April 26, 2022
Episode 51: The 80/20 Rule

On this episode, Amy breaks down her absolute favorite thing to teach sellers. The 80/20 Rule. And how this principle is an absolute game changer for sellers.


On this episode, Amy breaks down her absolute favorite thing to teach sellers. The 80/20 Rule. And how this principle is an absolute game changer for sellers.

  • What is the 80/20 Rule? (00:45)
  • Why does it matter?  (4:37)
  • How to execute3? 

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Transcript

[00:00:00] Amy: Uh, hello friends, welcome to the Revenue Real Hotline. I'm Amy Hrehovcik,

[00:00:15] more importantly, I'm very excited that you decided to join us today, friend. I know you've got a ton of options and I appreciate you. This is a show about all the hard and uncomfortable conversations that arise while generating revenue. And how to think, or rethink what we're doing, why we're doing it. And then of course, how to execute differently. And like I said, I'm happy you decided to come along for the ride.

[00:00:45] A few weeks ago, I did a post about what's the one most impactful thing that you've learned while selling. Right. If you had to boil it down to one thing. It was interesting. The responses that came back, I was actually pleasantly surprised to see all of the, like, learn how to be truly about the customers. Right. That's all well, and good. And I support that wholeheartedly. However, my thing, my number one thing would be the 80 20 rule. Also known as Pareto's Principle. This happens to be my all time favorite thing to teach sellers. Frankly, I think that this should be required learning from like moment one, whenever anybody steps into this profession. However it is what it is. Okay. 

[00:01:33] So Pareto was an Italian dude that made an observation about the distribution of wealth in Italy. Particularly that the lion's share of the wealth went to about 20% of the people. And that observation went on to fuel what became the 80 20. Now, if we want to be particular, this is not a law per se.

[00:01:58] The 80 20 rule says that you were going to get 80% of your results from 20% of your activities. Think about that. 80% of your results from 20% of your activities. 

[00:02:15] This is also could be 20% of sellers on the team produce 80% of the. 

[00:02:21] 20% of the customers create 80% of the revenue. 

[00:02:26] 20% of the bugs CA, if you're in the development land, cause 80% of the crashes. 

[00:02:33] And 20% of the features that you're selling because 80% of the usage I could go on and on, but allow me to translate roughly 20% of the things that you do will prospecting friends will generate 80% of your results.

[00:02:50] Now to be clear, this is not a hard, fast law, mind you, but the numbers have been pretty spot on in my experience. So your job as sellers is to identify what your 20% activities are starting with prospecting so that you can both do more of what works and stop doing what does not. And this goes for you too AEs, right? Yeah. I'm I, hopefully nobody that's listening to this podcast is leaning on their SDRs and not picking up the phones themselves. Right. Which is the word entitlement comes to mind, but it's scary. Right. I'm going through this now, too. So I feel you there, but anyway, again, a very helpful principle. 

[00:03:31] So it speaks to logic that our top goal should be to understand what those scopes of activities are. Even though many of you were probably, you know, brought up in a sales organization where the definition of prospecting is far more limiting than my version. 

[00:03:51] What are some other things that people can do activity-wise prospecting? They can cold call. They can hit this speaking. They can go knock on doors back in the day. I don't even know if that's still a thing you can use podcasting and the guest funnel to create relationships with people that you want to engage in a selling motion with. There's a shit ton of ways, right? It is not, it's not this limited window of like, let me send some emails and some LinkedIn DMS and fingers crossed, throw some shit against the wall. Right? You got a lots of options. Cliche here is that if you're a hammer, then everything looks like a nail, probably a conversation for a different day. Anywho, you got a ton of options, something to keep in mind.

Your Time and Your Energy

[00:04:40] Amy: Now why is this important? Okay. So now think about it in the frame, like. Right. Our most precious non-renewable resource that each and every one of us has is your time and your energy

[00:04:59] and the evil, maybe a little biased. However, the way that you choose to spend your time and your energy. Is really one of the most important decisions that you can possibly make. And I'll take it a step further for those of you that have listened to the show for a while now know that I fall into one of the neurodivergent categories, right?

[00:05:23] ADHD. My brain is just wired differently and also I've got some hypersensitivity going on as well. And so for me, I have been for very long time, really focused on my energy. And how much energy does a certain activity require. And the results, obviously that I'm getting from it. And so I have been looking at this 80 20 distribution, right? What are the actions that I'm taking? And then what are the results that I'm getting? And my job, as I saw it, was to make smart decisions. To identify what those 20 percenters are. Activity-wise action wise, for two reasons, one, so that I can. Do more of them. Do a lot more of them. Right. But also, so I could stop doing the things that don't work.

[00:06:14] That's the gist friends. When we are able to break down the function of prospecting right into certain categories and then apply it through this filter, your life just gets better as a seller. 

Get More Granular with Your Lead Lists

[00:06:29] Amy: I'm assuming here, friends that we're doing a decent job at getting more granular with our lead lists. Right? So we're applying more richer content.

[00:06:41] Into the list that we're developing. So let's say if you're calling on sales leaders, for example, and your first list is a list of teams that have doubled in size over the past year. And then the other list is people that have hired, you know, I don't know, a new marketing director. And then you can run your test. Also known as an AB test around your responses. And you can see which one of these campaigns are bringing you better results. And so regardless of where the scope of your role ends, right? If you're just doing the handoff and then you're, you're onto the next, or if you're actually carrying the sales through, you can start to apply this principle throughout.

[00:07:24] And for me, It was life-changing. It was life-changing. Because I was then able to make really smart decisions with my time. But I was only able to do this because I understood the inputs. I understood the building blocks that went into the different factors for the list that I was creating. And then again, You know, track those results at a very granular level.

[00:07:48] Start small. Start with just like who responds to the first email and then kind of go from there. 

[00:07:56] All right. All that is the 80 20 rule. My absolute favorite thing to teach sellers. Think about this one. Think about how you can incorporate. More intention into the decisions around what you're choosing to do, right.

[00:08:14] And the results that you're getting. And there is absolutely no need to overcomplicate this. Like you could track these numbers, you could do hash marks on a bar Knapp for all I care. Um, you could do it. Excel or a Google sheet. For anybody that's interested in this concept. Are there two things I would point you at. Episode Three: Dae Kang Cracks the SDR Talent Code. This is a young man that I mentored in and we went deep into this process. Which yielded him a 300% up tick in his results in like a very short period of time, like under a month and a half. So that's that episode. And then we go into it on a 5 on Friday episode; Tips For an SDR Just Getting Started in Tech Sales.

[00:08:59] Both of those will be linked in the show notes friends. I made me Rahab check. This is the revenue real hotline. If you learned anything, if you appreciate what we're talking about over here. Tell a friend, do a post about the show. But definitely follow us wherever you listen to your podcasts so that you'll be notified each time a new episode drops.

[00:09:19] This is the Revenue Real Hotline. I'm Amy Hrehovcik. Truth, love and joy and happy selling.

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Amy Hrehovcik

Host of Revenue Real Hotline Podcast