Marketing

Maximising the impact of the 80/20 principle

Posted on September 3, 2013 by Steve Livingston Smart working 0

I’ve been enjoying a good book by Google Adwords legend Perry Marshall on applying the 80/20 principle to sales and marketing: 80/20 Sales and Marketing

Like Perry, I found that Richard Koch’s seminal book The 80/20 Principle: The Secret of Achieving More with Less had a huge impact on me and the way in which I viewed business and, in all honesty, the world in general. After immersing yourself in this book you start to see 80/20 patterns all around.

In essence, the theory holds – with frightening consistency – that 20% of inputs have 80% of results.

In fact, the only noticeable criticism of the 80/20 principle is that it appears to be moving closer to 90/10!

So a handful of customers or clients might make up 80% of profits or worse, a handful of customers might cause 80% of the headaches!

Seeking out the vital few in every situation can have huge benefits particularly in relation to our most precious resource – time.

What makes Perry Marshall’s interpretation extra useful is how he drills down into the fractal nature of the 80/20 principle. So 20% of your clients might make up 80% of your profits but you can drill down further – in this case, 20% of your top 20% of customers will make up 80% of the 80% of profits. Drilling down repeatedly helps us to seek out the vital few.

Also, look out for the Power Curve in terms of how to maximise pricing opportunities. I won’t spoil this but the book is well worth the investment and it provides links to an online tool for testing the Power Curve. I would recommend Richard Koch’s book as a primer if you haven’t already read it.

I am currently reading Think Inside The Box: Discover the exceptional business inside your organization
which looks at useful and interesting ways of applying the 80/20 principle within organisations. A good recommendation from the 80/20 man himself, Richard Koch.

Differentiate or die!

Posted on February 8, 2010 by Steve Livingston Monday Focus 0

Monday Focus:

Aim for “Gravity Marketing” – this involves pulling prospects toward you rather than pushing on (closed) doors
Have regular events planned throughout the year – this helps reinforce the perception in the marketplace that you are active and busy doing (ideally cool!) stuff
Differentiate or die!

Show 002 – The F-Word, Twitter and Sweet Mandarin with Lisa Tse

Posted on February 3, 2010 by Steve Livingston Podcasts 0

I am delighted to introduce Manchester-based entrepreneur, Lisa Tse of The Sweet Mandarin, as an inspirational guest for this week’s BusinessN2K podcast.

Lisa is famed more recently for her appearance on Gordon Ramsey‘s The F-Word, in which her family-run restaurant Sweet Mandarin won the prestigious Best Local Chinese Restaurant in the UK. Aside from the wonderful cooking, Lisa and her sisters have broken new ground in mixing new marketing techniques to help build a traditional yet thriving business. Her forward thinking approach to business and creativity has led to her role as an alumni of Manchester Metropolitan University Business School and she is in high demand to speak at business conferences throughout the North West and beyond.

I first ‘met’ Lisa on Twitter after being bowled over by how much she ‘gets’ social media – TweetUps and all! Her business has continued to thrive as they have steadily built their community of enthusiastic customers. Lisa has a refreshing outlook on business, having worked as a financier in London (a ‘corporate job’) and made the leap to running her own entrepreneurial business. She is focused on making every experience the best for her customers in order to build the restaurant and leave a legacy – rather than focusing on building a chain of restaurants which could result in growth for growth’s sake.

In this conversation we cover:

What inspired Lisa to make the leap from the safety of a corporate job to running her own business with her sisters
How she has embraced social media such as Twitter to help build her business
The importance of staying close to your roots and understanding what contributes to your success
Being open to new ideas and suggestions from customers to create new services
The value of looking after your customers and how they can turn into some of your best marketeers
Innovative ways of taking customer orders!
Staying focused on what you are good at and not getting distracted by new trends etc
Finding new ways to connect with your customers
(unfortunately we ran out of time to discuss their Sweet Mandarin book !)

The Sweet Mandarin represents a new breed of entrepreneurial business that is closely intertwined with its customers. Lisa and her sisters are the ‘face’ of the business and they actively engage with their customers and the wider Manchester business community. They manage to mix more traditional and established business (restaurateurs) with new (social media, community engaged, transparent, forward thinking).

I firmly believe that we can all learn as businesses from Lisa, her sisters and Sweet Mandarin.

How you can listen to BusinessN2K:

Subscribe by clicking on the Subscribe to Podcast icon in the side bar or subscribe via iTunes. This is the best way to listen as it will ensure that all future episodes are delivered directly to you as new episodes are released, or
Click on the Blubrry player below to listen now:

Please leave your comments, feedback and suggestions for future shows in the comments section below.

Credits: Thanks to Lisa Tse for this week’s show + music used in the BusinessN2K podcast is by Viba – In the Orchard lies a Secret – available as a free download and is released under a Creative Commons Licence

Why being a middle of the road business is a BIG mistake

Posted on January 31, 2010 by Steve Livingston Strategic Thinking 0

It seems reasonable to assume that targeting your business at the middle is a safe bet. After all, the middle comprises the majority of customers. Right?

Perhaps – but there is a nasty sting in the tail for the unwary…

The middle is big. Very BIG. The middle provides the most choice for customers. The middle is the most competitive. The middle is the noisiest. The middle makes it harder for you to appear bespoke – you are trying to serve too many in the middle. The middle is where the high street and big internet brands hunt (and they have deeper pockets than you). The middle ignores the genius of the 80/20 rule.

Those in the middle normally struggle. The middle is tough. The middle is the hardest work. The middle needs a lot of marketing (and therefore cash). Those in the middle have to struggle in good times and bad.

Many business owners spot this and set off on the right path i.e top or bottom but a little farther down the line they can’t seem to help themselves from gravitating towards the middle. They lose their nerve. Particularly in especially good or bad economic times (like now). But why?

Despite the recent recession, many prestige businesses continue to do well. This is because the world is still full of very wealthy individuals who can ride this dip out quite comfortably – and want somewhere to shop or service their needs in the meantime. My local Selfridges in Manchester still looked pretty packed over the recent Christmas rush, particularly around the new Tiffany concession store.

Meanwhile, businesses that had raised their sights during the recent good times will be wishing they had stayed as bargain-basement £1 shops. But it may be too late. Those that held their nerve have first-mover-advantage and will deservedly reap the rewards – our local 50p shop is busier than ever (for obvious reasons) but it didn’t start being a 50p shop in the last 12 months. It stayed as a 50p shop when there was plenty of cash credit swishing around over the past 10 years. It never lost its focus. It never lost its nerve. It never became middle. It deserves to win.

Being middle is a mistake. Aim high or aim low. Either way, hold your nerve and never ever be middle.

Picture credit: Paul Watson

Show #001 – Juggle! ReThink Work, Reclaim your Life

Posted on January 27, 2010 by Steve Livingston Podcasts 0

I’m delighted to kick off our podcast series with a fascinating chat with Ian Sanders of The Ian Sanders Company on his latest book Juggle! Rethink Work, Reclaim your Life

Ian Sanders is an entrepreneur, ideas guy, marketing bloke, business potentialiser, unplan evangelist, specialist in creative industries and author!

You can either listen to the podcast from your computer now or you can subscribe to listen to this and future episodes on your ipod, smart phone or mp3 player at your convenience – all for free.

In our 20 minute chat, topics covered with Ian include:

Ian’s life as a Juggler
introducing ‘plurality’ into our work and lives
avoiding being defined by our job title
how employees can also embrace the Juggle lifestyle to be more entrepreneurial
how the introduction of a reduced (often 4 day) work week during the recession could benefit both employers and employees over the longer term
rethinking the notion of retirement by reframing work
challenge of ‘switching off’ given the ‘always on’ 24 hr nature of technology tools
key lessons from Kevin Roberts (global CEO of Saatchi & Saatchi) on balancing work and life
importance of being passionate about what you do – “play where you play best”
effectively managing your 24 hours per day

You can find this book at Amazon and you can find more from Ian Sanders at his website, plus regular updates on Ian’s latest thinking on his blog and on Twitter.

How you can listen to BusinessN2K:

Subscribe by clicking on the Subscribe to Podcast icon in the side bar or subscribe via iTunes. This is the best way to listen as it will ensure that all future episodes are delivered directly to you as new episodes are released, or
Click on the Blubrry player below to listen now:

Please leave your comments, feedback and suggestions for future shows in the comments section below.

Credits: Thanks to Ian Sanders for this week’s show + music used in the BusinessN2K podcast is by Viba – In the Orchard lies a Secret – available as a free download and is released under a Creative Commons Licence