How to use the 80/20 Principle to Save Time and Make More MoneyMar 30, 2022
In this week’s blog post, I am breaking down one of my favorite topics in grad school: the 80/20 principle. There is a reason why it is making a comeback. The most popular feedback I get in my DMS is “Holly I don’t have enough time” or “Holly, I just can’t find enough customers."
What if you already had exactly what you needed?
Let me explain.
The 80-20 rule, also known as the Pareto Principle, is a strategy that asserts that 80% of outcomes (or outputs) result from 20% of all causes (or inputs) for any given event. In business, a goal of the 80-20 rule is to identify inputs that are potentially the most productive and make them the priority.
Why is that important? Think of it this way:
80% of your results come from 20% of your focused effort.
20% of your customers will bring you 80% of your revenue.
The key to following the 80/20 rule is to identify that roughly 20 percent of your actions or most productive tasks lead to the most success. This can apply to any area of your professional and personal life.
How often have you said you would like to have more time? Or make more money? This principle is a proven strategy that states if you focus on the top 20% of your activities, you essentially will be creating just that.
How to use the 80/20 principle to save time and make more money
To implement this principle, when you sit down to work each day (on whatever category you are working on) ask you yourself, is this a top 20% task? Or in more normal terms, is this a needle mover in my business? Aka will it lead to more impact, revenue, freedom, etc.
As an example, I am actually writing this blog on a Saturday morning. I had two things on my to-do list today before my kids got up. One was to order them new shorts for spring (nothing fits and when you have to buy two everything sells out). The second task was to write this blog post. This is an easy example, but which task is the needle mover?
The blog post because it drives content for our entire business which eventually brings in clients.
It would have been much easier for me to sip my chai tea at 6 am and browse Old Navy mindlessly shopping for shorts, but because I know this is not a needle mover activity (sorry girls), I chose to write the post. And I can shop later.
See how that works?
20% of your time and how you spent it gives you 80% of your results.
So simply ask yourself the question before you start anything, is this going to move the needle? If not, make sure you have those tasks done first.
By applying the 80/20 rule, you can not only hone in on the things that will bring your greatest success but also identify the main causes of problems or lack of progress.
Being busy doesn't equal being productive.
Here’s another spin on the Pareto principle. It also states that repeat customers generate revenue that is nearly 16 times more efficient than one-time customers. The potency of 80/20 is that 20 percent of your customers are generally responsible for 80 percent of the sales.
So in addition to really taking a look at what you are doing each day and making sure that it moves the needle in your business, why not take a closer look at your best customers too?
This is definitely a needle-moving task. Not only does it serve them more, but makes you money!
This is where I implement a “client care” day or even just an hour to really make sure I am serving my best clients the best I can.
We want to make money in this business. That's the whole point. But what if there was a way to make money and feel good at the same time?
Are there new offers you can create just for your current clients? I actually have a secret menu of offers that I have to serve my private and mastermind clients. It is 100% customized to them and what they need.
The customers today want Good + Fast. There is zero patience in today's society. When you add on amazing customer service it is gold. You automatically stand out.
Think of Amazon. Why do you like it? It's good. And it's fast. Some might even say great. Their customer experience is easy to work with.
Same with Apple, although I would say Apple is extraordinary. And fast, but not cheap. People pay for the customer experience.
Make your Customer Service Stand Out.
Make it known that you are worth working with. Make the experience amazing for those clients that are already working with you. Chances are they will refer you and you all will benefit more.
20% of the effort. 80% of the results.
I don’t know about you, but anytime I can save time or get time back and actually make a bigger impact I am in. This is a super simple method that you can implement right now.
Strategy isn’t that complicated. It is actually useful. If you like these types of tips let me know and I can talk about more of them.
Hit me up in the DMs. How are you implementing the 80/20 principle in your life and business?
Looking for more on this topic and your High-Level Action items? Check out the Strategy Lab in the Crush the Rush Club!