80-20 Rule for Marketing with Examples (2019)
The 80-20 rule dictates that 20 percent of your efforts will produce about 80 percent of the results you’re looking for. Likewise, it dictates that 20 percent of your clients (the result of your marketing) will generally produce 80 percent of your total sales. In this blog, we explain how to use the 80-20 Rule for Marketing with examples in 2019.
When you’re able to continually measure what you’re doing and how much you’re spending versus the number of leads and/or sales you’re generating as a result, you’re able to then shift your efforts for maximum effectiveness as you go. Your business is assuredly going to grow in the process.
Do this right and business growth is practically unavoidable.
Today, there are two basic ways people will find you on the Internet. The first is because someone already has the address to your website. Usually, someone who has your web address or URL already knows you. They’re either an existing customer or they might have gotten your business card or a brochure, or flyer somewhere.
The second way people find you on the Internet is through search engines or, perhaps, through social media.
If they do find you this way, however, they aren’t necessarily looking specifically for you – they’re usually looking for something that solves a problem they’re having and they do this by typing in words related to the problem.
These people are typically ready to make a buying decision and you want them to find you when they type in these keywords – not someone else. After you’ve determined precisely what keywords apply best to what you have to offer, here’s what you need, to make that visitor decide to buy from you:
The information on your web pages must be set up properly and optimized for search.
Other, more important sites must link to your site.
There’s still more to it – but, when you get just these two elements right, you can get preferred placement in the search engines for important keywords related to your business.
If a lot of people are searching for your products and services and you’re optimized for search engines on the keywords they’re using, you can get visitors coming to your site in growing numbers.
If your website is properly optimized for users, so they can easily make a small “introductory” purchase, or opt-in to your email list – or take some other important next step that leads to more sales for your business – you can do very well.
If your site gets visitors, but they’re unsure of what to do, they’ll leave and visit a different site. Usually within seconds. Remember how many websites there are on the Internet today?
Believe it or not, Google can and often will penalize you if your bounce rate (the number of people who visit your site from their search results, but “bounce” back away from it quickly) is too high.
This can affect your SEO with the lower placement of your listing. It can also make your PPC campaigns more expensive because Google often also charges you a higher per-click rate if your bounce rate is too high.
If your website isn’t bringing you the new business and growth you were hoping for, you now know just a few of the reasons why.
Account for your conversion rate
What if you found that, for whatever reason, the traffic you get from search engines converts (opts-in to download something, completes a form, buys something, etc.) at a rate of just under two percent?
Then, what if you find out that traffic from sharing information about your good work on your social network converts at a rate of three to four percent?
Right now, roughly six percent of those who arrive at my site convert by joining that list.
Here’s the interesting thing: of those who convert on my site, LinkedIn traffic out-performs search traffic four-to-one. Looking at my opt-ins for just one month, 74% came from LinkedIn traffic and only 18.5% came from search. Roughly 80% from one source.
The 80/20 Rule is a rule for a reason.
If these were your numbers, where would you focus your attention?
You’ll find out the effectiveness of your marketing by measuring where your traffic’s coming from and how many of them are converting in the way you want them to.
What about social media?
Business owners frequently tell me they’ve heard social media’s a great choice for marketing because it’s free. Much like SEO, which a lot of people also tend to think is free, social media has a very real cost – either in the time you invest in it or in the size of the check you’ll write to have someone do it for you.
Some of the costs you can expect include designing a branded look for your social pages and the time needed to research, share content, and engage with people online, to make it work.
Yes – branding still matters – and that’s largely what social media is all about. It’s just that it should never be the end goal of your marketing.
With social media, it’s also very important to have your “ear to the ground” in related forums and pages, so you understand what problems, frustrations, or issues prospective customers have that you may be able to solve with your products and services. This can be more time-consuming than you might think.
If you’re already busy, it’s easy to put this task off. This is probably the main reason why most do-it-yourself business social media efforts fail to ever get any traction and generate meaningful leads.
You’ll either do your business’ social media yourself or you’ll hire someone to do the work for you. That’s up to you – but always remember your time is very valuable.
How you value your time is a matter only you can decide. Usually, it’s too valuable for my clients to give up and devote the attention required to properly maintain a social media presence that gets results.
Certainly, if you hire someone skilled in listening on the social networks and doing all the things required to get your business found on the social web, you should expect to pay a reasonable rate for having it done. Either way – again – meaningful, productive social media work for your business won’t be free.
Once again – the best form of marketing and advertising for your business will be the one that produces the best overall ROI. Carefully track your results. Apply the 80-20 rule as you go, to make the necessary adjustments to maximize the ROI on your investment, and it won’t matter what the actual amount of that investment is.
You will eventually, however, want to ramp up what you spend.
Sifting and sorting
When you take a slipshod, shotgun approach to your marketing, attracting the most desirable customers is a nearly unattainable goal. With a targeted direct marketing approach, however, the majority of customers you attract to your business can be that ideal customer. You just have to identify the ideal target and fire those arrows at the bullseye.
That’s all very good. But – what if you’ve already got a list of customers? Are you now left to find out which of them is your ideal, after they’ve exhibited some of the most undesirable traits to identify themselves?
Once you’ve done this, diligently apply the trusty 80-20 Rule to your data. Go line-by-line through the list you just assembled and identify the products or services that – either by revenue or by units of sale – are in the top 20%. You’ll find your list of best customers among those buying the top 20% most profitable products or services you sell.
Once you’ve identified a list of your most profitable customers, go through it again. This time, remove any from the list who you already know, from personal experience, created the biggest problems – or those who consistently nickel-and-dimed you at every step.
They might make you money – but it’s never worth the effort or aggravation, in the end. Move them over to the “less-than-desirable” list.
The more of this type of data you collect, the more precise you can be here. Worst-case, identify 20% of your most profitable customers. Start from there, if that’s all you can do. Then, track the results on all future customers going forward.
Here’s where the fun (and maybe some pain, too) comes into the exercise:
For those who are your best, most ideal clients and customers, write down how you attracted them to your business.
Ask yourself – which campaign did they respond to? If you keep copies of every campaign you’ve run in the past year or two, get them out so you can review them. This will help you identify your most effective message when it comes to attracting your ideal customer or client.
If all your customers are glommed together into a single list, with no indication of who buys what – you have a bit more work to do. In this case, you should at least pick out those you know are more trouble than they’ve been worth.
Next, do some targeted direct marketing to the rest of the list, offering something that will appeal only to your ideal customers. This can help you identify some more ideal prospects to work with more often when they raise their hands.
This exercise will give you clarity about many things and help you map out future promotions and offers you can use to build your business. It won’t be long before you find you’re only working with the best-of-the-best customers, enjoying your work more, and making more money in the process.
Direct response = measurable response.
Like I said – as with any investment, you can and should expect a return on your investment. The 80-20 Rule can easily be applied to your direct marketing efforts, to help you achieve that return, once and for all.
Because you’ll be able to easily see the results of everything you do quickly enough to make necessary changes that keep you on the track to greater profits – much faster than any other method I know of.
In short, you’ll be able to maximize the profitable return you deserve from your marketing dollars. Predictably. Digging in…
I always pay careful attention to what’s going on in the world of SEO. You can probably tell, from the way I opened our discussion in this blog, that I’m particularly tuned in to the nonsense a lot of so-called SEO “experts” are trying to sell to my clients.
Probably the most annoying of these schemes, as far as I’m concerned, are the ones who come in guns blazing, claiming they’ll get you on page one of Google.
You’d think this is some kind of Holy Grail of SEO, guaranteed to net you a huge return for your money, to hear them tell it. While being at the top position of Google for the right keywords can certainly bring you some business, I hope you haven’t fallen for this nonsense pitch.
There are a lot of businesses today who “own” the number one spot on Google for a lot of keywords – but most still aren’t seeing the kind of increase in their business and sales they should for the effort. Far from it.
The process you need to follow is a little more complex than simply occupying a certain position on a Google search page. When you follow the right steps, applying the 80-20 Rule to help clarify and quantify your best approach, however, you’ll see the results you were hoping for almost without fail.
Making pay-per-click pay
I like pay-per-click (PPC) advertising. A lot. It’s highly measurable and trackable – and it can provide some of the highest ROI of any type of advertising you’ll ever do. However, if you don’t do it properly, it can and often does fail to deliver any worthwhile results at all.
The most common mistake businesses make that leads to PPC failure is directing the traffic generated from PPC ads to a generic page, such as the company website’s homepage.
The person who clicks a PPC ad was looking for something very specific. If they click on your ad – which is when you incur a charge for your advertising (hence the name, pay-per-click) – and they arrive at a page that’s not related specifically to that ad, they’ll hit their “back” button and leave, usually about two-three seconds after they arrived. Yeah. That quick.
The secret to getting exceptional returns on your PPC advertising investment is to use specific “landing pages” that match the information in each of your ads and deliver on the promise you made to get viewers to click in the first place.
If you promise free information about your product or service in your PPC ad – an informative free report, for example – and I click through to your site and find the same info on the landing page I see, you have an excellent chance of converting me into a lead. Nice, huh?
A lot of business owners I talk to are enthralled with PPC advertising. Usually, it’s because they’ve heard stories circulating about businesses who turned a $250 ad budget into tens of thousands of dollars in return. It’s the proper use of landing pages in PPC advertising that leads to these reports.
You can find advertising and marketing successes and failures with every type of media that exists today. The best form of advertising for you, however, is the one that produces the highest quantity of ideal clients for your small business at the lowest cost.
In football, winning and losing comes down to the fundamentals: blocking and tackling, as well as running and passing the ball. Winning or losing in business comes down to proficiency in two simple fundamentals: Getting and keeping customers in a measurable way.
If you can measure it, you can make it pay.
When you understand that traffic is traffic and your real objective is to get customers who spend money with you, it will all come down to the return on investment you’re getting on the different sources of traffic.
You’ll only know the ROI when you calculate the lifetime value of the customers you’re getting and compare it to what you spent to attract them. Applying the 80-20 Rule to your numbers will help clarify where to place your efforts for maximum ROI.
I decided to write this blog about generating online leads because I’ve found that online leads are returning the best ROI for most of the clients I work with on a daily basis.
Some clients get a better ROI on search. Others do better when they focus on social media traffic. Others I work with do very well with pay-per-click traffic. Some do better still with a combination of all of them.
At the end of the day, if you don’t know which form of traffic produces the best flow of customers, then all you can do is spend money on marketing and hope for the best.
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Nailing Down the Ideal Client
I see a disturbing trend in business. It’s the philosophy of “you’ll do.”
Almost every business owner I know is looking for new customers. In spite of whatever the economy or any number of other factors might be, the need entrepreneurs have to improve their results never changes. Still, their client attraction process is rarely as tight as it could or should be.
As a result, someone calls, clicks, or otherwise inquires about our products and services and all we really care to know is if they have the ability to pay. If their answer is “Yes,” we tend to reply, “You’ll do.”
There aren’t as many of these ideal clients as there are of the “you’ll do” variety. Remember – 20% of your clients produce 80% of your results, but that 20 % is also more profitable, lower-maintenance and, working only with them, you’ll also find you have a better quality of life.
The same goes for the service providers you choose –, especially in the online marketing world. Today, it seems as if you play on Facebook or Twitter for a few hours a day, you can market yourself as a “social media expert.” Many do.
Likewise, if you read a blog or attend a Webinar or two on SEO, you can now market yourself as an “SEO expert.” Many do this, too.
But, if you want your site to be a useful tool, one that generates leads and helps you grow your sales to those type of customers you really want most, you need to choose who you work with to get the work done wisely.
You need to make a choice based on ROI – not on cost. You simply must identify your ideal clients. It’s the only way you can reliably focus your marketing efforts to find your ideal customers where they reside.
It’s so important, I’ve only just begun hammering you on the forehead with reminders. Allow me to continue hammering home the point:
Some people and businesses make ideal clients – and some don’t.
Truthfully, in the case I just related to you, I was trying to make a square peg fit into a round hole. I was pushing a bit to make that happen when she “went off.”
Prospects give off clues with their body language. It’s been said that 90+% of communication is non-verbal, but I ignored the clues and made my goal more important than hers. She sensed that and forcefully shut the conversation down.
Sorting out your prospects first is better, easier, and more effective than trying to sell everyone. There are some who are interested in what you’re offering. Others won’t be. It’s possible that, while you’re trying to sell to the one who isn’t interested, you’re missing an opportunity to sell to someone who is.
Imagine the impact it would have on your life if your business served only ideal clients/customers on an almost exclusive basis. Do they understand that your business – like every other – needs to be able to provide value while still making a profit? Or, are they more inclined to grind you for every last nickel in the deal?
Beware the unbelievable bargain
This isn’t all that difficult, but it most certainly can require a bit of time and effort. Putting together the various pages for the keywords and optimizing those pages can also be a considerable amount of work.
The effort’s very worthwhile – but you might not have much choice in the matter. After all – chances are good you already have your hands full running your business.
It’s tempting to hire some outside help with this. If you don’t feel you’re up to the task, I recommend you do. However, watch out for deals that are obviously too good to be true.
As you know by now – this kind of stuff makes me cringe whenever I hear it!
Business owners often hear legendary tales of SEO success – it seems everyone knows the name of the game is to be found at the top of the listings in Google. As I already pointed out earlier, even being found on the first page of Google for a search isn’t enough – unless you’ve taken some important first steps.
1. If you’re found on page one of Google for keywords no one is searching for, you’ll get zero traffic to your site.
2. If you’re found on page one of Google for important keywords, but you aren’t in the top three spots, the amount of resulting traffic you get will be small.
Over 70% of people searching online for something will click on one of the top three listings. The next 20% of searches are divided among those listed numbers four through ten. This isn’t too great for you if you’re number eight.
You also need to understand that it’s Google who decides who shows up where, based on the search engine’s proprietary formula for ranking websites. As I’m writing this, they were reportedly measuring over 200 different elements when making that decision.
I’m explaining this so you’ll understand – someone who has the skills to manually work on your website’s pages and improve them until they’re at the top of the results can’t possibly do what you need for a price that’s too low.
Much of this takes some time to map out and implement. $97 for a number one ranking – or even to show up on page one – is simply…really – too good to be true.
For now – get into “method acting mode.” Become your very best premium customer, looking for a solution to that person’s unique problems. Get the right keywords sorted out and you’ll be armed and ready to launch an SEO or a PPC campaign with a reasonable expectation of success.
We’ll go deeper into what you need to put those keywords to work building up some traffic with SEO. First, I feel it’s important that you see how the research you’ve done so far can pay off quickly with PPC.
You now know the true power behind finding your perfect niche. Match this to your USP, armed with a profile of your perfect customer, and you can start lining out keywords for an SEO or PPC campaign designed to deliver new prospective clients and customers to your door.
You also know why SEO isn’t about being “number one,” and you know how to spot an apparent “bargain” that really isn’t one, should you run into it during the process.
PPC Landing Page Concepts
I’ve already talked about the importance of attracting ideal customers or clients while simultaneously repelling those who aren’t ideal for your business. I’ve also gone over developing an “avatar” of an ideal client and I explained how this exercise will make you much more effective in your marketing.
I’ve taken you through this process to show you the importance of studying your best clients and truly understanding what specifically makes them ideal. This is a vital exercise when it comes to determining the best search terms on which to rank with your SEO.
It’s life-or-death when you start paying for PPC traffic. However – it’s equally important that you pay attention to who your less-than-ideal clients are, so you can develop an approach that helps fend them off as you attract your ideal.
You need to do this because less-than-ideal clients can make your life more miserable than you might ever imagine. They generally haggle over your going rates and will tend to nickel-and-dime you to death on every billing – or they consistently demand more attention than other clients for the money they do pay. Or both.
Consider what these less-than-ideal clients are really looking for, as opposed to those you’d most like to attract. There are subtle differences and, sometimes, you’ll need to climb into both ways of thinking to ferret them out.
For example, if you focus only on low prices or discount offers, you’ll find you tend to attract clients and customers focused on price as the main benefit they’re seeking. These are rarely the easiest customers to work with.
Likewise, discount offers and sales, while they can help boost sales in the short term, will also tend to bring you clientele focused primarily on price, unless you offer those discounts or sales after having already firmly established the real-world value of what you offer.
These won’t be your ideal customers, either. Bargain-seekers don’t usually appreciate the value of what you offer and will make your life less than desirable in the process.
It’s easy to fall into this trap as you plan out your PPC campaign and the landing page you’ll send that traffic to visit.
You want to encourage visitors to take action fast and the tendency is to “make them an offer they can’t refuse.” Sadly, you’ll also often wind up attracting clientele you wish you had refused if you don’t take the right approach with the offer you make here.
You might be faced with competition bragging about lower prices and selling the same or similar products or services as you do.
Surprisingly, in this case, if you focus instead on the higher quality of your service after the sale, the higher quality of what you sell, or other benefits of buying from you, you’ll find you can even charge more than your competitors and attract a better grade of the customer when you do.
Keep these considerations in mind as you plan your PPC landing page. You’ll then attract the type of clients you dream of having – people you most enjoy working with, who appreciate you for the added value you bring to the table and reward you with their repeat business and referrals to like-minded new clients and customers. You’ll enjoy what you do more and your life will be much better as a result.
Now you’re in the right mindset, ready to put together the different web pages you’ll need to make your PPC campaigns generate an excellent ROI for your dollar.
When you take all that ideal client “stuff” and bake it into the words on these PPC landing pages – when it’s clear to visitors that you’re selective in who you work with – them, ideally, you’ll get more of the kind of customers you prefer and less of those you don’t.
You’ll also kill a lot less of the sales you most want to make.
First things first – when someone clicks on your ad, what page/website are you going to send them to visit?
You might have spent a ton of money on a slick-looking, informative website.
You might, for this reason, feel this would be the perfect place to send you
AdWords traffic and draw in customers.
I agree this sounds reasonable enough – in theory. Unfortunately, it’s actually the wrong approach.
Believe it or not, you’re far more likely to lose clients if you’re routing all your ad traffic to your main website!
Please re-read the above paragraph. Out loud. Then highlight it and read it again in a day or so, so you never ever forget that thought again.
You must send AdWords traffic to a landing page specifically designed to match up with the ad that sent people there. Yes – it needs to be one of those single-page, simple, easy-to-read landing pages that invite the prospect to take action now.
The simplest of these pages include only a paragraph or two of text below an eye-catching headline. Both lead directly from the specific ad that brought the visitor to that page.
There’s also usually an opt in-form or a link to a form or some other call to action on the page – and usually an arrow or other eye-catching graphic pointing to the action element.
It’s direct marketing, pure and simple. It must be. These landing pages get the person who clicked on your ad involved right away, so they contact you before they get distracted by anything else.
If your traffic from your AdWords campaign is being routed to your main website, you run a constant risk of visitors getting distracted by all the different sections on your site.
They’re likely to take no action at all. Even if they wind up really liking your page and bookmark it to read in-depth later, they didn’t pick up the phone. They didn’t fill out a contact form. They aren’t a lead for new business and might never be.
You just lost a potential client. And you paid for the “privilege” of doing so.
If the landing page is written properly and the call to action is compelling and clear enough, however, you’ll get people converting. They’ll call you and come into your business. They’ll take the action you wanted them to take. In other words, you’ll start generating leads.
I’m frequently asked, “Why to create a landing page, if I already have a website?”
The #1 trap Google has placed in the path of their customers/advertisers is how they handle processing the traffic they send them. There’s a concept widely talked about by the people who advertise on Google. It’s known as Google’s “stupidity tax.”
This stems from:
the keywords you’re using and
how you process the traffic they send you
If you do a poor job at keyword selection – if your keywords are already broad, for example, or if you don’t include negative keywords – you’ll pay a fortune in advertising costs for traffic that will rarely, if ever, buy from you. So, you want to first get the right keywords, format them properly and then send them to a landing page.
The reason for the landing page? The person who clicked on your ad was searching for something very specific. You want to keep them, so you need to match precisely what they were searching for on that page.
This allows us to focus the mind of the consumer around the unique client proposition and call to action you want them to take while they’re there.
If you send them to your home page and the visitor has to figure out where they can find the info they were just looking for, they’d rather simply back out and go elsewhere.
By using a landing page, we can focus on them and keep them right on the topic they were interested in, enabling them to make the decision to inquire/take action.
Once you have your keywords – including negative keywords – selected and formatted properly, and your landing page is set up, you’re going to see an increasing and steady amount of AdWords traffic visiting the page.
It’s pretty amazing, actually. Kind of like a spigot – you can open it up and get as much traffic as you want/need or are willing to pay for whenever you want, simply by turning your campaign “on” or “off.” Ideally, it can pay for itself, so you can simply continue to reinvest and keep it rolling.
A good example is an attorney-client I’m working with. I showed him how, over the last three months, he’d spent about $2,500 in ads. What he got in return was a combination of lead forms and phone calls through a tracking phone number we set up. He got a total of 30 leads.
His response to that was, “If I sell two of those 30, I’m profitable.”
Get this – the typical number, in his case, is to sell one in three. If his “typical” numbers hold – and the proper keyword targeting and landing page setup will help make that happen – he’d sell 10 of those 30 leads! This AdWords campaign can be massively profitable for him.
His only response was, “How can we expand and do more?”
The answer is equally straightforward: he now only needs to increase his budget to get more business. The light was on. He was responding to the fact that, if an investment of $2,500 will get 30 chances to close new clients, we just need to spend more and get more.
More leads. Increased sales. Higher profits
Apply the 80/20 Rule to each step in the process, and to the results of the process as a whole, and the potential for growth in your business will quickly become unstoppable… controlled only by your willingness to do more. Now that we’re here – my challenge to you today is this:
Look at your calendar for the last week and figure out how much of your prime working hours were spent in selling situations with qualified prospects who can buy the products or services you offer.
If you’re not at the 80% mark yet, don’t worry – at least you’ll know where you are now. That means you can improve and you know how much improvement is needed before you’re there.
You’re already in a far better situation than most business owners. For example, I recently chatted with a business leader who’s current marketing services provider is just beaming because he’s now getting more than a dozen keywords ranked on page one of Google. The problem is, the combined number of searches per month for all of those keywords is (wait for the drum roll).
Meanwhile, my clients often average two-three new leads per day.
This can only happen when your business is ranked properly for the keywords your ideal client is using, to find solutions to the problems they have that you can solve. More important, this “visibility” creates traffic to your website and those visitors convert into leads at a measurable rate.
To track your progress with everything I’ve shown you so far, the 80-20 Rule is the key. Focus in on your keywords and the traffic you’re attracting. Track your resulting leads (conversions) and sales (the whole reason we’re doing all this).
Look for the 20% of your keywords producing 80% of your results. They will be there. Drop the under-performers and test new ones. The same goes for your PPC ads. And your customers.
So – I’ve gone through the entire process I follow for maximum lead generation online. I’ve shown you all the steps involved and how to carry them out.
I’ve also shown you how to apply the 80/20 Rule to all of this, to stay on track and continually maximize your results.
Next, we’ll look at where you need to focus the bulk of your attention, to keep the leads coming into the foreseeable future. We’ll also take a glance at what we can expect in the world of online lead generation as we move into the future.
Direct marketing makes all the difference in making online lead generation the powerful business builder it can be. You also now know how all of this is measurable throughout the process, utilizing the 80-20 Rule, to keep a laser focus on your course as you move along.
This makes you capable of quick small adjustments that keep you on track to growing returns, just as a pilot stays on course with tiny adjustments to the entire flight path, to reach a destination.