How to Use the Pareto Principle to Earn More Money
In a recent post, I made mention of how I use the Pareto Principle to determine how much money to spend on marketing.
For those who may not know, the Pareto Principle states that 80 percent of results come from 20 percent of effort. If that sounds more familiar, it’s because this principle is also referred to as the 80/20 rule.
I would say that for most of the time that I’ve been in business for myself, I didn’t follow this rule. I would hear it, but I just didn’t get it. I now know it’s because I needed to experiment a bit more and get more data.
Now that I’ve been in business for a while, I’ve begun applying this principle in multiple ways. And you know what? It does work. Here is how I’m using the Pareto Principle to earn more money.
Focusing on the coaching service that is an easier sell.
In July, I launched my first group coaching program. I earned about $10,000 in a couple of weeks. After seeing this, I realized it was an easier sell than retainer coaching.
So what does this mean? It means I’ll be focusing more of my efforts on selling the group program instead of pitching retainer so hard.
Granted, if someone is a better fit for retainer then obviously that’s what I will mention. But most of my email marketing efforts will likely be for group coaching.
Focusing on the highest grossing affiliate products and services.
Over the past year, I’ve been allocating some efforts toward increasing affiliate revenue. I now have a year of data to work with. The data is showing there are three affiliate products that perform the best.
When applying Pareto Principle, this means I should begin focusing my efforts on just those three products. I already know they perform well with my audience, therefore I should expend most of my marketing efforts there.
Focusing on the opt-ins that perform best.
I recently decided I would start going really hard with list-building. After testing several opt-ins throughout the years, I know there are three which work the best.
Again, by applying the Pareto Principle, this means I’ll be focusing most of my efforts on the three best performing opt-ins. I’ve started experimenting with this in the past week or so and my email list is increasing at a faster rate than ever.
Focusing on what brings in the most money.
On another note, my email list is also where I make the most money for coaching and info products. Which means my marketing efforts will begin to focus more on growing the list via opt-ins than sending traffic to my website.
Saying no to everything else.
Now that I’m clear on where the most results are coming from, I can use the Pareto Principle to say “No” to everything else.
I believe the biggest struggle for business owners is that we’re full of ideas and want to execute on all of them. This ends up biting us in the behind big time. By using the Pareto Principle, you can use your efforts on what will get you the maximum results.