80/20 Rule

The 80/20 rule, also known as the Pareto Principle, is a fundamental concept in sales and business management. It posits that roughly 80% of outcomes result from 20% of causes, or that a small fraction of efforts yield the majority of results.

Why is the 80/20 Rule Important Today?

Now, if you’re in sales, you’re probably thinking, “I’ve got a quota, deals to close, leads to follow up on—I don’t have time for a ‘rule.’” But this rule isn’t here to add to your plate, it’s here to make your plate a gourmet meal of productivity and success. With the 80/20 rule, we’re looking at quality over quantity. Imagine focusing on the 20 percent of your leads that are going to bring in 80 percent of your revenue. Sounds sweet, doesn’t it? Now, you’re not chasing every lead down the rabbit hole—you’re focusing on the golden geese, the leads that are ready and raring to convert.

This principle is a salesperson’s best friend because it’s about efficiency and effectiveness. It’s not about ignoring the 80 percent of tasks or leads that are less productive, but about prioritizing the 20 percent that are superstars. In a world of endless emails, calls, and meetings, knowing where to focus your energy means you’re not just closing deals—you’re closing the right deals.

What is the History of the 80/20 Rule?

We’ve got to tip our hats to good ol’ Vilfredo Pareto for kicking this off in the late 1800s. But when did the 80/20 rule saunter into the sales arena? Well, it made its grand entrance when businesses realized that not all customers are created equal. Some are low-hanging fruits ready to be plucked, while others... well, they need a bit more nurturing.

In the world of sales, we got hip to the fact that a small proportion of clients brings in a large proportion of the revenue. We started noticing patterns—like how a small percentage of features in a product could sway the majority of sales, or how a handful of objections are behind most sales roadblocks. This realization was like turning on a light in a dark room.

How to Implement the 80/20 Rule in Sales

Ready to be the Bruce Lee of sales efficiency? Let’s do this. The 80/20 rule is your nunchaku, the weapon you need to slice through the noise and focus on the deals that’ll make your bell ring. The first step is identification. Roll up your sleeves, dive into your data, and identify that golden 20 percent of clients, features, or sales activities that are bringing home the bacon.

Build a strategy that’s like a VIP room for your top clients and prospects. Tailor your approach, customize your pitches, and give them the red carpet treatment. Now, I’m not saying neglect the other 80 percent—but know where your bread is buttered.

You’re going to need some tech muscle here. CRM, analytics, the works. Use Close to automate the process, track your leads, and gather data to identify the golden 20 percent. Optimize your sales processes, cut the fluff, and focus on actions that move the needle.

Frequently Asked Questions About 80/20 Rule (FAQs)

What is the 80/20 Rule in Business?

The 80/20 rule in business is like having a magnifying glass that shows you where the treasure is buried. It states that 80 percent of your results come from 20 percent of your efforts. It’s not just a rule—it’s a lifestyle, a way to identify the power players in your actions, clients, or features that contribute the most to your success. To put it simply, it’s about focusing on the 20 percent that’s pulling the heavy weight and making things happen.

How is the 80/20 Rule Used in Sales?

Ever felt like you’re juggling a million leads, calls, and tasks? The 80/20 rule is your ticket to cutting through the chaos and honing in on what matters. It’s used in sales to identify the 20 percent of leads that are likely to bring in 80 percent of the revenue. It’s like having a compass that points directly to the goldmine—a tool that helps sales reps focus on high-value activities, prospects, and tasks that significantly contribute to revenue and business growth.

Does the 80/20 Rule Apply to All Businesses?

The 80/20 rule is like that universal remote—it can work with almost anything. While it’s not a one-size-fits-all, it’s a principle that’s been seen across various industries and sectors. It’s a pattern where a small proportion of inputs (efforts, clients, products) often leads to a large proportion of outputs (results, revenue, success). Businesses can use this rule to hone their focus, optimize efforts, and boost efficiency to create a well-oiled, high-performing machine.