In this episode, we apply the Pareto Principle to the concepts of sales and marketing.
Perry Marshall, bestselling author of 80/20 Sales and Marketing: The Definitive Guide to Working Less and Making More, joins me on this episode.
Perry wishes he had had the 80/20 book when he got into sales after being laid off. There was so much he didn’t know. He got fired after two years. He got another job in direct marketing, and it started to click for him.
Vilfredo Pareto figured out 20% of the people had 80% of the money. In sales, 20% of customers provide 80% of the sales. 20% of salespeople make 80% of sales. There’s always another 80/20 inside. It’s universal, and not only about money.
80/20 is a law of nature, because of positive feedback. Perry spells it out by examples. Past behavior reinforces future behavior.
Perry tells how 10 salespeople start off on an even keel, but through positive feedback, one gets way ahead of the others. Some get negative reinforcement, and drift off course. Within a few months the top salesman sells 16 times more.
Perry talks about a rock being eroded into the Grand Canyon. When erosion starts, you are on the way to a canyon. Inequalities multiply and compound. People try to equalize things. The best salesmen seek to amplify the inequalities.
Perry lists five power disqualifiers. Apply each of these disqualifiers to contacts before asking for an appointment. You will learn which contacts are not leads. Sales starts with, “Well, who do I not pitch?” It’s a disqualifying process.
Perry’s friend John hiked to Las Vegas at 17 to become a professional gambler. He met Rob, who taught him ‘racking the shotgun,’ to divide the ‘marks’ from the people paying attention. In sales, separate the prospects using natural law.
Perry found that everything in his business matched an 80/20 pattern. You can use it predictively. Perry explains how, with 1,000 Starbucks customers as an example.
Use the 80/20 rule to escape being in the 80%. Perry talks about sales styles. He calls his first boss a hostage negotiator. Others tell stories. Perry invented the Marketing DNA Test to help salespeople find their successful sales style.
Align the way you sell with customers who buy the way you sell, and products that match your sales style. Perry says you can’t be a consultative seller as a cold caller. Find a role that matches your strengths.
Perry writes books rather than cold calling. For him, cold calling would be a $10/hour job. Why do that when he can have the $1,000/hour job?
The Sales Enablement Podcast with Andy Paul was formerly Accelerate! with Andy Paul.