You really can work much less and make much more. A great new book by Perry Marshall tells you how. Here is my summary of 7 ways to a richer, more pleasant life:
1. Find the Right Customer. This is more important than anything else. If you are an employee, it means finding the right employer and the right boss. 95% of firms are not the right employer. Firms are not equal. Only a few firms – those growing the fastest and making the most margins – have really got a great formula.
In Perry Marshall’s words, “Selling to the right person is more important than all the sales methods, copywriting techniques, and negotiation tactics in the world. Because the wrong person doesn’t have the money. Or the wrong person doesn’t care. The wrong person won’t be persuaded by anything.”
“No cold calling. Ever. You should attempt to sell only to warm leads.”
2. Give the customer insight before you try to sell to them. “You will dramatically enhance your credibility,” according to Perry, “by authoring, speaking, and publishing quality information. Generate leads with information about solving problems, not information about the product itself.”
3. Your best customer is your existing customer. “The most valuable asset you can own is a well-maintained customer database, because people who’ve already bought from you are way easier to sell to than strangers.”
4. Customers are not equal. A few are hugely more important than the rest. Sure, everyone recognizes this intuitively, yet almost nobody realizes how true and important customer inequality is, or the extent of imbalance in the value of different customers. According to Perry, “If you have 30 customers, their capacity to spend money with you looks like this. The top customer generates 20 percent of your business, the next two largest give you the next 20 percent, the next 4 gives you another 20 percent, and so on. The same principle of inequality applies to almost everything in your business.”
5. Go for the few really big and enthusiastic customers, and make sure you have products that are expensive enough for them. Perry has generated an “Invisible Money Finder” based on the 80/20 principle which works like this. “The 80/20 Power Curve shows you if 40 people would spend $50, 72 people would spend $30. The curve also shows you that if 40 people spent $50, 8 will spend $200. Almost everybody has at least one passion, one interest, one obsession where they’ll gleefully spend irrational amounts of money. For some it’s makeup or shoes. For some it’s rock concerts. For some it’s bowling, bird watching, or skiing... If 50,000 people will spend at least $100 per ticket for a football game, 238 will spend more than $10,000.”
“Handy rule of thumb: 80/20 says that 20 percent of people will spend 4 times the money. It also says that 4 percent of people will spend 16 times the money. Memorize this – it’s one of the most powerful facts you could ever know about business.”
“If your website sells just one book or one wedding candle or one exercise bank for $29, you’re leaving buckets of money on the table. Because if you scratch one narrow itch on some super-specific topic, the intensity of that itch and the propensity to spend money is easily 100:1. Selling that one book was merely a way to attract a long-term customer. That means you can add a $290 product and a $2900 product, and you’ll probably double your sales.”
Perry’s Money Finder is explained for free at www.8020Curve.com
6. Sell results, and guarantee them. Perry says that “the essence of getting more money for what you sell is, Sell results, not procedures. If you want to command higher prices than anyone else, then guarantee better results than anyone else. If you’re selling for a company that lacks the will or ability to guarantee results, get yourself a different job.”
7. Raise your income by just doing the few highest-value things you do. Outsource the rest. Perry uses the 80/20 power curve to calculate the value of eight different hours in your day, if you earn $20 an hour. Your least valuable hour is worth only $4.50. But your most valuable hour is worth $930. He recommends outsourcing the least valuable things you do, starting with household chores. He also has a handy tool he calls the Marketing DNA Test, described in the book with free access.
Perry’s book is called 80/20 Sales and Marketing and it’s already garnered 47 favourable reviews on Amazon.com, with 4.9 stars out of 5. Perry sent me the book before it was published and I liked it so much I agreed to write a Foreword. (I should make it clear that I have never met Perry and have no commercial relationship with him.)
What is most gratifying is the new surge of interest in the 80/20 principle and a realization that we are still at the stage of rapidly increasing returns from its application. As Perry has said, “most people think they understand 80/20. Not one person in a thousand truly does.” It’s my fervent hope that all of you who read my blogs and books will use the Principle, because it really can make life less stressful and more rewarding, and, God knows, we need to stop wasting that most precious gift of all – human energy and imagination. Please place yourself at the forefront of the 80/20 movement, because it is the way not just to personal and business success, but also to a more sane and relaxed society. If we do the few vital things that have good results out of all proportion to the energy and resources used, we really could transform our world.