Research

In Small Business Selling, the Rule Isn’t 80/20 – It’s 98/2

Christopher Tuttle

Though published back in 2002, author John Warrilow’s book Drilling For Gold presents a fascinating take on the tried and true (some might say cliché) “80/20” rule of sales and marketing—namely, that when it comes to small business selling, the rule should closer to 98/2.

Using a chart that breaks down accounts and prospects into a series of “buckets,” he demonstrates a process for evaluating the current profit levels of customers and prospects, and each account’s potential growth.

smb-eval-chart

While Warrilow states that good qualitative research should back up the basic “Profit/Potential” profile, generally speaking the trick is to expend the highest levels of time, energy, and money not with the top 20 percent, but the top 2 percent of clients and prospects—the ones who are currently highly profitable, and have a high potential to remain so.

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