How Vilfredo Pareto Might Be Limiting Your Sales Team

Vilfredo Pareto

Somewhere around 1906, economist Vilfredo Pareto observed that 80% of the land in Italy was owned by 20% of its citizens.  Sometime later he noted that 80% of the peas in his garden came from 20% of the pods.   Thus, the well-known 80/20 rule was born.  During his career he studied this as it relates to distribution of wealth and income. As a side note, his work was very controversial during the rise of Fascism

In the 1940s, Management Consultant Joseph Juran applied this principle to business. “80% of our revenue comes from 20% of our customers” and so on.

Today it is primarily a “given” that 80% of the sales come from 20% of the salespeople. A debate crops up from time to time regarding the best use of a sales manager’s efforts.  Should he nurture the top 20%, the middle 60% or the bottom 20%.  Several schools of thought exist as to the best answer.

Here’s the rub.  Many people consider the 80/20 rule as a truth.  It may be a truth but it most assuredly is not an absolute truth.

The best example of truth Vs. absolute truth I have heard is this: 

I Don’t Have Time To Get Organized

I made this sign a while back and I have it hanging on the wall right above my monitor.  It is front of me – eye level – whenever I am working in my office.  I stare it while I am working.  I’m staring at it right now.  Since I am aware that in my business model, these are the core things I have to do in order to keep growing my business, how come this is the first post I’ve written on this blog in a little over two weeks?

How come I’ve  only had one cup of Starbucks’ Green tea in the last 10 days?  How come that other than a flurry of Tweets over the last few days, have I pretty much been invisible on Twitter for some time?

Oh I have a good answer – one that allows me not to feel guilty.  I have too much to do!  Between working on actual paying projects, working intensely on some long-term marketing stuff and a plethora of family things to get done, I simply haven’t had time to work on my sphere of influence communication.

If a coaching client told me those were his reasons for ignoring these basic yet vital activities, I suspect he’d see my dark side. I’d tell him that there are only two solutions, based on the truth of his excuses. The first is acknowledging that

LEAD MANAGEMENT PROJECT: Step #1 – Gather

I wrote earlier that you should have ZERO TOLERANCE for not having a documented “next step” for EACH AND EVERY name in your database.

This is the first in a series of posts on how to get there and what to do next.  When you’ve completed all the actions in this series you should have a crystal clear picture of how to begin using the vast amount of information you already have to increase your sales. 

ZERO TOLERANCE FOR INACTION

This is a pretty simple concept that is often missed.

100% of the names in your database must have a NEXT ACTION assigned to them.

The action may be to reach out to them once a year – if you don’t record that plan in your system you will forget about them.

It doesn’t matter if they’re a strong, high probability prospect or a weak “never likely to buy” lead, the fact is that you will never sell to them if you never contact them again.

If you truly believe that there is absolutely no value in every reaching out to them again – throw their name away! If you keep it, plan your next action.

Got it?

COLD CALLING IS NOT PART OF A SALES REP’S JOB

This is neither an endorsement nor a condemnation of cold calling.  In some models, it makes sense, in some it doesn’t.

This post isn’t just about cold calling – it is about all lead generation activities.  Lead Generation is a marketing function.

I draw a distinct line between marketing and selling.

• Marketing: Reaching out to potential buyers with the goal of having them raise their hand and say “I’m interested in discussing your product.”
• Sales: Working with those folks who raised their hand with the goal of closing a sale.

Once you embrace this concept, you’ll see that the time spent on lead gen (or any marketing activity) means that the individual working these activities is NOT working on sales activities.

Sales activity is the part where revenue is generated.

That’s all fine and good but what if you are a small organization