Marketing books often talk about the 80/20 Rule which says, simply, that 20% of your activities produces 80% of your results.
Of course we must then wonder what we're doing with the other 80% of our time that's only delivering 20% of our results.
So the question is - how many of us really analyze which of our efforts actually bring us that results-laden 80%? What is it that we do that brings in the majority of our customers or the bulk of our income?
And if you don't have enough clients or income right now, how can you determine which action steps to focus on that will "deliver the goods?"
Something to think about.
The 80/20 Rule is also known as the Pareto Principle, named for an Italian economist who discovered that 80% of the property in Italy was owned by 20% of the people.
Other ways to look at the 80/20 Rule include:
** 80% of your consequences stem from 20% of the causes.
** 80% of your revenues come from 20% of your products.
** 80% of your financial rewards are produced from 20% of your activities.
When I analyzed my own business, for example, I discovered that approximately 50% of my revenues are derived from passive/residual income efforts, using other people's products, with the other 50% stemming from coaching, writing and design work - all billed by the hour and done by me personally.
What I further realized is that the time spent on the passive/residual income stream is considerably less than the time spent on the hourly work. And once the initial setup on the passive and residual income streams is accomplished, my time involvement tends to diminish, even while the revenues increase.
The main sources of what I'm calling "passive/residual income" are (1) affiliate programs for products I offer on my website and (2) my new adventure in network marketing.
I truly enjoy researching the different programs that can make a difference in someone's life and business, so I tend to make directories of these - see
www.newradiance.com/affiliatedirectory.htm
It's not, however, the best way to gain revenue from affiliate programs, so in order to increase my income from this "passive" source, I'll work on more of the tested methods recommended by affiliate guru Rosalind Gardner in her Super Affiliate Handbook.
It'll be worth it to me to spend time re-reading her book, because I'll become more efficient and actually decrease the time and effort it takes to earn more revenues from this income source.
The other activity I am increasing is learning all I can about network marketing - particularly ways I can use my knowledge of niche marketing to help my network members become more successful in building their nutritional business.
I have already learned that network marketing is a powerful business model that has made a number of people financially secure. Guess which number - the 20% of folks who have figured out how to offer both cutting edge products and exceptional mentoring support. They undoubtedly account for 80% of the revenues in their respective networking companies.
And what I really like about this business model is that once I've learned how to do it right, I can teach other people how to do it right and they will carry on the teaching and mentoring, freeing up my time for other pursuits. But the revenues continue to arrive, once I have built my solid foundation.
Were I putting all my efforts into my coaching business, my income would terminate at the end of each hour.
Not so with passive/residual income programs. So, for the next 30 days, I've decided to focus on this area.
Can you analyze your own business to see where your best efforts need to be focused?
For example, you could look at the difference between teleclass (group) income versus one-on-one session income.
If your fee is $125 per hour for a private session, but you can easily book 20 people to a one-hour teleclass at $25 each, where would you say your *income-producing* time and effort were best spent? Especially when you can record your teleclasses and sell the audio files afterward.
$125 versus $500 for the same hour. 20% of your labor is creating 80% of your revenue if you compare hour by hour activities. You have to market your teleclasses the same as you do private sessions, and teleclasses require more preparation, but I think it's worth looking at the time/effort spent compared with the income received. What do your numbers look like?
Here's a little challenge, if you're willing to take it up.
Look at your income from the past 6 months and break down the sources. Figure out the percentage of the total earned from each source. Then look at the bigger percentage numbers and decide: (1) If it's work you love doing; (2) If the time and effort involved is worth the outcome; and, if it is (3) Make a plan to implement more of the same over the next 30 days.
Eliminate as many non-productive activities as you can.
Don't get many leads from your leads club meetings? Don't go this month.
Online networking pulling in more product sales from your website than one-on-one clients? Focus on improving the sales pages on your website and use those links frequently in your network posts.
Is your network marketing revenue starting to outstrip your coaching income? Use your coaching skills to mentor your downline, rather than advertise for coaching clients during your 30-day test.
See what I mean about concentrating on those activities that you *know* can increase business income?
And set aside - at least for 30 days - those activities that are in the "80% of effort producing only 20% of revenue" category. This is a hole that's easy to get into, without even realizing it. Awareness is the first step out of it.
We want the 80/20 Rule to be working for our highest financial good - and it can work, if we focus on... what works.
P.S. - I wrote this article over the weekend and "coincidentally"
learned today of a CD program by Richard Koch called - ta da - "The 80/20 Principle."
Here's the
link for The 80/20 Principle.
Copyright 2007 Barbara Casey
