers game but please do not take those numbers as dogma. What I mean by that is people often play the ‘numbers game’ instead of the game that REALLY pay off  - which is the ability to start genuine conversations with your prospects. This seldom ever happens when the sales person is uses a canned sales scripts.