In 1997, Richard Koch published one of the most important business books of all time. It is titled, The 80/20 Principle and explores The Pareto Principle, applying it to business. Koch shows how many of the biggest results come from the smallest effort.
The concept was furthered in 2013 when Perry Marshall released 80/20 Sales & Marketing. Marshall showed how a number of your clients will always be prepared to spend more with you than they do at present. Marshall introduced the 80/20 curve, a tool that can predict results with scary accuracy.
Not only did Marshall write the book but he also developed a tool to allow you to assess outcomes to certain activities in your business. You can find the tool at 8020curve.com.
The beauty of this tool is that it extrapolates results based on current activities. It allows you to understand what is possible in your business if you simply open your mind to the opportunities that already exist.
In the fitness industry, most businesses are busy doing what other businesses have been doing for decades. They sell training, then they provide training. Then they repeat over and over again. They miss the opportunities that are right in front of them.
Right now, in your business, you can make more money without having to generate more leads. A certain percentage of your clients already want more from you and they are prepared to pay for it.
You can offer additional products and services to your current clients. There will be buyers. Instead of going on faith, use the 80/20 Curve Tool to predict where the “invisible profit centres” are in your business.
Let’s say you own a CrossFit gym with 100 members, and you offered a nutrition seminar at $195 per person. Of your 100 members, 40 attended. Let’s plug those numbers into the tool assuming an 80/20 distribution.
This is what the curve looks like:
The pink square is the purchase population. The curve indicates what you entire client base is prepared to spend on additional purchases.
The tool predicts:
- 20 would be prepared to buy more from you at a price of $354,
- 10 would pay $643,
- 5 would pay $1,169, and
- 1 person would buy something from you for over $4,500.
This should get your brain ticking over.
What product or service can you provide at $350?
Perhaps you could create an online training program. You could expect to make 20 sales.
What about $1,100?
Perhaps you could run a retreat for $1,100 and expect five of your current members to buy.
Could you offer a $4,500 product?
Perhaps there is the desire for an in-depth, personalised coaching and mentoring package.
This is a simple example. There are other ways that you can use this tool to predict outcomes in your business. Head over and take a look. Run some numbers and see what is possible for you.
If nothing else, the 80/20 curve should introduce you to the opportunities within your business that you are not currently seeing.
Your clients want more from you and they are willing to pay for it. All you have to do is discover which client want to buy and offer them what they want. You don’t need to generate more leads. You need to service your current clients more fully.