The 80/20 Rule
There is an age-old rule that governs success and people. This rule was created in 1895 by a man in Italy named Wilfred Pareto. He observed, at that time, that most people had little influence, power, or money in the marketplace. He called this group of people the “trivial many.” He decided that these people made up about 80% of the population. He then theorized that the remaining 20% had all of the influence, power, and capital of society. He called them the “vital few.” He created the 80/20 Rule that has governed success for more than 100 years. The 80/20 Rule applies to your prospects, as well.
80% of the prospects you work with will create 20% of your income. The amount of time, effort, and energy is disproportionately not in your favor. The odds of becoming a Champion Agent when working with this group are long indeed.
The devastating part of working with this group is that you spend 80% of your time, capital, effort, energy and emotion to create a 20% return on investment. The numbers are not in line with a successful business.
A Champion works with the elite 20% of the population that creates an 80% return on investment because they gain an added return or unequal return on their investment. This elite 20% doesn’t mean that you have to work only with those who would be defined as the upper crust of society. Although, working with high priced buyers and sellers certainly can have a positive effect on your income. In evaluating the quality of the prospect, we determine their level of motivation, financial capacity, ease to work with, realistic expectations of service, and what they can purchase. I have met high priced buyers and sellers who were also high maintenance; I fairly placed them in the 80% category. The question you must wrestle with quickly is does this prospect fit into the 80% or the 20%.
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The Romero Team - Melcher Agency
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