80/20 Marketing: The $10-Million Case Study

80/20 Marketing is based on the 80/20 Rule, aka the Pareto Principle: in life -- and in your marketing -- only a few things matter. Most things don't.

About 20% of what you do to promote your business produces 80% of your profits, give or take. Most things you do to promote your business are a waste of time and money.

Don't believe me?

Look at your calendar for last week. How many hours of effort produced real profits?

I'll wait ...

Okay. You're probably peeved right now, but relax. There's a $10-million silver lining to all this.

Because, if 80% of what you're doing to promote your business is a waste of time and money, that means you have plenty of time and money to redeploy into the high-value, 20% activities that are already producing the bulk of your profits.

In other words, you can boost your profits fairly rapidly -- and predictably -- by doing more of what really makes you money in the time you now waste doing what doesn't.

Want to see a $10-million example of this?

Look at Plenty of Fish, the renegade Canadian dating web site first profiled by Inc. magazine in 2009.

The sub-headline to the story tells you all you need to know about his 80/20 success:

"Markus Frind works one hour a day and brings in $10 million a year. How does he do it? He keeps things simple."

The entire story is well worth your read, but here are the highlights and takeaway lessons you can use:

Five years ago, [Frind] started Plenty of Fish with no money, no plan, and scant knowledge of how to build a Web business. Today, according to the research firm Hitwise, his creation is the largest dating website in the U.S. and quite possibly the world.

Until 2007, Frind had a staff of exactly zero. Today, he employs just three customer service workers, who check for spam and delete nude images from the Plenty of Fish website while Frind handles everything else.

Bottom line: by doing only the vital few things that make him money, Markus Frind can ignore the trivial many things that don’t.

And make no mistake -- those trivial 80% matters are clamoring non-stop for his attention (and yours):

Frind is aware of his site's flaws but isn't eager to fix them. "There's no point in making trivial adjustments," he says. Frind's approach -- and the reason he spends so little time actually working -- is to do no harm.

Frind's 80/20 Marketing success puts him at the top of the food chain, where he can look down and laugh at Groupon, Yahoo, and other complex, labor-intensive businesses that don’t throw off a fraction of the profit per employee that his elegant little operation does.

His success formula is simple. Do what makes you money. Drop or delegate the rest.

So, what makes money for Frind and Plenty of Fish?

Here are 3 of the biggest keys to his 80/20 Marketing success ...

1) Get noticed

"Frind knew little about search-engine optimization or online advertising, but he was a quick study. From March to November 2003, his site expanded from 40 members to 10,000."

The more people who found Plenty of Fish in Google, the more he profited from the ads running on his site. More users attracted more advertisers, in a virtuous circle that caused his profits to skyrocket.

Question: What are you doing today to REALLY get your business noticed?


2) Deliver an outstanding user experience

In a 2006 interview with Web Publishing, Frind says:

"I suppose that the biggest issue has always been performance, In order handle 14-15 million pageviews a day on 4 servers you have to constantly tweak the database, as execution paths etc change as the database grows and load increases."

How do you know you're delivering an experience people want? Test.

"There is no magic bullet, but you should always test new designs or new text etc to get the result that you want. You will never have the worst design and never the best, but through testing you can always improve."

Get that? The more dates his site found for users, the more users found his site -- through word of mouth and media coverage.

That means you need to test your web pages, phone scripts, emails -- everything you do or say to prospects and clients.

Question: What are you testing today?


3) Keep things simple

According to the Inc. interview:

Amazingly, Frind has set up his company so that doing everything else amounts to doing almost nothing at all. "I usually accomplish everything in the first hour," he says, before pausing for a moment to think this over. "Actually, in the first 10 or 15 minutes."

Frind has kept his staff small by design--he has only three employees, who handle customer service--and he personally works only about an hour a day.

In another 2006 interview with the Affiliate Blog, Frind said: "As humans one of our biggest weaknesses is becoming obsessed with what is not important. We spend 90% of our time on that little 5% -- and that is why so many of us fail."


Lean is lovely. You can build a business that satisfies clients and pays you back handsomely. But only if you're willing to say No to at least 80% of the possible demands on your time and money, especially in marketing.

Question: What can you stop doing today, to simplify your business?


You can do this. Perhaps not to the extent Markus Frind has, but you can boost your profits today by ruthlessly cutting out the trivial demands on your time and marketing dollars, and replacing them with what really works.

Of course, you can't know what works until you examine your QuickBooks reports, client database, or other data.

That's an advantage Frind had. He's a software programmer first and a marketer second. By obsessively focusing on his numbers -- web visitors per day, the sources of those visits, the performance of his database, etc. -- he instinctively did more of what made him money.

Good news: You don't have to be a techno whiz or get 1 million visits to your web site to make 80/20 Marketing work.

Let's say you're an insurance agent, for example ...

Find out which clients make you the most profit (the 20%) and which don't (the 80%).

Double up on whatever you did to find the vital 20% of your clients. Advertise where you advertised, network where you networked, say what you said, etc.

Meanwhile, ignore or delegate the 80% of clients who demand the bulk of your time and energy, yet deliver only a fraction of your overall profits. Whatever you did to get these clients, stop doing that.

By doing this, you free up time, money, and energy to devote to cloning the vital few 20% of clients who really matter. You do this by delivering an outstanding experience (to delight them and stimulate referrals) and by keeping things simple (to further delight clients and to preserve your own time and energy).

I did all of this on a smaller scale than Frind in 2005, when I created a $2.1-million revenue stream for my own one-man business. And I show people how to copy that 80/20 Marketing story here.

Bio: Kevin Donlin can help you grow your business and enjoy the breakthrough results your hard work deserves. If you're interested in boosting your revenues and profits, please click here.

Everything I Know About Creativity

Have you seen this book?

It's called, Everything Obama Knows About The Economy ...

... and it's 150 pages of blank text.

Get it?

Apparently, a lot of people got it.

Because, at the time of this writing, Everything Obama Knows About The Economy is getting a pantload of media attention -- and it's sold out on Amazon.

Now. Admit it. Love Obama or loathe him, don't you wish you had thought of this idea first?

Well, the "author," Jimmy Moncrief, didn't.

It turns out that this clever idea of selling a blank book is simply a new take on an old idea, dating back at least to 1995 ...

... when Everything Men Know About Women was published.

It, too, is an empty book.

And these two books illustrate everything I know about creativity, which is this: There are no really new ideas. Only new combinations of old ideas.

The blank book itself is, after all, just a "written" version of that kindergarten prank, the empty gift box.

So, when it comes to creating new ideas for your business, don't rack your brain too hard. Instead, look around for new combinations of old ideas.

Here are 3 examples that I've written about elsewhere:

1. Drive-thru windows at a restaurant
Introduced by In ‘n’ Out Burger, in 1948.

Where did the idea originate? The City Center Bank, Kansas City, MO, opened the first drive-thru window in 1928. By borrowing an old idea from banking, In ‘n’ Out Burger produced a breakthrough in fast food.

2. Chuck E. Cheese's restaurant
Founded by Nolan Bushnell in 1977.

Where did the idea of combining video games and food originate? Before opening a restaurant, Nolan Bushnell founded another company in 1972 -- Atari. So he didn't have far to look for inspiration.

3. Lady Jane’s Haircuts for Men
Founded in 2004, Lady Jane’s employs attractive female stylists to cut hair, surrounded by sports memorabilia on the walls and ESPN on plasma screen TVs.

I can’t prove it, but I'll bet you a haircut that Lady Jane’s is a new combination of two older ideas: Great Clips and Hooters.

What do you think?

Bio: Kevin Donlin can help you grow your business and enjoy the breakthrough results your hard work deserves. If you're interested in boosting your revenues and profits, please click here.

What Do 75% More Profits Look Like?

Here's a calendar representing a typical 5-day work week ...

There are nickels on 4 days: Monday through Thursday. That represents how 4/5 (or 80%) of your marketing efforts produces about 20% of your profits (based on the 80/20 Marketing principles I wrote about here).

There are 8 dimes on one day: Friday. That represents how 1/5 (or 20%) of your marketing efforts produce a full 80% of your profits.

So, how do you get 75% more profits, from the same time worked each week?

I'm glad you asked. You do this ...

Replace just one day of low-value 80% marketing efforts with one day of high-value 20% efforts.

When you do, you can go from 100% to 175% of profits -- a 75% gain. Do the math. We've replaced 5% of efforts (and profits) with an 80% portion, in only 1/5 of the workweek.

Exactly how you do this is the focus of my new 80/20 Marketing UnCoaching program ...

... but in a nutshell, you stop managing your time and start investing it.

Specifically, you can enjoy a 75% jump in profits -- or better -- by doing 4 things:

1. Find the vital 20% of your marketing efforts
2. Find the trivial 80%
3. Engage in 80/20 Substitution (trade low- for high-value efforts)
4. Analyze and improve

If it's not sold out or expired, you can learn more about 80/20 Marketing here.

Bio: Kevin Donlin can help you grow your business and enjoy the breakthrough results your hard work deserves. If you're interested in boosting your revenues and profits, please click here.

How to Grow a Business Faster, Smarter

Wondering how to grow a business?

Strange, but true: Most things in business (and life!) don't matter.

Based on the 80/20 Rule and my own experience, only a few of your clients, marketing methods, products or services really mean anything.

Example: Only about 20% of your marketing methods (networking at trade shows? client referrals?) really work -- they produce about 80% of your profits.

The other 80% (networking at the Chamber of Commerce? social media?) don't work so well. They produce about 20% of your profits.

If the Vital 20% of your marketing efforts produces 80% of results, that's a 4x output.

And if the Trivial 80% of your marketing produces 20% of your results, that's a 1/4 output.

As a result, your Vital 20% is 16x more powerful than your Trivial 80%.

That means there's an easy route to dramatically higher profits staring you in the face: Spend more time, money, and effort on the 20% of your marketing that produces 80% of your profits.

And don't say, "I don't have time for more marketing" ... because you DO have time.

Remember? About 16 of every 20 hours you spend on marketing this week -- 80% -- are largely a waste of time.

All you need to do is determine your Vital 20% and your Trivial 80%, then move time and money from the 80% to your 20%.

And don't say, "Sounds good in theory. What about in practice?" ... because I used 80/20 Marketing to produce a $2.1-million breakthrough in my own business. More on that story here.

Fact: If you have any clients and revenue at all, you must be doing something right. Do more of it tomorrow in the time you're wasting on other things today, and you win.

As the year draws to close, it's the perfect time to analyze your your QuickBooks files and client database, to find out EXACTLY what's making you money.

Stop wondering how to grow a business. The numbers don't lie and the answers are there, if you look for them.

Bio: Kevin Donlin can help you grow your business and enjoy the breakthrough results your hard work deserves. If you're interested in boosting your revenues and profits, please click here.

Sampling is Sweet, Smart to Build Your Business

Do you offer samples in your business?

If not, why not?

There's no easier way to get people to try what you're selling than to give a small part of it away.

If you're any good at what you do, you can always turn a percentage of "sample prospects" into sales.

Whereas, you can't turn any percentage of 0 prospects into any sales :-)

At left is a case in point: the Ho Ho Mint Moca ...

While writing at my favorite Caribou Coffee shop, a clerk brought me a tiny sample of this yummy moca, which I would not have ordered otherwise.

A good sample, like this one, is irresistible.

Examples of free samples you can offer:

• a teleseminar or series of blog posts to "sample" your coaching program
• mow one front or back yard free to "sample" your lawn service
• offer the first chapter free to "sample" your ebook

You get the idea.

Sampling is how King Gillette built a shaving empire -- give away the razors, sell the blades.

Sampling is how Angry Birds built a base of millions of prospects who later shelled out more than $350 million, $.99 at a time, for the paid version.

Sampling is one way Debbi Fields built her Mrs. Fields Cookies business.

Sampling is worth sampling as a way to build your business.

Bio: Kevin Donlin can help you grow your business and enjoy the breakthrough results your hard work deserves. If you're interested in boosting your revenues and profits, please click here.

80/20 Marketing: Fun with Numbers

Are you familiar with the 80/20 Rule, also known as the Law of the Vital Few, and the Pareto Principle?

It holds that roughly 80% of results come from 20% of causes. In almost every area of life (and business), a small input produces a very large output.

The ratio is rarely 80/20 exactly -- it may be 92/8 … 78/22 … 85/15 -- but it is always disproportionate.

According to Wikipedia:

Business-management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed in 1906 that 80% of the land in Italy was owned by 20% of the population; he developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas.

It's a spooky natural law that always works, but doesn't make any logical sense.

Examples:

• about 20% of your clothes get worn 80% of the time
• about 20% of your carpet gets 80% of the foot traffic
• and about 20% of bugs cause 80% of software crashes (at Microsoft, anyway)

On and on it goes -- a large majority of results comes from a small minority of causes, in a ratio of about 80/20. In any business, including yours, about:

• 80% of your profits come from 20% of your customers
• 80% of your complaints come from 20% of your customers
• 80% of your profits come from 20% of your marketing activities

That last figure is important.

Because, if 20% of your marketing produces 80% of your profits, then 80% of your promotional efforts produce only 20% of your profits. In other words, 4/5 of your efforts are largely a waste of time.

Yikes.

Therefore, there's an easy route to dramatically higher profits: Spend more time, money, and effort on your most effective marketing methods -- the 20% of your marketing that's producing 80% of profits.

Imagine if you could double up on your vital few 20% marketing efforts. You would get 160% of your current revenue. But ...where do you find the extra time, money, and effort to do this?

In a word, replace.

Simply replace some of the time, money, and effort you're spending on low-value 80% marketing with high-value 20% marketing.

Example: Let's say you spend 10 hours a week marketing your business, and 40 hours a week in operations. (Yes, that's 50 hours a week -- most entrepreneurs I know work at least that much.)

And let's say that, after careful analysis, you find that only 2 of 10 hours spent marketing -- 20% -- are highly profitable. Turns out, those 2 high-value hours are spent attending a single weekly networking meeting, where you get 80% of your business.

The remaining 8 hours a week you devote to marketing are on low-value (for you) activities like Twitter, writing articles for ezines, and answering email.

So, try this: "Steal" 2 of those low-value 8 hours and replace them with high-value networking.

How?

• find one more valuable networking group ... 
• spend an extra 2 hours being useful to the people in your current networking group ... 
• start your own networking group

Whatever you decide, any time, money, or effort you can redeploy from low- to high-value activities is like an investment that's almost guaranteed to deliver higher profits from the same hours worked each week.

Try it for yourself and see.

Bio: Kevin Donlin can help you grow your business and enjoy the breakthrough results your hard work deserves. If you're interested in boosting your revenues and profits, please click here.