Did you know that 20% of your carpeting is likely to get 80% of the wear? If you did, you’re probably familiar with what’s commonly known as the Pareto Principle.
It’s named after the Italian economist Vilfredo Pareto, who in 1897 found a consistent mathematical relationship between the proportion of people living in England and the amount of income or wealth this group enjoyed. He found that 20% of the population enjoyed 80% of the wealth!
This principle has since been expanded to this:
The minority of causes, inputs or effort usually lead to a majority of results, outputs or rewards.
In other words, 80% of what you achieve comes from 20% of the time spent. And 20% of customers produce 80% of the revenue; 80% of what we accomplish comes from 20% of our time and so on.
The reason it’s so valuable is that it’s counterintuitive. It’s not what we expect.
It’s strange how business seems to be governed my unwritten rules. I’ve recently discovered one of my own.
I’ve recently checked my database of unconverted leads for the past few months. That is, prospects who have asked for an in-home quotation but have not gone ahead. It’s brought up an unusual principle that I’ve called ‘The Principle of the Inverse Appointment Time’
I discovered that in the last few months I have only eight in-home quotes that have not turned into jobs. Of those eight, I noticed a similarity that I’ve turned into this rule:
“The more impatient they are to get a quote, the least intention they have of getting the job done.â€
Of those eight quotes, SIX told me there were in a hurry to have the work done and I needed to provide a quote as soon as possible. In nearly all of these cases, I changed my schedule to provide a quote quickly. Once in the home, it seemed that the urgency had dissipated.
Now, we always qualify our prospects. In fact we try to DISQUALIFY them to be absolutely sure that we are not wasting our time with people who don’t want our level of service or can’t afford it. And yet six have fallen through the net! (Interestingly that’s 75% - almost following the 80/20 rule).
There’s always going to be time wasted with prospects that will not go ahead. So how can this be kept to a minimum? Well, now I follow the rule: “The more impatient they are to get a quote the least intention they have of getting the job done.â€
I only want to visit homeowners who are pre-interested, pre-qualified, pre-educated and pre-disposed to using me. If they’re NOT, I spend time to make sure they are…before I visit.
If they want me to quote in a hurry, I direct them to my website and ask them to come back to me if they are (pre)interested (and now pre-educated). This also is counterintuitive. They expect me to drop everything and come round immediately. Do I lose a few? Probably. But I sure save a lot of time in relation to the inconvenience and frustration caused.
Probably around 80%.