Wednesday, April 17, 2013

The Strange Case of the $2.1-Million Stopwatch (and Your Marketing)

This may be the strangest blog post you read all week.

Or the most-profitable.

Or both.

Here's why ...

I write frequently about the 80/20 Rule (aka the Pareto Principle), which holds that about 80% of results come from 20% of activities.

In other words, most things don't matter -- only a few things do. The world is predictably unbalanced.

You'll find examples of the 80/20 Rule everywhere:
  • about 20% of your carpet gets about 80% of foot traffic
  • 20% of people pay 80% of income taxes
  • 20% of pea pods in your garden contain 80% of peas
... and on it goes.

In business -- and especially marketing -- most people spend 80% or more of their time doing unproductive tasks. Maybe 10-20% of what people do directly relates to making money.

But why am I wearing a stopwatch? And is it really worth $2.1 million?

Let me explain ....

First, let's talk about how Darren Hardy, publisher of Success magazine, used the 80/20 Rule and a stopwatch to outsell an office of 44 veteran real-estate agents, in only 90 days -- when he was just 20 years old.

He writes:
As a real estate agent, there are hundreds of unproductive activities you can do to rationalize that you're ‘working': putting lock boxes on doors, shuffling escrow paperwork, doing open houses, taking "floor time," putting signs out, driving around "looky-loo" buyers, etc. In reality, there are only three things ("show time" events) you do that make money:

1) pitching a listing,
2) negotiating a contract, and
3) prospecting to get more of 1 and 2.

Everything else that's a productivity "time suck" can and should be delegated.

Get that? Only a vital few activities in real estate sales make money, according to Hardy. Three, to be exact.

And if you take a close look at your business, I'm 99% sure you'll find only a handful of activities that really make you money.

But knowledge is not enough. You need action. Here's the action Hardy took ...
I became so obsessive about monitoring my productive time that I would wear a stopwatch around my neck (yes, in meetings, at the store -- great conversation starter!). I stopped and started it all day long -- "OFF" when going to the bathroom, "BS-ing" in the hallway, waiting for the person to pick up while the phone rings, driving from appointment to appointment; "ON" only when actually engaged in one of my three (see above) high-value "show time" events.

The first day I clocked my productivity, after an exhausting 12-hour day, I was floored when it only read 11 minutes, 56 seconds. At first I thought it was broken. But no, after 12 hours of "work" I had managed less than 12 minutes of revenue-generating productive labor. WOW, did I learn a valuable lesson! From that moment on, I wore my stopwatch religiously every day to improve my actual productive time.

It is SHOCKING to realize how little time salespeople actually spend selling each day. Sometimes I would work like mad all day and only clock 14 minutes. FOURTEEN MINUTES?! My goal became at least 2 hours a day, every day, day after day. As a result of that focus on real sales productivity, I became the No. 1 agent in the office during my first year in the business. I was No. 1 in the city at age 21, and then the entire county of 3,000 real estate agents by age 22 (in a real estate market as crappy as it is today—so no excuses).

Pretty simple, huh? By measuring his time with a stopwatch, Hardy was able to do more of what made money and less of what didn't. As a result, he quickly rose to rank #1 for sales among 3,000 people!

So, here are three questions for you:
  1. What are your vital few activities that really make you money?
  2. How much time are you spending on them?
  3. Are you brave enough to take Hardy's (and my) 80/20 Challenge?
I can tell you from experience that EVERY DAY I wear my stopwatch around my neck is more productive (and profitable) than days I don't. The more time I'm able to shift from "time suck" to "money making," the more money I make ... and the fewer hours I work.

Now. What will you do with this information?

You can say to yourself, "Yeah, I know that" and move on ...

... or you can do something about it and give this idea a try.

If you decide to accept this challenge and time yourself, do NOT wing it and just look at a clock. Trust me: As someone who's been practicing this for nearly 10 years, I can tell you that you need to see tangible evidence for your subconscious mind to buy into this new idea. That's why you need to actually wear (or carry) a stopwatch.

Why not try this 80/20 Challenge for yourself, and wear (or carry) a stopwatch tomorrow?

When you learn EXACTLY how much time you're spending on the 20% of tasks that make you money, you can start turning your business upside down to focus more on those vital few activities. And your profits will soar. There's really no other outcome possible.

Oh, wait. What about that $2.1 million?

That's the amount of money I raked for one of my businesses by applying these same ideas. I simply did more of what made me money and less of what didn't. You can learn more about 80/20 Marketing here.

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