- Okay, so what we said is you know we've been talking
about the 80/20 rule quite a bit and I want
to explain this to you.
It's fractural. You go, what do you mean by fractural, okay?
I'm not a mathematician, okay, myself.
I'm going to show you a little bit of math.
Don't daydream, just stick with me so you can
kind of understand how this process works 'cause
it's been scientifically proven from this way, okay?
So, if you think about it, 20% of 20% is four.
Okay, you know that says, so we take, remember
we started out with 100.
We've already ate 20 cents. Take the 20%.
Take the 20% of the 20%, that's four, or
what we know as four percent, Okay?
This four percent is extremely powerful.
We don't really think about it.
There's a bunch of studies and everything else
that go into it.
In a lot of companies, four percent of the clients
generate 64% of the revenue.
That's fractural. Four percent do 64% of the revenue.
So, I start of with my clients working to focus on that 20%.
I'm quickly getting them to focus on and figure out,
who are their four percent of their customers
because this can mean 64% of profit for them.
So a quick way, a company wants to double its sales,
they just need to sell to their four percent, the same
amount that they sold before and they'll automatically
end up increasing their percentage profit by 64%.
So it's a key sort of metric a driver,
whatever you want to call it, now with a lot of companies,
that look and say okay, how do we get
more of this four percent and that's part
of that filtering process.
Which is my breakthrough to Number Rule, which is,
The Four Percent Rule.
So, remember that, write it down,
four percent of your customers can generate up to 64%
of your profits.
The key is you got to be able to deliver in value
and higher level services to get to that point.
So everybody's running around trying to chase new clients.
Most people don't need to.
Your clients, if you have a certain amount
of existing clients, your clients are right there.
They're the easiest clients to sell
are your existing clients.
Your four percent clients come from your
existing 20% client's that are already there.
But everybody wants to run around and chase new clients.
Just go from the one's you've got from that standpoint.
So, just let me tell you a little quick story here
that I went back and looked at myself so,
I was in the, you know, in the last decade in the seminar
business and we're doing these financial case seminars.
When I look back I try to apply the rule as
simple as, how does it work for me?
Well this is what I discovered.
I have one client in a ten year period of time
that's done as much business with me and I've made
as much profit from this one client,
than all the other clients combined over ten years.
One client.
All in the same industry, all doing the same type
of financial events, whatever,
one client was equal to me than all the other
clients over ten years.
So if I really understood this rule at the time,
eight or ten years ago, here's what I would have totally
done different.
This is the power of The Four Percent Rule.
I would have spent 80% more of my time talking to that
client, working with that client,
trying to figure out what else we could do together.
But I was a dumb ass.
I was out there trying to find new clients.
Right, then there's the expense of starting new clients.
Sometimes they work, sometimes they don't work,
sometimes you lose money, sometimes you make money.
When I had my golden goose sitting there right in
front of me, if I had just pestered and talked more and
strategized more and figured out what else can I do
with that client, you know, that's where the power
would have been from that.
That's how powerful The Four Percent Rule is.
And that's where we come up with this Four Percent Rule,
four percent of your clients spend 16 times the money.
That's built into your 20% there.
So just remember that there is going to be a
percentage of clients that are always willing to spend more.
In at least ten times value, right?
So an example, if one of our clients what we are doing,
and it takes time to create this, people think
you can create this overnight, so we have a client right now
that I'm working with, that we realized about
the four percent, so, it took us about 6 months of testing,
tweaking, crying around, what we came up with a new program
that is twice as much as any other program he sold.
He was typically selling a $5,000 program or $10,000
program, he now sells a $20,000 program, okay?
And we know the rules.
The rules tell me that four percent, or four out of 100,
should be willing to buy that program, okay?
We are selling that program, testing, it's working.
What it found out for me is that we're selling too
many of them, okay?
And what that tells me is, we're selling like 12
to 14 out of 100.
Which tells me, we can deliver more value to these clients.
We haven't hit the four percent.
It is a rule.
So that tells me right now okay, the four percent
is probably closer to $30,000 program, if we can
find a $30,000 program.
'Cause yeah, if you sell five or six out of 100, okay you're
close to that four percent rule.
I'm selling three times that right now, twelve percent.
So that tells me there's still more value in those
existing clients, which are our best clients.
I just need to help come up with them, to come up with
a better value proposition for them, to get in the point
where they'll go that higher level.
So don't always think you've got to go somewhere else.
If you saw my point from the beginning it's about quality.
You notice that these four percent clients are high quality?
What would you rather sell, 20 or 30 $1000 clients,
or one client at $20,000?
Twenty thousand right, you can give them way more service
you're dealing with one, you're not dealing with the other.
This is the mathematics of the rules that are behind us
to get to that point, if you think about the process.