"What Do You Want To Sell More Of?"

Most industries and businesses are seeing an uptick in sales, but are certainly not at a "robust" point in business growth. Business management is seeking ways to maintain the current momentum and many focus on customer acquisition to keep the sales going.

Though customer acquisition should always be part of the marketing mix, businesses need to be reminded that the largest sales growth is always accomplished through existing customers.

The Pareto Principle -- also known as the 80-20 Rule states that, for many events, including sales increases, roughly 80% of the effects come from 20% of the causes.

Italian Economist Vilfredo Pareto first made this observation in connection with population and wealth of Italy's land where 80% was owned by 20% of the population. He then conducted surveys on a variety of other countries and found to his surprise that a similar distribution applied.

With few exceptions, the 80-20 Rule applies to business in the following manner:
-- 80% of your profits come from 20% of your customers
-- 80% of your complaints come from 20% of your customers
-- 80% of your profits come from 20% of the time you spend
-- 80% of your sales come from 20% of your products
-- 80% of your sales are made by 20% of your sales staff

In a slow-growth economy, it may be more important to focus on your existing customer base versus investing heavily in customer acquisition. "Share of Customer" is vital according to the 80-20 Rule, and truly defines the difference between a sales plan and a marketing plan. Basic market plan components including brand development, product and price position, and efficient distribution strategies all should point to the satisfaction and increased business of your current customers.

Finally, there is a little known effect that the 80-20 Rule creates in business...as you increase "Share of Customer" and current customer satisfaction the "20 percent" obviously grows in terms of sales. But in addition, you will find the remaining "80 percent" of your sales mix increasing proportionally. This is due to brand position and direct or indirect endorsement of your products or services from existing customers.

In short -- focus on the "20" and the "80" will follow -- a great strategy in a slow-growth economy.