Network Marketing Business & The 80/20 Rule
Have you heard of the Pareto Principle or the 80/20 rule? It was named after the Italian economist Vilfredo Pareto, who in 1906, observed that 80% of the land in Italy was owned by 20% of the population. Once I understood the 80/20 rule and accepted this principle for many things in our lives, I found it very simple to obtain specific results.
When I started my home based network marketing business, I was working my job 14 hrs/day, and I had to find time to put in 20 hrs/week into my new business. I learned time management skills right away because I didn’t have any spare time to do my new business. (click on the time management link to see the article) Then when I first started to make phone calls, I didn’t understand that 8 out of 10 people who I talked to would not be interested in what I had to say. 🙄 I thought I was doing terrible until my mentor told me about the 80/20 Rule! He said “Kellie, on the average, only 2 out of 10 will be interested in taking a look at what you have to offer.” That means 8 will say “no”. Then he said “only 2 out of 10 who say they are interested will actually purchase”. Again, that meant 8 out of 10 people who appeared interested, and spent time on the phone with me, won’t buy anything from me! Wow! 😯 You see, I had never did any kind of sales or phone work in my life, so I was shocked to find out that these averages were Normal!! Actually, I was relieved! 😆
The 80/20 Rule and Baseball
I went and studied the Pareto Principle and discovered that it worked for everything in life! Let’s look at baseball, since my son and my husband just love the New York Yankees, and we have gone to many games in New York. When I started to learn the game, I was once again seeing the 80/20 Rule being proven. 20% of the Major League Baseball (MLB) players make 80% of the payroll and the difference in the salaries are enormous! In baseball, if you hit 2 out of 10 times at bat, you will probably become a professional baseball player. That means you can miss 8 out 10 times and you would still be a pro, however, if you hit the ball 2.5 times out of 10 (5 out of 20), you will be paid much more; and if you hit the ball just 3 out of 10 (which means you miss 7 times), you are now one of the highest paid players in the MLB.
Isn’t that mind-boggling? The difference between hitting 22 out of 100 times at bat verses hitting 27 times is $4,595,000! That’s only 5 more hits and you still miss 73 times at bat!! But look at this, if you hit 31 times out of the 100 times at bat, now the difference in salary is $21,595,000! That’s 54 times more money! 😯
My Naive, But Successful Conclusion
When I understood the Pareto Principle, I asked my mentor if I could talk to 20 people per day, then I would have 4 people interested. He said “Kellie, you can talk to as many people as you want”. So I figured out my strategy, I would talk to 100 people per day and I would do it 7 days per week instead of 5! The more people I talked to, the more people would be interested, the more people would be interested, the more people would purchase. It seemed simple to me, it just took practice like any skill or game you want to master. And I remembered that 80/20 Rule, so I didn’t get discouraged, and after a while, I started batting 300 like Derek Jeter! It was very cool! It did take talking to thousands of people, but I now knew how the game was played. 😆
Many Things In Life Follow This Principle
When I accepted this principle in my life, everything looked doable! I remember Jim Rohn used to say something like “when you have your own planet, you can change the rules, until then, these are the rules here on planet earth.” His wisdom is so profound! 😛
One of my first authors I studied was Brian Tracy who says 80% of success is how you feel about yourself. Here’s a video where he explains this:
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