What Is The 80/20 Rule?

By March 16, 2018 Blog 3, Productivity

It’s hard enough for the average person to keep worry and stress in check. Add to it the challenges of working as a commissioned salesperson or small business owner, and it’s no wonder we tend to feel like we’re losing control every once in a while!

We all know that stress doesn’t help. Unfortunately, when we get crazed over everything, we end up losing the mental, physical, and emotional ability to focus on what’s really important. And that just leads to even more stress.

As professionals who work on commission (and don’t get paid until it’s all said and done,) it’s difficult not to get sucked into irrelevant and unimportant issues. That’s where the 80/20 rule comes into play.

What is the 80/20 Rule?

The 80/20 rule, originally discovered and named by Italian economist, Vilfredo Pareto, is a very interesting concept which can be used to address stress and help us shift our focus to what matters. I’ve taken the liberty of now referring to “Pareto’s Principle” as “The Vital Few” vs. “The Trivial Many.”

It states that 80% of our results and outcomes are generated by 20%, “The Vital Few” of our activities and efforts. In other words, only 20% of the work we put in generates 80% of our rewards.

How Does The 80/20 Rule Apply To Me?

As realtors or small business owners, there are only four activities that should be in your “Vital 20.”

  1. Lead Generation (prospecting for business): This is arguably the most important activity, and the one that people hate the most. However, if you aren’t lead generating, you don’t have any prospects, which means you don’t have any business.
  2. Lead Follow-Up (appointment-setting time): Following up with prospects with the intention of setting appointments reveals a prospect’s motivation and willingness to take action. This helps determine whether they are viable or a waste of your time.
  3. Buyer/Seller Appointments: These important appointments ultimately lead to #4, which is
  4. Negotiating Contracts

Obviously, there is so much more that goes into completing our job than these four steps. This is where you need to start asking for help. Delegate tasks to other employees, or hire someone else to complete them. What matters is that you focus on your Vital 20%.

This week, I challenge you to stop, observe what you’re doing, and ask yourself, “Is my focus right now on my Vital 20%, or on the Trivial 80%?” You’ll be amazed at the changes you’ll see by making this simple shift in focus!

 

 

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