The 80:20 Rule- Your Formula For Success

Written by John Payne


The previous 'dirt-world' retail business I managed had a large turnover, a very high profit, and less than 100 lines. Early in 2001, I was contracted to manage another business. This one carries over 800 different lines, yet has a turnover of only about a sixth ofrepparttar other business, and a lower profit margin. They both have a comparable amount of traffic and credibility inrepparttar 121654 market, so how can it be thatrepparttar 121655 results are so different?

The explanation starts with Vilfredo Pareto, an Italian economist and political sociologist who lived from 1848 to 1923. He devisedrepparttar 121656 law ofrepparttar 121657 'trivial many andrepparttar 121658 critical few', better known as Pareto's Law, orrepparttar 121659 80:20 rule. This rule says that, in many business activities, 80% ofrepparttar 121660 potential value can be achieved from just 20% ofrepparttar 121661 effort, and that one can spendrepparttar 121662 remaining 80% of effort for relatively little return.

Old Vilfredo might have lived a century ago, but he was spot on. I've been in business a long time, and I can confirmrepparttar 121663 almost universal truth ofrepparttar 121664 80:20 rule, in many forms.

- When Sales Manager of a Realty office, I had 19 sales staff working to me. About 85% ofrepparttar 121665 business was written byrepparttar 121666 four top staff.

- In a Consumer Electrical business I owned, around 75% ofrepparttar 121667 turnover came fromrepparttar 121668 the best-selling 20% ofrepparttar 121669 stock.

- In an eco-tourism business I now manage, there are almost 40 Departments of stock. One department alone produces over 25% ofrepparttar 121670 profit;repparttar 121671 next five departments producerepparttar 121672 next quarter of profit;repparttar 121673 next seven another quarter, andrepparttar 121674 next twenty-five or so together only producerepparttar 121675 last quarter of profit.

The 80:20 Rule applies in almost every sphere. It's uncanny. In almost any field, 20% ofrepparttar 121676 resources produce 80% ofrepparttar 121677 result. It's vital to understand thatrepparttar 121678 reverse is also true- things that take up 80% of your time and resources, will only produce 20% of your results.

MARKETING COMMUNICATIONS AND PUBLIC RELATIONS STRATEGIES FOR THE RECESSION

Written by Jon Boroshok


Many companies are now payingrepparttar price for following bad counsel duringrepparttar 121653 1999-2000 tech gold rush. While entrepreneurs and VCs vaguely understood that a strong marketing communications (marcom) and PR campaign is needed to create awareness, build brands, and drive sales, too many were ignorant when it came to deciding how to selectrepparttar 121654 right agency to help maximizerepparttar 121655 return in investment.

Using a rationale that paralleledrepparttar 121656 old adage, "nobody ever got fired for picking IBM," companies were often advised by VCs and investors to retain a large, "brand name" PR agency with a posh downtown address. These agencies often came with a premium price and inexperienced junior staffs. There was no emphasis on value. Of course many of these larger agencies were often "friends" ofrepparttar 121657 VCs, with referrals and finders fees - often a conflict of interest -- beingrepparttar 121658 rule rather thanrepparttar 121659 exception.

Despiterepparttar 121660 current recession economy, massive layoffs, and dismal earnings announcements, many tech companies are remaining in business, doing their best within a labor market where top producers are still in demand. Because they have been reluctant to cut highly sought technical personnel, their public relations and marketing departments are oftenrepparttar 121661 first to be downsized or last to be built up, often torepparttar 121662 point of counter-productivity.

Some companies cutting back or just starting to build their marcom efforts have begun looking outside their organizations and "outsiderepparttar 121663 box" for value from PR and other marcom services. They are learning that they can get more for less, particularly in tough times. It's a new concept to VCs.

As funding has dried up, companies have cut their PR and marketing communications budgets. These companies -- along withrepparttar 121664 VCs and investors -- are becoming better-educated buyers of marcom services. The same marcom/PR agencies that once commanded a monthly retainer of $30,000 are suddenly offeringrepparttar 121665 same services for much less. They've also been downsizing, and staff turnover may lead to new, inexperienced members ofrepparttar 121666 account team. Whilerepparttar 121667 investors and tech companies are still scratching their heads trying to figure out what allrepparttar 121668 extra costs were for, they're finding that traditional tech PR agencies still insist upon selling more services than necessary, and require retainers in excess of $15,000 per month. This is frequently beyond what a pared-down budget can afford, especially when a company is simply looking to maintain visibility or beef up its own efforts.

Whether downsizing or ramping up responsibly, economically-astute investors and companies are discoveringrepparttar 121669 option of outsourcing marketing communications and PR to providers who can pick uprepparttar 121670 slack and provide services on a smaller, flexible scale, often on a project-basis. Smaller ("boutique") agencies, virtual PR teams, and individual practitioners are a growing alternative for companies of all sizes, particularly those with monthly marcom budgets well under $10,000. Like their clients, these alternatives have to work smarter, faster, and cheaper in a slowing economy.

Working on a project basis usually goes againstrepparttar 121671 grain ofrepparttar 121672 business models of larger agencies. Downtown offices with skyline views, employee salaries, benefits, and equipment are all overhead costs that must be passed along torepparttar 121673 client. Large agencies need steady retainers to make sure financial goals and obligations are met. They may offer prestigious addresses and a recognizable CEO, but who isrepparttar 121674 day to day contact performingrepparttar 121675 actual account work? Is retainingrepparttar 121676 services of a large agency really a prudent investment or just a "C.Y.A." maneuver?

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