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Pareto’s Principle

In order to drive your change, you have to know who your best customers are.  If you are not sure, just remember Pareto’s Principle, or the “80-20 Rule”, which states that 80 percent of your business comes from 20 percent of your clients.

This is as true a rule as I have ever encountered, particularly in small business, which is why so many business books continue to cite it.

I like to call my 20 percent “pie” and the 80 percent “ice cream”.  The pie is the substantial and filling part of the dessert; it supports the ice cream, which fills in the spaces.

Questions to ask your best customers (the 20 percent):

  1. What does my business mean to you and your business?
  2. Why do you come to me?
  3. What are you planning and how can I fit in?
  4. Where are your biggest needs?
  5. What are your dreams?

In order to make and keep new customers, get to know everything about the “pie” people, but work hard to maintain and keep the “ice cream” people.

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