4 Takeaways from Perry Marshall’s 80/20 Sales and Marketing
I might be the last person on Earth, but I did it.
I finally read Perry Marshall’s 80/20 Sales and Marketing.
I know I’m last because when I was adding my review (five stars) in Goodreads, I saw a bunch of reviews (mostly five stars) from years ago by friends and people I follow.
So yea, a little late to the party.
But, as soon as I finished reading and jotting notes, I knew I’d read one of those books that would actually help me grow my business.
I bet right now you’re expecting me to launch into the stuff that every other review of this book talks about. You know the “7 Cardinal Rules of 80/20 Selling” the “5 Power Disqualifies” and, of course, the “Power Triangle.” It looks like this:
These are mentioned a lot because they are important (don’t worry I took notes on each of them).
But, as I read, a few things jumped out at me that resonated from other books and posts too and reinforced the ideas.
I love when that happens.
Here are my three big takeaways.
Embrace the Pareto Principle
The Pareto Principle is named after an Italian engineer, sociologist, and economist who lived in the late 1800s. Vilfredo Pareto developed this principle (also known as the 80/20 rule) after years of study.
Basically, it shows that 80% of the effects comes from 20% of the causes.
This does not mean it has to be a perfect 80–20 distribution. You might find that 10% of your blog posts drive 90% of your traffic, for example.
Taylor Pearson illustrates this in his post: How to Get Lucky: Focus on the Fat Tails.
In it, he talks about during the marketing of his book, The End of Jobs (another great read), he spent 50% of his marketing efforts on 1% of his readers (approximately 200 people). He spent time personally crafting and sending emails to each of the people he estimated were his most excited and dedicated fans.
There’s the 80/20 rule right there.
But it can go even deeper. The rule is fractal. So you can 80/20 the 80/20 (meta, right?) and get even more concentrated.
One of the two hundred people happened to have a friend who had a large community of people interested in business books.
He introduced us and his friend ended up emailing his community about the book, which drove it to #1 in Amazon’s business and money section.
Another of those two hundred people forwarded the book to a much larger “influencer” in my space, who ended up reading the book, inviting me on his podcast, and giving me a blurb.
Those two emails probably accounted for over half of my book’s sales.
So in this instance, it was the 1% of the 1% who, Taylor estimates, drove the majority of his book sales.
They don’t call it a power rule for nothing.
Two people can be responsible for a massive amount of sales. One new connection can drive huge traffic. Three customers can buy every single thing you create.
Thinking about the 80/20 has helped me remove a lot of crap from my business and focus on what (and who) matters.
Always Add More Value
Hand in hand with the 80/20 rule is what Perry Marshall calls “racking the shotgun.”
This means when you ask people to do something, you want to pay attention to the people who do it.
These are the people you sell to. Everyone else doesn’t matter.
I think all too often, and I’ve fallen into this trap, we focus on everyone who isn’t paying attention.
We desperately wave our hands around to get them to come over and look at us hoping that maybe, possibly, they might buy something, versus looking at the list of people we’ve got and figuring out how we can give them more.
You can see it illustrated in the 80/20 Power Curve. Again, this ties back to the fractals.
If 20% of my mailing list paid me $500 for a product or service (yay) then x% will give me $1,000, and $2,500, and yup someone will even give me $5,000. Assuming, of course, I deliver on the value.
It’s all about the fractals, baby.
Here’s where the value comes into play.
Rather than continuously spending my efforts getting more people to go from spending $0 to $500 with me, what I should be doing is creating “endlessly irresistible offers” that applies to the 20% of my mailing list who have already given me money.
100% of that 20% will not want to spend more. But some of them will and a few of them will spend a lot more. So I should create a killer $1,000 product, and then an amazing $2,500 product and so on.
This feels a bit like backwards thinking since we’re often told to focus on the people who aren’t buying and convince them. That shouldn’t be completely discounted, but I love the idea of offering more to the people who are already giving me money and are happy with my services.
I think creating value is a good principle to follow with readers and clients anyway, but seeing the numbers behind it and how much you could get by focusing on the tail end really opened my eyes.
Fall in Love With Mastery
The Japanese have a word called kaizen. It means continuous improvement.
Although the application was traditionally created for business, it’s actually perfect for personal growth as well.
In simplest terms, you can think about getting 1% better every single day.
Thomas Oppong delves into it more in his post The Kaizen Approach to Achieving Your Biggest Goal (The Philosophy of Constant Improvement).
The Kaizen approach is a reminder that all improvements must be maintained if we wish to secure consistent gains. Think of the smallest step you can take every day that would move you incrementally towards your goal.
Becoming 1% better everyday is a simple, practical way to achieve big goals. 1% seems like a small amount. Yes, it is. It’s tiny. It’s easy. It’s doable. And it’s applicable to most things you want to do or accomplish.
Perry Marshall advises to use the kaizen approach to mastering one to three specific tasks, and here’s the important part, that you’re already pretty good at.
I have made the mistake of devoting a lot of time in my life trying to improve things I’m not good at versus going all in on the handful of things that come naturally to me.
While I shudder to think of the time spent chasing a few pipe dreams, the idea of being good at a few complementary skills really hit home when I read Scott Adams book How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life.
He calls this “The Success Formula” and talks about being really good at two or three complementary skills makes you better off than being world class at one.
I’m sure, like much of everything Scott Adams says, this is up for debate, but for my purposes, I tend to agree.
I think for what I’m trying to do in building my business and getting clients I’m far better off focusing on being really good at things like writing, psychology, and funnels versus only one of them.
I can devote super human amounts of time to one, or just enough to three and still see the results I’m hoping for.
And, anything you’re not good at? Outsource, as we’ll see below.
Stop Wasting Your Time on $10 an Hour Tasks
Whew, this one was a bit hard to read.
Remember, 80/20 doesn’t just apply to sales, it also applies to effort too.
Focusing on the right marketing tasks, the 20% that actually drive sales and traffic is where you want to live.
Most of us live down the block, unfortunately.
Perry Marshall illustrates this by asking you to break down your day. The fact of the matter is, we only have a few hours a day for really focused work. The rest of it is spent living life, tasks, food, sleep, etc.
So how you spend those few hours counts. Here’s the 80/20 popping up again.
In the book, he breaks down a bunch of common tasks and then assigns a per hour dollar value to them, starting at $10 per hour and up to $10,00 per hour.
You can guess where you should be.
I am guilty of spending a lot of time on $10 an hour tasks.
This is stuff that we all do because it’s easy and it feels like we’re being productive and doing something. The vast majority of the time? We’re wasting our time.
A few of these $10 per hour tasks include:
- Running errands
- Cold calling
- Spelling perfectly (I loved this inclusion)
- Making tweaks to your website
All this stuff, you have to stop doing yourself. Outsource it, hire a PA, get rid of it and rack up those extra hours a week and give yourself a raise.
You want to move yourself up the ladder into the $100 tasks. Notice how these already ‘feel’ like actions that can make you more money:
- Talking to qualified prospects
- Following up with customers
- Sending emails to qualified prospects
Then, eventually, you can outsource these and get to the $1,000 and $10,000 per hour tasks.
These are the 20% of the actions where you’re going to see the best results things like:
- Reviewing marketing tets
- Building sales funnels
- Writing sales copy
- Creating new and better offers for current customers
- Improving your USP
- Selling to high value customers
- Public speaking
In your head, you know reading this last list is where the money is, I know it too, but I also know I’ve spent way too much time focusing on the tasks that aren’t driving the results I want.
The Power Curve applies here too. Maybe public speaking is the 1% of the 1% that lands you all the fame, fortune, and clients you could ever want. So stop spending 99% of your time playing with your website and watching YouTube videos, convincing yourself you’re being productive.
I will too.
That’s Not All…
I mean, there’s no way I’d have just three takeaways from a five star book, so that means you should go and read it yourself.
If you liked this post, you can check out my site and learn more about me. If you’ve got a book recommendation, be sure to let me know in the comments. I love reading!