80/20 Sales, Marketing & Business Growth
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In this interview Perry shares how we can use the 80/20 principle to earn more money by doing less. It’s not about doing more things, it’s about doing the right things. The 20% of things that truly matter and discarding the other 80%. Perry reveals…
Joey Bushnell: Hello! Welcome to the online marketing show. This is Joey Bushnell. Today’s special guest really needs no introduction at all. He’s the author and creator of many marketing books and products. His name is Perry Marshall. Go to sell8020.com to find out more. Perry, thank you so much for being on the show.
Perry Marshall: Well, thank you for reaching out and getting hold of us and scheduling this. You know, I really appreciate that you are trying to scout out the best marketing that you can find and you know hopefully we won’t disappoint you today. Appreciate it.
Joseph Bushnell: Perry, how did you get into marketing?
Perry Marshall: Well, I was recruited into the world of multi-level marketing when I was in college and it happened because I had suddenly gotten fired from 3 jobs in a row. I played this prank and somebody didn’t think it was very funny and I got fired and I had to call my father-in-law because I had just been married for a year and I’m like “Hey Ron, you wouldn’t believe what just happened…”. And I felt really ashamed of myself.
I took this other job and that didn’t work out. I was just really feeling like a total misfit and I can honestly say up to that point, I had defined success equals never flunking your class and never getting fired from a job. And, actually, the whole thing of getting fired from my job and looking for new jobs, it really messed up my summer school class I was taking, you know summer school goes really fast and if you get a week behind, you are toast, right? And I fell behind on that class and I had to dropout of the class and re-take it again which for all practical purposes, I was failing that too. I was really feeling like crap.
So then my friend recruits me into Amway. Now, I’ve talked about that in other places and I’m not going on about it. I don’t recommend that people would go become Amway distributors by any means but that was my crash course in “Hey, welcome to the world of living by your wits and getting paid for what you produced and not having a security blanket and all that”. And it was a rude awakening!
You know what you have to do in a business like that, it’s really ugly. But I learned how to do it. I never made very much money at it. In fact, I spent a lot more money than I ever made. Once I kind of had the taste of freedom, even if freedom was just having the ability to get rewarded for what you do instead of working for the man. Like, I could never be permanently happy just punching the clock.
And then, a few years later I got fired again, actually I just got laid off but my wife was 3 months pregnant and I had been working in an engineering job and I couldn’t find an engineering job so I went into sales. That was the introduction to the real sales and marketing.
Well, that was 2 years of bologna sandwiches and ramen soup. Seriously, it was a major struggle. We spiraled into debt. I got this base plus commission sales job and rarely did my commission go high enough to where I was actually getting an extra commission check so we didn’t really make enough money for us to live on, on just the base. My wife, she’s quit her job to be a full time mom which I absolutely want her to do. I didn’t want to do the day care thing. It was just gut-wrenching, it’s a hard phase of life and I think frankly a lot of people in they’re like late 20’s, early 30’s, that’s the world they live in. You’re driving a 15 year old car that burns oil and your wife hasn’t had any new clothes in like 3 years and you got the baby and the diapers and all this kind of stuff.
I worked in this job for 2 years and you know the job just wasn’t exactly the right fit. There were a lot of things about it that were pretty good actually but I couldn’t sell anything to save my life. And I’m like “What is wrong with me?”, “why can’t I do this?”. And there was just so much stuff I didn’t know.
The other thing I learned is just because people are good at stuff, doesn’t mean they know how to teach you. My bosses at this company, they were really smart and they made a lot of money. They were very good at sales. The sum combination of I didn’t know what questions to ask, maybe I wasn’t trying hard enough to ask them the questions and they’re like… “We don’t know how to fix Perry! I don’t know, he tries really hard and we like him, and he’s really earnest, there’s no lack of work ethic but why can’t he sell anything?”. And that’s how I got into sales and marketing!
Joseph Bushnell: So at some point along the way, Perry, you did get good at this. You now teach this to other people, you consult, you have products, you’ve written books on the subject and that’s where you are today.
Perry Marshall: Yeah and so here’s what happened that turned things around. So, things were getting really desperate and I was actually getting close to being fired. And I wandered into this seminar, at a big coliseum and one of the speakers was Dan Kennedy. And I remember seeing the description of his presentation and thinking “Now that looks pretty interesting” because it was about cold calling, or not having to cold call, it was about accountable response driven advertising and stuff like that. And so he definitely had my attention and then he goes into this talk and explains this whole thing about marketing and he says “Cold calling is the lowest form of grunt work invented by human beings, you should never do this unless you just absolutely have nothing else to do but like there’s 98% of the time there’s other things you can do”.
I had a credit card that wasn’t completely maxed out and I bought his thing. I went home and told my boss about it the next day, he looks at like I’m from Mars like “Dude get to work, somebody just sold you swamp land in Florida”. That was kind of the reaction. Well, I got fired from that job. Meanwhile, I’m in turmoil! What am I going to do? I am losing money, I’m not making enough, the credit cards are gonna completely max out pretty soon and I’m going to really be in trouble and I have to find a job. How am I going to find a job when the last 2 years of my sales job is really poor, like I kind of have to do smoke and mirrors to make it look like I ever managed to accomplish anything. It’s just awful.
So I take home this notebook of tapes and it’s like this badly photocopied thing, in fact the product that Dan sold looks so terrible I wondered if it was a scam. But I finally decided it wasn’t and I’m studying this and I started to reorient my thinking. And one of the things was, so direct marketing is selling in print. That’s one definition. That’s what copywriting is.
I started studying… “Here is how you put together a sales letter, here is how you put together a sales pitch. You need the right audience. You need a headline. You need an opening paragraph. You need to really agitate their itch so that they’re conscious of the pain that you’re product sells. You need to have an offer. You need to make a guarantee. You need to justify the price”. And there’s all this stuff I hadn’t been doing.
I had been going around selling this equipment, showing people interesting stuff and I was almost doing great but not quite, and all of a sudden, I can see a sales pitch on a piece of paper and it’s this linear logical process and all of a sudden I started to understand it.
I also started learning about mailing lists and all this kind of stuff and I begin, I just begin to finally understand… Who buys? What makes them buy? What are you trying to sell them? And why do they buy?
There’s another thing though that is really a big deal, especially with Amway stuff, I had been trying to be somebody I was not. Have you ever spent years of your life trying to be someone you’re not?
Joseph Bushnell: Yeah. I think everyone has at some point.
Perry Marshall: Great, I want to be like him! I want to be like her! I want to be one of them! Right? It’s like, “Yeah but you’re jamming a square peg in a round hole” and I was trying to be a classic sales guy because it’s the only thing I can see that I thought seemed to make sense. Then I started to understand “You know, you can use your writing skills, you can use your engineering degree, you can put all these stuff together in a way, for the right people, it’s actually a perfect fit”.
I guess here’s the point that I’m driving at… is that we all go through life and we go around and we try all this different stuff, OK. It’s like well, I’m going to be a lawyer. I’m going to be an accountant. I’m going to be an engineer. I’m going to be a doctor. I’m going to be this, I’m going to be that. And we try out all these things and most of the time they don’t quite fit.
Maybe what a lot of people do is they finally, they get something that fits about 75% and then they just put up with it for the rest of their life. And what I am suggesting that you can do is that you can design a world that perfectly fits you or at least fits you about 93%-98% so that you’re mostly doing things you love to do, things you’re good at, things people appreciate you for. You’re delivering the highest value to people you enjoy working with and you can feel good about and feel proud about it.
I remember one time, we went to this meeting and I was with my boss at the sales company and I introduce “Hi, I’m Perry, I’m an electrical Engineer”. And he goes “Perry is a sales guy. He’s not an electrical engineer. Sometimes he just forgets who he is”. Oh thank you very much. I really appreciate that! I was trying, when I said that, I was trying to be useful to somebody but because I knew something, and not just because I was a sales guy who knew how to knock on doors. You know that feeling?
Joseph Bushnell: Yeah.
Perry Marshall: I might as well be selling vacuum cleaners. No, I want to solve a problem. I remember having a conversation with my boss, “You know Perry, could you stop trying to solve problems and just sell something?”
Well, you know what, if you can put things together right, you will solve problems and you will sell something and you get paid really good money to do it.
So, and I did figure that out and my whole introduction to marketing and understanding what marketing really is, I think that marketing really is the art and science of helping people who need each other, find each other. That’s what I think marketing really is.
And, so, I did start to figure that out and little by little by little, I started creating a world that worked for me. And you can do that and the people listening today can do that and I hope I can give some people hope. Because if you’re just like how I was, it’s like how long is it before the credit cards max out. It’s terrifying. It’s absolutely terrifying. But there is light at the end of the tunnel. It’s not necessarily a train!
Joseph Bushnell: Yeah. So let’s talk about some of these things Perry, that ideal life that you just described sounds amazing. I’m sure that everyone listening to this would love to get there themselves. And like you said if we know how to do marketing, if we know how to grow a business, that is a vehicle that can help us to get there.
So let’s talk about some of the concepts in your books that you’ve written that can help us to do that. Last year, you released a book called 80/20 Sales & Marketing. What is the big idea behind that book?
Perry Marshall: Well, you know, that is really the book that I wished I had 20 years ago. That book would have saved me like 5 or 10 years. And, so, to try to give you an idea, I thought I understood 80/20. Most people think they understand 80/20.
I remember like 15 years ago, in a later sales job that was working pretty well, I heard about 80/20 so I printed this report and I got out my calculator and sure enough,I’m like “That’s pretty crazy! 20% of our customers is 80% of our money”. It was great. It was like OK, so, yeah, that’s good and you should work hard and you should pay your taxes, you should brush your teeth and great. I didn’t see anything else really beyond that.
Well, the real epiphany didn’t come until later, I read Richard Koch’s classic book The 80/20 Principle and all of a sudden, a comment that he made, made it snap in place. And I realized that 80/20 is everywhere. I mean it is everywhere. And it is a repeating micro-macro pattern. So, here’s what I mean by that…
If you hire 10 sales people, what you’re going to find out is 80% of your sales come from 2 of them and the other 20% of your sales come from the 8. Which means that the 2, man for man, are 16 times better at selling than the 8. Now, first of all, there’s nothing you can do to quote/unquote “fix” this. What an academically-minded person wants to do is figure out how to make them all equal. They’ll never do it. There is nothing wrong. The universe is working exactly how it’s supposed to work. The 2 are supposed to be selling for you, and the other 8 aren’t. That’s the truth. Let the universe tell you what it wants to tell you and that’s what it’s telling you.
But, let’s carry it forward when let’s say that you hire 1,000 people, well you know 800 of them aren’t going to be very good and 200 of them are. Well, if you just look at the 200, if you fire the bottom 800, and you just look at the 200 you got left and they’re all pretty good, 80/20 is still true. 40 will outsell the 200 by a wide margin. And then if we fire the bottom 160 and we only got the 40 left, 80/20 will still be true and the top 8 will sell more than the bottom 32 combined and when we look at our 8, the top 1 or 2 will outsell the bottom 6 or 7. And this just keeps going and going.
What does this mean? This means that you can get an extreme level of productivity from 1 person or 10 people. Extreme.
What do you do? You take the resources away from the stuff that is not working and you pour more in. So what do you do? You take your top 5, if you got a 1000 sales people or you got 200 sales people, you take your top 5, they all get a personal assistant, they all get a masseuse, they all get somebody to do their travel schedule. Give them a chauffeur if you have to, I don’t really care. Just get them to the appointment.
Well, this repeating 80/20 inside, every 80/20, there’s another one and another one and it keeps repeating until your down to 1 person, there’s a name for that, it’s called fractal. 80/20 is fractal. So it’s true of 7 billion people in the world, it’s also true of the 10 richest people in the world.
Now, when I recognized this, I am a little geeky and I am an engineer but when I saw this, I was like “Oh my goodness”. This is the mathematics of attraction.
Work and results are unequal. This is the math that tells you how unequal they are. If you can see it, if you can figure out where those little leverage points are, then you don’t have to bust your ass anymore. You can actually be sort of lazy and in fact you should be, and you should start saying no to things.
Let me tell you a story. My friend John Paul Mendocha is, he’s on my sales team and he helps us with a lot of stuff. When he was 17 years old, he dropped out of high school, hitched hiked to Las Vegas and became a professional gambler. Imagine a 17 year old kid living by his wits in Vegas, playing poker for a living.
Well, John, within a few weeks he’s like “dang, maybe I need a mentor”. He finds somebody. He finds this guy that runs a little gambling ring and his name was Rob and they talk for a while and Rob was like “for a percentage of your winnings, I’ll take you under my wing, I’ll teach you what I know”. So they shake on it. Jump on the jeep John, we’re going for a ride.
So they’re going for a ride, John goes “Rob, how do I win more poker games?” And Rob goes “You have to play games you can win. You have to play people that are dumber than you. And those people are called marks.” He says you always play with marks, you don’t play with other professional gamblers. And John goes “OK so how do I find the marks?”. And he goes “Here, I’ll show you”.
He pulls into a parking lot and they walk into a strip club and there’s girls dancing and there’s rock and roll and there’s people drinking and everything and Rob sits down at a table and Rob pulls a sawed-off shotgun out of his jacket and he puts it under the table and he opens the chamber and then he racks it so it goes “chi-chi”. And there’s a few people look around and like “What was that?” and the owner comes over and he goes “Hey, everything OK over here?” “Everything’s just fine, just teaching the lad a lesson. Don’t worry.” And then Rob says to John “John, did you see the people that turned around when I made that noise?” And he goes “Yeah.” And he goes “Those people are not marks. Do not play poker with them. You play with everybody else”.
Now in my little world, we call it planet Perry, we have this term, rack the shotgun. Racking shotgun is when you make a noise or you do something and there’s 50 people in the club and 10 turn their heads and 40 don’t. You just did 80/20. Now, every time you send an e-mail, you’re racking the shotgun. How many people opened it? How many people didn’t? Rack the shotgun. How many people clicked on the link? How many people didn’t? Rack the shotgun. How many people went to the webpage and did what you asked them to do? How many didn’t? Rack the shotgun. How many gave you money? How many didn’t? Rack the shotgun.
Eliminate, eliminate, eliminate, eliminate. Sales is an elimination process. It is a disqualification process. It is not a convince people process. It’s not a go talk to anybody who can fog a mirror and try to sell them something.
That’s what I learned in Amway. They literally told you that if they can fog a mirror, you should show them the plan. That is the worst advice. You know what that is designed to do? That is how you sell people tapes and books. Anybody who can fog a mirror can buy a tape or book. They tell you anybody could fog a mirror can do Amway, I promise you that’s not true. There’s like a thousand people that could do it. Most of them, they can’t do it to save their life. Why can’t they? I don’t even want to get into it. It’s not what they tell you, good advice.
So John actually came up with a list and he calls it the five power disqualifiers. And here’s what they are…
Do they have the money? If the person doesn’t have the money, stop trying to sell stuff because they aren’t going to buy. End of story. Every time a sale has ever been made in the history of the earth, the person had the money.
Number 2, do they have a bleeding neck? In other words, do they have an itch that they got to scratch. “I’ve got to scratch this itch”. If they don’t have a bleeding neck, they’re not giving you the money. Every time a sale’s been made in the history of the world, somebody at some level, they had a bleeding neck.
Number 3, do they buy into your unique selling proposition? Do they like your USP? What do you sell? What’s your value proposition? Always true, every time someone buys something or someone sells something.
Number 4, do they have the ability to say “Yes”? Now this is another one that was killing me when I was a new sales guy. I would go present to all these people, they had the ability to say no, they did not have the ability to say yes. Complete waste of time. And what they tell you is that I’m going to think it over and you’re sitting around and you’re counting your “think it overs” and somebody needs to come in and bop you on the head and say “Dude, you’re “think it overs” are never going to materialize. They’re gone. Forget them. Goodbye. Good riddance. Go do something that actually works”.
Then the last one is if fits their overall plans? Does it fit what they’re doing in their life? Does it fit? Does it not?
If you approach sales like, I’m going to not even try to advertise to people unless they fit these criteria and I’m certainly not going to go see them or not going to call them on the phone and spend time with them until I disqualified the 90% or the 98% that I should never be talking to in the first place and only dealing with the right people. That’s who I’m going to sell to.
What you’ll find is that you can probably spend 10 hours a week selling and making a perfectly good living if you do all that. So that’s in the 80/20 book and when I started seeing how this was everywhere, it was like everything you do in marketing is because of 80/20. The way you write a headline is because of 80/20. Where you put the headline is because of 80/20. Buying Google ads, what’s in Google ads, what is says and what happens next is all because of 80/20. 5% of your web pages make 95% of your money. 5% makes 95%. So you know what? You don’t have to go fix your whole website and all 10,000 pages. You can solve your problem by fixing 5% of your webpages which might be 1 page or maybe 2 or 5 or 10 and it’s all fixed. People just waste so much time so I’ve been talking a lot, back to you!
Joseph Bushnell: I’m actually thinking of all the ways that it is everywhere as well Perry, I mean I’m thinking 20% of all the people competing in any given marketplace are getting all the money and all the rest of the people are fighting over the crumbs. 20% of your customers are giving you their money and are funding you and you’re getting 80% of your profits from them, whereas the other 80% of customers are probably not worth as much to you, I mean it’s just fascinating to see how this is everywhere. So your advice would be to just eliminate the dross and narrow in on the good stuff?
Perry Marshall: Well, yes. First you have to be aware, the more educated people are, the more likely they are to treat everything and everybody the same and it is a huge mistake to do that because everything is not the same so 80% of your products only generate 20% of your sales. And probably your product development team is fitting all this time and money, essentially polishing turds! When they should focus on the 20%, a lot of companies can make a lot more money just by dropping the bottom 20% of their product lines that waste 80% of the resources that doesn’t actually make money.
And 80/20 applies to just about every number that you ever measure in any business. It’s just scary. I’ve got an appendix in the 80/20 book and it’s for the numbers people in the crowd and it graphs out 80/20 and it shows you, well you know, whether you are looking at the population of cities in America or the donations to a Church on a Sunday morning or the revenues of all the companies in the Fortune 500 or the output of dairy farms in Wisconsin, like it’s all 80/20. And like, once you see this, you can’t “un-see” it.
What I consider success is when people read this book and they’re like, ‘Oh my word I never saw this before and now I’m seeing it everywhere!’ I’m like, ‘OK you are the person I was trying to target when I wrote this book because you get it,’ and people are like, ‘Oh my goodness, you know I just applied 80/20 in my Google Adwords campaigns and I fixed these 3 ads and my click through rate went up 60%, oh my word, like, I told myself myself I had to do all this work”.
Ari Galper, some people might know who he is, he just sent me an email this morning, he said ‘Perry you’re not going to believe this. Well actually you will, I’ve been ruthlessly applying 80/20 in the last 6 weeks and I just ran my star principle score it moved from a score of 115 and now it’s a 155,’ (I can explain that later if you want me to). And for the first time ever we generated $100,000 paid in full in one week last week. This is raising my consciousness to realize I could be generating $400,000 a month with more 80/20. So keep drilling this into our heads!”.
And yeah, it never stops and it keeps going and going and going so it’s kind of like this well that never runs dry.
Joseph Bushnell: You also teach how to apply this 80/20 concept to how we spend our time and the things that we actually do within our own business. I’ve heard you call this our $1,000 an hour work, where instead of chasing our tails all the time and running around doing all of the $10 an hour jobs, we should be focusing on just the $1,000 an hour jobs. So how do we identify what our $1,000 an hour work is?
Perry Marshall: OK, 80/20 is a law of nature so it’s everywhere. So there’s some people sort of doubt me about this at first and so that’s OK so just follow me along…. So let’s say that you got a receptionist or secretary and let’s say they make $15 an hour or pounds or whatever currency you want. What I insist is that even the person who makes $15 an hour actually makes $1,000 an hour at least one minute of every day. You may be thinking “Well how is that? How does a receptionist make $1,000 an hour?”
So let’s say that the phone rings and she picks it up and somebody is really angry and the person that the angry person wants to talk to is on the phone and they can’t talk and the customer is tempted to slam down the phone and like just and leave in huff and just never do business with you again.
Let’s say that she listens patiently and carefully to the customer instead of doing her nails, instead of updating her Pinterest, or instead of doing, you know, making photocopies or whatever else she might’ve been doing. Let’s say does a really good job with the angry customer and she calms him down and then, let’s say, that she makes sure, because she double checks that the other guy calls the guy back within an hour.
Now, let’s say that took 5 minutes and let’s say she saved a $10,000 account. Is that a $1,000 an hour for 5 minutes? I mean, times 5 minutes is only 80 bucks, I dunno, if she makes 500 bucks, I dunno, I can’t do math in my head, but you see what I’m saying, right?
Joseph Bushnell: Yeah
Perry Marshall: Everyday there are these short little bursts of very high leverage activity where, you know, I don’t care what you do there’s 15 minutes of your day or maybe 30 minutes of your day that is more valuable than all the other 8 hours put together. But you don’t know it until somebody points this out.
OK, so what about those of us who like aren’t receptionists but were actually founders, entrepreneurs, CEOs, professional sales people? You know, if you’re a professional sales person, half of your income came from less than than 5 days of what you did last year. And when I tell this to sales people they’ll think about it and ‘Yeah, that’s actually about right,’ like OK so, why aren’t you doing more of that?
Joseph Bushnell: “Yeah very true, so what’s the answer to that? Why do people find it difficult not to do that, to let go of the smaller stuff, the less valuable stuff?
Perry Marshall: “Well, I think we are all conditioned for various reasons to just be busy. I think a lot of us are actually kind of uncomfortable on our skin, we don’t really know what we want to do, we’ve never given ourselves permission to do what we want to do. And it’s actually, the only people that are really doing what they want to do in life are the eccentric ones.
If you go find a person and they went to Oxford and they got the right degree and they got all the right credentials and they climb the corporate ladder and they did everything they’re supposed to do. If you just ask these people, like, “Are you really doing what you really dreamed of doing today?” they look at you like you’re from Mars, like, ‘Boy, I didn’t want to be a legal secretary I mean, I really wanted to be a ballerina but who could do that? So I’m doing this,’ and then they just kind of resign themselves and they start sleepwalking through life.
OK, if you have an awareness like, you know what, look, if you do $1,000 an hour work for 2 hours a day then you don’t have to do anything else all day! And it is possible to do this! OK? Richard Koch, the guy who wrote The Original 80/20 Principle book, he’s worth a quarter of a billion dollars and he works an hour a day! OK? And I would contend that if he worked more he would actually make less. And he’s very disciplined about being lazy. And so yeah, his books are great.
There’s this chapter, I think it’s on page 119 of my book , I lay out, here’s examples of $10 an hour work and it’s like, running errands, changing light bulbs and making photocopies, you know. And there’s $100 an hour work and that stuff’s like, solving customers’ problems, things like that. And there’s a $1,000 an hour work, which is doing something really strategic, negotiating a contract, or rescuing an angry customer and flipping them around so they’re not angry at you, that is $1,000 an hour work and you have to become aware of it first. And some people are just, they’re not self-aware. So, you know, if I can create more self-awareness and it helps some people not suffer the way I had suffered then I guess that was a good book to write.
Joseph Bushnell: “Absolutely. So the $10 an hour work that does still need to get done, are we hiring people for that?”
Perry Marshall: Yes. Yeah, I mean, it has to get done. But not at all of it does, I mean a lot of us do stuff that we really shouldn’t be doing. But the thing is, there’s always somebody available to do it. Like look, what’s the unemployment rate? And not only that, there’s people who like to do that! They like it! Like, I would never like to be an accountant but my accountant likes to be an accountant.”
Joseph Bushnell: “You’ve also written a few other books, two of them are Ultimate Guide to Google AdWords and Ultimate Guide to Facebook Advertising, how does the 80/20 principle apply in this arena?”
Perry Marshall: Well first off, my life as a sales person completely turned around when I started having lead generation bringing me customers so that I didn’t have to go pick up the phone and chase people around, OK. The customers started coming to me and that was such a relief. It was so much better, I mean,I can’t even tell it.
Well, if you’re going to generate leads, you have get traffic and where are you going to get traffic? Well, when Google started selling ads it was like the greatest invention for marketers in that last 50 years, I kid you not. It’s just amazing. And now it’s like, you can bid on a keyword and have your ad in front of people and so it has been around for a long time.
It was new when I first discovered 80/20 and I was experimenting with Google and I was doing all this stuff and one day I realized “Oh my word, everything in Google Adwords is 80/20” OK, which keywords get the traffic? How do you organize the campaigns? Which ads wins? Which ads lose? You know, the kind of changes you make, its all 80/20 and so, really, what I did to become the world’s bestselling author on the subject of Google advertising was I applied 80/20 ruthlessly.
In my book that’s really what I’m teaching you whether you recognize it or not. Now, some of the chapters actually tried to explain it but pretty much everything is 80/20, the same thing with Facebook. So 5% of the keywords generate 95% of the traffic, in Facebook 80% of the traffic you could buy is a complete waste, maybe 90% and it’s all about focusing, targeting, where are the leverage points? Where are the customers who actually buy stuff? And in the last few years, maybe in the last year, in particular, Facebook has gone from being a dog to being the hottest thing on the internet for marketers because Facebook ads really do work.
Joseph Bushnell: Something else from your 80/20 Sales and Marketing book you have a concept called The Power Triangle, could you tell us a little bit of about that?
Perry Marshall: Yes, so my marketing manager Jack Born came up with that, I think it’s just like one of the most brilliant things and it’s a little triangle and it looks like this…
On the lower left, T is for traffic, on the top corner C is for conversion, and on the lower right corner, E is for economics, and then there’s a triangle inside the triangle which makes it the triangle in the middle and the middle triangle is 80/20 and the power triangle is everything you need to know about marketing: traffic, conversion, economics and 80/20.
OK so, if you are not selling enough, you either don’t have enough traffic, you’re not converting the traffic you have or you are getting the conversions but the economics of what you’re selling are not right, like you’re not selling it for enough money or its not perceived as worth enough or whatever. Any problem you have is one of those three things and 80/20 applies to all of them, OK?
So then there’s a bunch of 80/20’s of where the good traffic is and where you’re going to waste your money. There’s a bunch of 80/20’s about here’s the few things that make a person buy and here’s all the other things, the many things that would screw it up. You know there’s the economics and which products you sell and how much money you get from them. So if, you know, if you recognize in any situation, is it traffic? Is it conversion? Is it economics? And where are the 80/20’s of all three of these things, you can solve almost any problem.
Joseph Bushnell: And my final question, Perry, is how can we locate invisible profits centers within our business? Again this is something that you taught in 80/20 Sales and Marketing.
Perry Marshall: So there is always a top 20% that’s not being fully exploited for what is worth because you could take your top 20%, of your customers, let’s say, that your 100 best customers gave you $10,000, OK? So that’s $1,000,000. Well 80/20 says that 20% of them will spend 4 times the money so that means 20 of them will spend $40,000 but it also says 20% of them will spend 4 times the money so 4 of them will spend $160,000 which means that one of them will spend $500,000, so if you’re only getting a million, you should’ve been getting 2 or 3 million.
Almost every customer list I’ve ever seen, there is unexploited appetite for more, and a part of the minority of those customers. Most businesses drastically underestimate how much money they could actually get from a group of people and it’s usually in the high end. Now sometimes it’s on the low end, it could go both directions but usually it’s in the high end. Until you at least get out a piece of paper and a pencil and kind of start sketching it out going, ‘Oh, OK!?’.
You ever wore blue blocker sunglasses that makes everything kind of blue and all of a sudden you notice things that you never notice with just regular?
Joseph Bushnell: Yeah.
Perry Marshall: That’s what 80/20’s like.
If you completely understand 80/20 and you kind of immerse yourself in it for a while, all of a sudden you’ll see it everywhere. You’ll drive your wife or your spouse crazy because you’ll be talking about it all the time, it will be like you’re new obsession like ‘Oh my goodness I just saw the 80/20 of the freeway traffic,’ and she’s like ‘Oh please, yeah I know, I know, 80% traffic goes on 20% of the roads and that expressway is like a top 20%, I know,’ and if that starts to happen, you know you’re on the right track!
Joseph Bushnell: Perry if we’ve listened to this and we’ve really enjoyed it and we’re really serious about applying 80/20 to our business and getting the results and the lifestyle that it can give us, where can we go?
Perry Marshall: So you could go to Amazon and you could buy the book for (well I don’t how much it is in the UK) but there’s a better deal that we have…
You can go to sell8020.com and you can buy the book for a penny plus shipping, and you can get in the US, it’ll cost you $7 or in the UK or elsewhere in the world it’ll cost you $14. But here’s why we do that, here’s why we sell the book direct. And by the way, we are taping dollar bills to every book to do this.
But the reason why is, I have found that people who actually read books are very good customers. They’re good coaching students, they’re good clients, so I’m acquiring clients. And if you go there what you’re going to find is an 80/20 sales funnel, which if you want to understand marketing you should study what we do because we rack the shotgun. We treat people who respond differently than we treat people who don’t. OK? You’ll see a lot of things and so you can learn as much by watching what I do as from listening to what I say or reading the book and stuff like that, if you do both it will really sink in so I want to encourage you to do that. Again it’s sell8020.com or you could go to perrymarshall.com and you’ll see the offer right there on the page and I would just encourage you, if this sounded intriguing then go down the rabbit hole and see how deep it really goes!
Joseph Bushnell: Excellent! That’s the end of today’s episode. Thank you for listening. If you enjoyed it, please go and leave a review on iTunes, and I also highly recommend going and getting your penny plus shipping copy of Perry’s book. It’s an incredible book, and last of all, a huge thank you to you Perry for coming on the show.
Perry Marshall: Well, thank you and you ask great questions and I really appreciate you spending the time and blessings to everybody that listened today.
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