![]() And so, analyzing which 20% of your content creates 80% of the results can help you optimize producing and implementing the best content. Implementing the 80/20 rule into your content marketing will drastically improve your results by seeing high traffic to your content. The idea behind it is that you should ensure that your audience gets the most out of their content by focusing on genuinely relevant topics. It's a practical yet straightforward concept to boost content quality and production. The 80/20 rule states that 80% of your results come from 20% of your efforts. ![]() One great way to keep yourself organized and produce quality content simultaneously is by using the 80/20 rule. It's hard to know where to start with something as expansive as a blog. It can help to grow your business but also attract new customers. ![]() More than anything, it highlights the consequences of running a company the same old comfortable way.įorbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms.In the online world, content creation is a powerful tool. The 80/20 rule doesn’t demand that you jettison most of what you do, but it opens your eyes to the possibilities of improved performance. It identifies wasted opportunities by putting a spotlight on what’s most important. The 80/20 model may make you squirm, because it forces you to confront the data that exposes your firm’s inefficiencies and misguided assumptions. But they are treated differently, which is what many businesses struggle to accept. They still get to their destination safely. It’s not that everyone else is treated poorly. One industry that does it right is airlines, which prioritize high-paying passengers, giving them elite status and better customer service. That’s an unprofitable way to run a business, because you end up over-serving small customers and under-servicing your most valuable ones. Despite the cutthroat nature of capitalism, many people in business have an egalitarian ethos that demands everyone should be treated the same and must have an amazing experience. This is an especially tricky demand when it comes to customers. (“We’ve had an office in Topeka for 20 years!”) But according to 80/20 principles, you follow the data and find the courage to do what’s right, or accept the financial consequences. Company owners love their early products, the ones that built their business. When you go 80/20, emotions will intercede. Imagine if they embraced that philosophy as an operating model. While many companies during Covid took revenue hits, many increased profits because they were forced to focus on the most valuable parts of their business. There are plenty of examples of companies forced to simplify their businesses because of supply chain issues, but it’s purely reactionary. Coca-Cola finally eliminated Tab to streamline production during Covid. When times get tough, they make hard decisions on the fly. You’re likely already doing 80/20, but under duress (and without a plan). Every management team has a sense that it can operate more efficiently, but most don’t have a set of principles to guide performance and enforce discipline. This increased revenue.Ĭompanies adopting 80/20 will overhaul their sales and compensation structures, manufacturing, distribution, billing - everything to prioritize the most valuable relationships. Our recommendation was to raise prices on those customers and reduce the margin on the best customers to retain them. Those small customers were paying less than the big ones, a fact the client didn’t realize. ![]() The entire bottom half was worth just 1% of revenue. An industrial supply firm offered more than 10,000 products to its sprawling customer base, even though the top quartile generated 95% of sales. It takes a long time for an organization, especially a sales-driven culture, to realize that not every sale is a good sale and not every dollar coming in the door has the same value. When we ask clients to look back a decade and analyze their customer base, they invariably find the majority of their best customers didn’t start at the bottom as minnows. Leaders fear this approach, because it appears short-sighted to lavish attention on big customers at the expense of cultivating the next big fish, but the reality is conversion rarely happens. You redeploy resources to focus on what matters. Yes, you’ll discard some customers and products, but you don’t necessarily reduce headcount or investment. The 80/20 philosophy is rooted in the idea of analyzing your business, identifying the best customers and prioritizing service to them so they stay with you. ![]() Just lop off the bottom performers, right? No. Here are four key observations - my top 20%, you might say - on adopting the 80/20 mindset:Ĩ0/20 is not about cost-cutting, it’s about time management. ![]()
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