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It’s probably the best-known and most-repeated rule in sales: 80% of your sales come from 20% of your customers. The implication is that you should focus the majority of your sales efforts on those 20% to maximise your returns.

But it’s also the most misunderstood and misused rule in sales. Slavishly following the 80:20 rule could cause you big, big problems.

Does the 80:20 rule actually work in the real world?

Well, the answer is “usually”. There are many industries where sales do follow some sort of 80:20 or 60:15 or other uneven split. But there are also industries where it doesn’t – where the spread of sales is pretty even across customers. So it’s absolutely crucial that you know the numbers in your industry and don’t end up putting all your eggs in the wrong basket.

The second, more important question is: “OK, there is an 80:20 split in my business – but does it persist over time?”. In other words – are the 20% of customers who make up 80% of your business going to be the same today as next year?

The answer to this question is very often “no”. And that means that if you focus on this year’s big customers assuming they will be next years, you could get into big trouble. Many sectors operate like this. They make a large number of purchases one year, but then nothing for the next few years (for example, they may buy upgrade PCs for the whole company, or refit their office). In this case, your focus should not be on this year’s big customers as the 80:20 rule would tell you to do, but on who is going to grow into next year’s big customers.

You need to look at your historical sales and check the persistence of the 20% – is it pretty much the same companies year-on-year, or is it mostly different companies? Use this information to tell you whether you can focus just on your current big customers or whether you need to identify next years potential biggies and focus on them.

One final question: “Even if you know who your 20% is going to be – should you focus all your efforts on them?”

Mostly the answer is “yes” – but there are exceptions. Sometimes you can already be investing the optimum time and effort into a client, and putting more investment in won’t produce any higher returns. If you do face-to-face sales calls, for example, will doubling the number of calls really double the sales? Or will the customer being to feel pressured and over-sold? In contrast, are there some customers who are not in your top 20%, but who are being visited so infrequently, and who have enough potential, that an extra visit or investment will produce a big increase in sales?

The secret here is to look beyond the simple application of 80:20 and to understand: * Does the rule actually apply in practice to my business? * Is it persistent – or will this year’s top 20% be different to next year’s? * Will extra focus help? Or are my top customers already getting enough attention?

Now clearly, I’m not saying the 80:20 rule doesn’t work. It does in very many cases. But applying it over-simplistically can cause big problems. Conversely, if you think it through and look beyond simple solutions, you can get great results.

Ian Brodie works with the leaders and staff of professional service firms to help them find clients and win new business. He provides coaching and training to help firms improve their Professional Services Marketing.

If you write a book, chances are you want it to be successful in order that you are able to continue writing for a living. When you just start out, it may be difficult to be able to afford public relations services to promote your book. So how do you get your work known on little-to-no budget?

Some authors have realized there is a great need for information about writing books. They have therefore, cleverly, written books about how to advertise the book you have written. The tips in the books may or may not be useful, but what IS useful is how you have learned about their book in the first place. Make your own web page and fan site. No one needs to know that you do not have dedicated fans doing this for you. Write a blog. Make a funny video and put it on YouTube. Advertise on your social networking sites. Make your technology (especially free technology!) work for you.

If you are a small town author, it is all the better. Living in a big city gives you access to the biggest publishers and agents, but writing a book there is no great news for anyone. In a small town you are far more likely to be noticed. The newspaper will want to interview you, the local news station will do a story on you, book stores may want you in for a book signing. Take advantage of every single one of these opportunities, because they will not come around again.

You want to give just enough information about the book to make people interested. Do not talk too much about it or give anything away. Be a professional and think about the business of you. Every story or interview is just like a job interview. Do not say anything off-color or make stupid jokes. You do not want to risk alienating a single person. Make sure you are well spoken but do not try to sound ‘too smart’ and risk sounding like an idiot when no one has any clue about what you are talking about. Not everyone knows critical theory or the Laconian or Derrida point of view. Keep it simple and entertaining.

Be professional, be courteous, be humble, and make your audience wonder a little. Remember that if you are in a rural area, people will say, “I remember that person from high school!” or “That’s So-and-So’s child!” They will want to see what you have accomplished because there is a definite history there.

Promote yourself as much as you can without becoming irritating. Do television commercials and put up posters. Making deals with local businesses can be a great business move. You just want your book to get out there, even if you are not making much money on it yet. It takes a while for books to pass from hand to hand and for viral advertising to happen.

Discover additional important strategy on how to use book marketing principles to Discover lots of publicity. Experience the tremendous fun and success of a professional media campaign that focuses on promoting books. You can reach your goals when you know the correct strategy to use.

In 2008 and 2009 the global credit crunch hit mid-market companies hard making it hard even for healthy mid-market companies, especially in the US and Canada, to keep or secure financing for their businesses during this period of significant change. During this credit crunch we have found that mid-market organizations are struggling more than smaller companies or larger companies.

‘Mid-market companies must master complexity.” This is the finding from a study on mid-market organizations by IBM in February 2009. The complexity arises because these mid-market companies have thin management teams who have to cover issues on a wide front plus cope with more uncertainty than companies that are smaller or larger. As a result everything is important to the management of the mid-sized company and change can come from any direction.

We find the biggest challenge to rapid change is bringing together the information you need in one place at one time with the key people so you can decide what are the most important issues to focus on. A study by Deloitte Consulting in 2006 of 350 private companies in Canada found that most leaders thought the top three strategies that would increase the value of their companies were: increasing the volume of business; improving the quality of their management team; and product innovation. In times of significant change, especially adverse change it is often very difficult for mid-market organizations to make progress in these three areas. In contrast we have found that in tough times the strategies that are often more effective include: reformatting the pricing/product and service offerings; improving asset utilization; and decreasing overhead costs to ensuring the survival of the business. However these strategies require more planning and detailed costing information than is readily available in many mid-market organizations.

Gridlock is a common situation in Mid-market companies. It is often easier for the managers to do nothing than deal with conflict amongst shareholders or leaders on key issues. In the good times, doing nothing can work well. The delay means more time to gather information and in some cases the challenges go away on their own, or someone else solves the problem for the leadership. However gridlock is fatal for a mid-market company in the tough times. They have to change to survive. So the leadership of a mid-market business has to constantly address what will change and the associated timing and consequences.

In tough times only the leadership can make the tough choices and these choices have major consequences. The leaders of mid-market companies find they are making decisions that can mean survival or death for the business. The toughest issue to understand is that not making a choice leads to failure of the business and yet making a choice is not a guarantee of survival but just another leap of faith. While the leader would like to take cover from the storm, the challenge is to help the leader to see the benefits of making changes to ‘dance in the rain’ rather than ducking for cover.

Significant changes can be triggered by the general state of the economy or a melt down in an industry sector but often the worst situation is when a key customer suddenly stops buying from the mid-market company. In these circumstances the business often runs out of time to get things back on track plus the business often runs out of money just as things seem to be getting better.

The reason stakeholders support a leader of a business is because they believe the leader has a vision of where to take the business and that vision is going to be profitable for all concerned. However as soon as a leader is lost and does not know where to take the business, the risk is the leader starts to lose interest in the business. The other extreme is the leader is so focused on the short term they don’t know if it is time for the business to change direction. For either of these situations the leader should get help to set a new direction or step aside so someone else with vision can lead the business. However many leaders of mid-market organizations do not have strong governance models to remove them and their ego is such they do not want to step aside.

The failure rate amongst mid-market companies is very high during the tough times unless the leader is willing to recognize they are in unfamiliar territory and seek help to cope with a work load that often more than doubles during these times.

Stuart Morley MBA is a recognised expert in advising mid-sizedcompanies during their rebuilding phase. Go to his website Rebuilding Middle Market Companies for more information including video clips, articles specifically for mid-sizedmarket organizations and order his recently co-authored book (with Gord Griffiths and Morris Slemko) called “Weather the Storm” Survival Guide for Mid Market Organizations.