The 80/20 Rule and How to Sell More
The well known 80/20 law says that 80% of the results come from 20% of the effort. If you are a sales rep this implies that you should figure out what activities make up the 20% and do more of them. Easy to say, but hard to do. However, this post outlines 3 steps to improving your sales productivity. In the spirit of 80/20 and not wasting time, first ask if time allocation is your biggest issue. If you know you are spending time on the right things (selling the right solution with the right value proposition to the right people in the right accounts), then you don’t need to read the rest of this post. Instead, work on quality and velocity and effectiveness – doing the right things better, faster and smarter. But, if you’re like the rest of us, read on…
1 – Understand what drives your productivity
The first step is to understand what the actual 80/20 numbers are for you. Underlying 80/20 is the question – “What effort is required to generate the bulk of the results?”. E.g. not counting bluebirds or carry overs, what results were the 80%, and what effort generated them? For a hunting territory it could be 5% (because so much of the selling effort gets no response), and for a mostly farming territory the number might be 50% (because existing customers tend to buy more).
2 – Analyze your time
The second step is to do some analysis on your selling time. Most of us have high-probability and low-probability selling time, and low-reward and high-reward activities. Low vs. high will be different for each rep; here are some general guidelines:
Probability – Traditionally the average pipeline probability is 33% (win one, lose one, one goes away). I recommend you view anything that has less than 20% likelihood of success as low probability, all else is high probability.
Reward – This will vary greatly by solution and market. In general a good rule of thumb is 10%. Anything that could contribute 10% or more to your quota is high reward, all else is low-reward.
3 – Small changes = big results
The obvious objective is to have less low-probability and more high-probability. Review your calendar for the past month and list the opportunities, accounts, partners and relationships where you investing your selling time. Next, categorize each one in the four boxes above. Then make a few decisions:
STOP doing everything that falls in the Low Probability/Low Reward box.
LIMIT time spent in the High Probability/Low Reward box. This can be a time sink as those opportunities, customers and people can still tie up a lot of time.
MANAGE your time in the Low Probability/High Reward box. Don’t over-invest, but don’t ignore this box.
START doing more activities in the High Probability/High Reward quadrant. This is where you should move your time from the other boxes (especially the Low/Low box).
The key is to remember that small changes can make big differences. For the hunter with a 5/80 effort to results ratio, 1% of additional productivity (going from 5 to 6%) could be a 20% bump in results. While most of us don’t have our time leveraged that highly, we will see an impact with a few of the right changes. Just by transitioning your activities to invest in a few of the right opportunities, accounts, partners, and relationships, you can see a significant increase in your results.
