How to Use Pareto’s Principle

When you’re busy creating a successful business, everyday you get hit with endless tasks that you feel that you must complete. How can we take back our days and create time wealth for ourselves? Instead of letting our days run us, how can we run our days the way we want to?

Perhaps this is where Pareto’s Principle comes into play. In the corporate world, this phrase is most commonly used to help business owners make more efficient decisions. This principle was discovered in 1906 when an Italian economist Vilfredo Pareto realized that 80% of the land was owned by 20% of the population. He also noted that 80% of the peas that he produced came from only 20% of his pea plants.

Over time, people began to realize that this type of skew in scale occurred in multiple areas of life. From business and wealth distribution, to even physical fitness training, economists found that 80% of the results come from only 20% of our actions.

Why should this be important to you? Once you realize that only a small portion of your actions causes the majority of the gains in your life, you can choose to maximize your efficiency by focusing on that small portion. By focusing on the areas are responsible for the most benefit, you can leverage your time to get more results in less time.

Many business managers and entrepreneurs claim that 80% of the company profits come from 20% of the customers and conversely, 80% of the company complaints come from 20% of the costumers. Taking advantage of this principle, you can understand which audience to target more, and which segment of customers to avoid. By doing so, you can make clear concise decisions that lead to drastic changes.

How does this relate to lead generation?

Before you even begin searching for leads, it’s important to realize what outcome you want to achieve. For instance, you can take this Pareto Principle even one step further. Look at the 20% of leads you’ve found that have led to 80% of sales. Then, look within the top 20% of that initial 20% (the top 4%). You will find that the top 4% are actually responsible for 64% of your sales. With this in mind, you can better create a plan to target those that give you the most return. Knowing this is crucial to developing a more efficient process of generating leads that lead to conversions.

This type of approach is essential when you want to create a result driven process. You utilize time way more efficiently by being smarter about what you do. Ultimately, understanding how to leverage time is essential when the ultimate goal is creating a scalable business without being overwhelmed.