The Pareto Principle states that for most outcomes 80% of consequences come from 20% of causes.
In business, you will find that 20% of your customers provide you with 80% of your income, and consequently you will also find that 80% of your time is spent deriving only 20% of your income.
Using the Pareto Principle, it makes sense to spend more time working with those 20% of your customers who provide you 80% of your income, and spend more time trying to find customers who match that same profile of those 20%.
Sadly, amongst the 80%, there are always customers who are not willing to spend and pay you what you are truly worth for the value that you bring to the market place.
These people will be:
- Customers who love what you do but genuinely can’t afford to pay you what you charge.
- Customers who know what you charge and understand the value that you bring to the marketplace, but don’t want to ever pay that much.
- Customers who believe that your fees are to high, no matter what, and will never pay you for what you do, because they don’t value the skill and expertise that you bring to the table.
So what should a business owner do?
Here’s what a business owner SHOULD NOT do.
You should NEVER try to be everything to everybody with your customers.
If you do try to be everything to everybody, what you will find is this:
- You will find that there will ALWAYS BE some customers who you will never please, no matter what you do.
- You will find that while you are trying to please EVERY customer, you will offend some customers who really do want the skills and services that you provide, but want you to deliver those skills and services to them in more comfortable surroundings than the hurly-burly environment that you are operating in.
Margaret Thatcher, the former British Prime Minister, said this:
“If you just set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing.”
Show me someone who’s aim it is to please everyone, and I’ll show you a loser.
To be successful in business, you will always have to break a few eggs.
I received a newsletter this morning…
I received a newsletter this morning from Dan Kennedy who wrote that he never conducted customer satisfaction surveys of his audience, because the only opinions he was interested in was the opinions of those people who purchased his products.
Kennedy wrote that in those surveys, most people being asked weren’t qualified to evaluate him, and he did not care what they thought.
It’s food for thought…
Are you game?
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