How To Use The Pareto Principle (80/20 Rule) To Increase Your Success

Mon, Aug 9, 2010

Home Business, Personal Growth

 

Conceptual sign of sucess in business and lifeNetwork 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. :roll:  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! 8-O  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! :lol:

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.

Here’s some statistics in 2010:

 

Jeff Clement – .224 Batting Average (2.24 out of 10),
Annual Salary: $405,000
Shane Victorino – .279 Batting Average (2.79 out of
10), Annual Salary: $5,000,000
Derek Jeter – .315 Batting Average (3.15 out of 10),
Annual Salary: $22,000,000

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! 8-O

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. :lol:

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! :-P

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:

YouTube Preview Image

We hope you learned something new from our article today.  May we ask you to share by clicking the “f share” button at the top of the article, or “retweet” this post on Twitter?  And we would love to hear your comments at the end of the article.

Also, if you’d like to learn tips and secrets I’ve used in the past 15 years, sign up for our video series below.

Sending you a lot of “Aloha” (love) & “Mahalo” (thank you) for being a part of our “Ohana” (family)!

:-D



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25 Comments For This Post

  1. Val Wilcox Says:

    Kellie,
    I’m so glad you shared this. I know we talked about it a bit before, yet this article lays it out so well. It is all balance and flow. You have implemented many techniques that have served you well in your business.

    All you need to say is yes, I’ve been there and this does work because I did it. Best testimonial there is! :)

    Val :)
    Val Wilcox�´s last blog post ..The Unexamined Life is Not Worth LivingMy Profile

    [Reply]

    Kellie Hosaka Reply:

    Aloha Val,

    I’m so happy you are glad! :) Mahalo (thank you) for your wonderful comments. I am glad you felt it was layed out well and flowed. My objective is to always make things simple, so everyone feels they can do it too.
    I so appreciate you and your words Val! You are truly a treasure!

    Much love & gratitude,
    Kellie :)

    [Reply]

  2. Kay Wilson Says:

    Thank you so much for sharing. We all need to really understand the 80/20 rules. It makes our lives so much easier! :o) Kay

    [Reply]

  3. Kellie Hosaka Says:

    Thanks Kay! Glad it assisted you today! So nice to see you again! Aloha :)

    [Reply]

  4. Lilith Nix Says:

    Hi there Kellie! Thanks so much for the great article on the 80/20 principle. It’s one of my favorite topics. If I could master my understanding of this concept, I feel strongly that I could reach my goals quicker. I enjoyed the lovely videos of you and Brian Tracy, too.

    [Reply]

  5. Kellie Hosaka Says:

    You are very welcome Lilith! I am so glad you enjoyed our article! Yes, the 80/20 Rule, is so crucial and simple once it is accepted. Aloha :)

    [Reply]

  6. Jaden Daniels Says:

    You are so right. When I first started network marketing, I failed miserably. My mentor told me I would 20 “no’s” to one yes. I jumped from company to company…putting the blame on the company instead of myself.
    In reality, I am still working on my “Winning Edge”.
    The example in the video will give me something to practice.

    Jaden
    Jaden DanielsÃ�´s last blog post ..Addictions…You Can Overcome ThemMy Profile

    [Reply]

    Kellie Hosaka Reply:

    Aloha Jaden,
    So nice to see you here on our blog! Thank you so much for your comments! Aloha :)

    [Reply]

  7. Kaye Flack Says:

    Kellie , this is an inspiring post, amazing value and its so true when you understand how the 80/20 rule operates , it really does give you that winning edge. Thank you so much for sharing
    Kaye
    Kaye Flack�´s last blog post ..Two Heads Are Better Than One Part 2My Profile

    [Reply]

  8. Kellie Hosaka Says:

    Aloha Kaye,
    You are very welcome! Thank you so much for your comments. Aloha :)

    [Reply]

  9. Ken Pickard Says:

    Kellie,

    Yes the 80/20 is alive and well. There’s another saying I heard growing up in the network marketing industry and that’s “Some will some won’t so what… next” that helped me to stop chasing people who I thought would or should do this. But even if someone did join there’s still a high percentage of people that wont get started.

    This used to bother me as well, until I figured how to attract them with personality and leadership. So I figured I could NOW help more others right… wrong. I was still just getting started. I just moved myself from an 80% to a 20%.

    Helping others move from 80 to 20 starts with you. Thanks for sharing an insightful post.

    Ken Pickard
    The Network Dad
    Ken Pickard�´s last blog post ..Are You Asking The Right QuestionsMy Profile

    [Reply]

    Kellie Hosaka Reply:

    You are so funny Ken! You’re just such a nice guy, you want to save the world! I know cause that’s how I felt too! The funny thing is, not everyone wants to be saved and certainly not necessarily be me!…Duh! Took me so long to figure that out!
    Thank you so much for your comments! I like your style. Aloha :)

    [Reply]

  10. Melissa McCloud Says:

    thanks kellie–there is so much power in the numbers. my mentor taught me early on that it doesn’t matter what my batting average is… it matters that i KNOW what it is so that i may work backwards and understand what i need to be doing on a daily basis to get the result i am looking for.
    and it’s important to explain this to the newbies: most people are in the 80% and they won’t want what we’ve got!
    Melissa McCloud�´s last blog post ..Riddle Me ThisMy Profile

    [Reply]

    Kellie Hosaka Reply:

    Oh yes, you got it Melissa! The key is knowing your batting average, then you can accomplish anything! Thank you so much for your comments. Aloha :)

    [Reply]

  11. Tinei Says:

    Hey Kellie!
    Mahalo for this post. You explain it so well how it’s all in the numbers! I tell you, your blogs really help me out. Keep doing your thing <3 Fa'afetai :)

    [Reply]

    Kellie Hosaka Reply:

    Great Tinei! I am so happy you got it! Awe, and I am so glad our posts are helping you. Please feel free to post them on your FB page and use them to train your team too! Aloha :)

    [Reply]

  12. Jacqueline Gates Says:

    I love how you just ‘decided’ to talk to thousands of people ~ most people who hear of the 80/20 rule give up before they start because the odds are ‘stacked against them’.

    You are an inspiration, Kellie, and I look forward to, and learn something in every single post.

    Bliss-ings and thanks,
    the goddess known as Jacqui
    Jacqueline GatesÃ�´s last blog post ..My 7 “I’d Really Rather you Didn’ts” – Facebook editionMy Profile

    [Reply]

    Kellie Hosaka Reply:

    Awe thank you Jacqui! You are too kind. I really didn’t know any better back then. It’s so funny today, cause I really thought I had it good because compared to the ones who went before me…LOL. It’s like when my Grandmother used to talk about washing clothes on those wash boards, I felt so fortunate to use a washing machine!! Funny huh? Thank you so much! I really appreciate you! Aloha :)

    [Reply]

  13. Donna Merrill Says:

    Thanks so much for this post Kellie!
    I knew that rule, but needed the reassurance by hearing it again. They way you explained it was awesome! It all comes down to us. We are the ones that have to apply ourselves.
    Discouragement: That comes from all the No’s….but keeping in mind this rule makes me feel like Jeter! Even though I am a Met Fan. Tee Hee

    Hugs, Donna
    Donna MerrillÃ�´s last blog post ..My Secret Dream… RevealedMy Profile

    [Reply]

    Kellie Hosaka Reply:

    You’re so funny Donna! Mets fan :( LOL! See what happens when you have 2 great teams! In Hawaii, we don’t have any, so we choose the Yankees…heehee :) You gotta love Jeter though, everyone does…
    I am so glad you enjoyed our post Donna and I am so happy it assisted you today. So nice to see you my friend! Aloha :)

    [Reply]

  14. Kim Jensen Says:

    Very encouraging post! A great reminder to never give up nor take anything personally. There is wisdom in the practice of becoming indifferent to circumstance and in detaching oneself from the outcome. Thank you Kellie. Your new friend, Kim Jensen
    Kim JensenÃ�´s last blog post ..Deciding- Kickin’ the ‘Buts’My Profile

    [Reply]

    Kellie Hosaka Reply:

    Wonderful to see you here Kim and nice to meet you! What I found after a while was that it wasn’t that the other person was rejecting me, it was that someone else was suppose to assist them instead. Now, after 15 years, I see that the ones who are meant to be assisted by me come on their own. Aloha :)

    [Reply]

  15. Kevin Says:

    80/20 was mentioned to me at the beginning of my journey. It is tough and you learn how to change your talk. If it is from your heart the odds may improve.

    [Reply]

    Kellie Hosaka Reply:

    Aloha Kevin,
    Oh yes, believe me, people will listen if you are truly caring about them. The heart sends out the strongest energy wave out there. Thanks for stopping by. Aloha :)

    [Reply]

  16. Richard Goutal Says:

    I love the reference to ball players missing 7-8 throws out of 10 and getting such insane salaries. YET, they persist to practice and improve. It’s easy enough to advise my grandsonto stop falling on the grass with despair when he misses one out of one pitches. Now, how easily do I give up?
    Richard Goutal�´s last blog post ..My Big NICHE MistakeMy Profile

    [Reply]

    Kellie Hosaka Reply:

    Thank you Richard! So nice to meet you here on our blog. I am so happy you enjoyed the baseball analogy. We love baseball in our house and I saw the similarities to our home business. I thought it was very cool! Thanks again :)

    [Reply]

  17. Kara Grabenhorst Says:

    Hey Kellie, what a great article on the 80/20 rule. Understanding this principal makes it possible to adjust our numbers to achieve whatever we want and to assist others to do the same. It really is all in the numbers. Thanks for sharing this concept!

    ~Kara
    Kara GrabenhorstÃ�´s last blog post ..Work At Home …Why Would You Do ThatMy Profile

    [Reply]

    Kellie Hosaka Reply:

    Hey Kara,
    So nice to see your smiling face again! Thank you for your comments and for visiting. It’s pretty simple once you understand the concept huh? Aloha :)
    Kellie Hosaka�´s last blog post ..How To Use The Pareto Principle 80-20 Rule To Increase Your SuccessMy Profile

    [Reply]

  18. Lisa Arnold Says:

    Thanks for the insightful blog post Kellie! I’ve been working on the 80/20 rule and using tips from your other blog post: http://kelliehosaka.com/time-management-tips-for-the-home-business-owner/ Thanks for helping me become a better home based business owner!!
    : ) Lisa

    [Reply]

    Kellie Hosaka Reply:

    Aloha Lisa,
    Thank you for your kind comments. I am so happy you are utilizing our blog to understand your home business. It’s really not that difficult if you take it one step and a time and master one thing at a time. You are so skillful and talented you will have no problem. Your children are so fortunate to have a FT mom running her business at home! Aloha :)

    [Reply]

  19. Krista Abbott Says:

    Kellie,
    This is great information. I have studied the Pareto principle and yes it works in many areas of life. The Winning Edge, through positive mindset practices is a key to the success of any individual looking to have success in their life. Thank you for sharing your story…100 people per day. Wow! No wonder you are a huge success my friend! :-)
    Take Care,
    Krista
    Krista AbbottÃ�´s last blog post ..How To Define Success For “Your” LifeMy Profile

    [Reply]

  20. Kellie Hosaka Says:

    Aloha Krista,
    Thank you for your comments! Yeah, when I started, I already knew I wasn’t the smartest, I had absolutely no skills for a business, and it cost $.25/minute to talk on the phone, so I wasn’t going to waste any money! That’s why my rather naive plan and asking no questions, just doing what I was told, cause it cost too much money to ask questions back in 1995, actually saved me from myself! I just did what I was told and I knew I had to do a ton more numbers than the average guy! Funny huh? It worked though..heehee :) Aloha :)

    [Reply]

  21. Leslie Denning Says:

    I love this — it’s a good thing to keep in mind when you come up against a wall. Just keep chipping away with that teaspoon!

    Aloha,

    Leslie
    Leslie Denning�´s last blog post ..Choosing a Keyboard Instrument for Your Young Child- Part 6My Profile

    [Reply]

    Kellie Hosaka Reply:

    Aloha Leslie,
    Yes, so nice to see you here on our blog! Yes, just keep on going and know that the 80/20 rule always works out. Aloha :)
    Kellie Hosaka�´s last blog post ..Do You Know That Slowing Down Can Speed Up Your ResultsMy Profile

    [Reply]

  22. Fitness Family Says:

    One thing I’ve learned from internet marketing is that the more traffic you have, the better chances of selling more (which is the same Pareto Principle), so I’ve been working in having my site search engine optimized eversince. Valuable tip to have in mind while growing your business.
    Fitness Family�´s last blog post ..Mom Tips On Repelling Mosquitoes Using Essential OilsMy Profile

    [Reply]

    Kellie Hosaka Reply:

    Aloha Cherrie,
    Yes, everything in life really works that way. I am glad you are mastering your craft Cherrie and your children are so fortunate to have you there with them! Aloha :)
    Kellie Hosaka�´s last blog post ..Do You Know That Slowing Down Can Speed Up Your ResultsMy Profile

    [Reply]

  23. Faith Barnard Says:

    Kellie,

    Fabulous post. The difference in the numbers is staggering. The 21 million plus is mind blowing when just upping your game, get just a bit better has huge payoffs.

    Your post inspired me today. Thank you!

    Faith
    Faith Barnard�´s last blog post ..Wow- the Secret of Becoming a Sponsoring Machine is Easier than You ThinkMy Profile

    [Reply]

  24. Kellie Hosaka Says:

    Aloha Faith,
    Thank you for your comments! It is mind blowing isn’t it? I am glad you were inspired today Faith! Aloha :)
    Kellie Hosaka�´s last blog post ..Are You Stuck In A Rut And Ready To Get OutMy Profile

    [Reply]

  25. jaccie Says:

    Hello yet again Kellie,

    Well this article is more closer in my memory than the other 2 that i just read. I dont recall the phrase Pareto Principle in our meetings, but everything else in the article was reminiscent of our STS trainings. Im still trying to come up with a way to watch the videos because well, Im obviously missing vital information.

    Thanks again Kellie,

    Jaccie Freeman

    [Reply]

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