Here's the thing about the 80:20 rule, explained in 2 Mins or less
We've all heard about the 80:20 rule, but I bet you haven't used it this way before....
Join me for "The Pareto Principle explained in 2 Minutes or less" and learn how to get outsized rewards in your business and life.
Transcipt:
"Hi, I'm Jake from Upper Limit Business and Mindset Coaching. Today on here's the thing about the 80:20 principle explained in two minutes or less, we're going to talk about a pretty cool Italian dude who was born in France and died in Switzerland. He got around. Let's do it Vilfredo Pareto, so the 8020 principle, he was an engineer and a bit of a polymath, did different stuff. But he was checking out some statistics and he realized that he was in his back garden, and he realized that 20% of the pea pods in his garden produced 80% of the peas, right, so 20% produced 80%. And he thought this is pretty interesting, I wonder if this applies across different stuff? And so he looked at some property distribution, and funnily enough, about 20% of the population owned 80% of the property. That's a really handy concept to understand, because it really helps us put unfair small amounts of effort into getting huge, bountiful returns right? Now, it doesn't always follow exactly 80:20. Sometimes it's 10:90. Sometimes it's 30:70. But there's two ways to use this, right? So keep that rule of thumb, the 8020 rule, right? One is in the positive. So if we think about our business, you can ask yourself a question like which 20% of products produce 80% of my profit, right? So once you've identified those, it's very easy to focus on great products that bring you in profit, promoting those ones, getting those in front of people, that's likely to bring you more money. Secondly, though, we can we can use that in the in the negative sense. And when I say that, I mean, for example, which 20% of my customers produce 80% of my problems. And you look at that, and you go, Oh, okay, you know, there's two or three customers give me 80% of my complaints and issues, and they take up a lot of time. And I don't actually make money from them. Well, once you understand that, you can go out and you can, you know, either make more money from them and have a have a conversation and say "I can't service you for this amount" or an idea I love is just say, "You know what, we're not going to continue working this way. We can part ways or we can do it the way that works for me." This has been The Pareto principle, the 80:20 principle. Here's the thing about it, explained in two minutes or less. I'm Jake from upper limit. Thank you for joining me Have a great day, onwards and upwards."
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Until then, Onward & upward, Jake