I haven’t always been a consultant to Chambers and Associations. In 2006 I was selling advertising for Cox Radio’s News/Talk station in Orlando, Florida. I’d been there for almost 2 years, and although I was doing fairly well, I knew that I would never get where I was going working at that station. You see, I was the new kid on the block and all the “good accounts” were already taken by sellers who had been there for 10 years and longer. I had to make a move or I’d be stuck behind these folks the rest of my career. I found my opportunity in Greenville, SC where I was offered the Senior Account Manager position, inheriting an account list billing $35k per month. When I got there, that list wasn’t billing $35k a YEAR! I knew that I was going to have to do something drastic to get where I wanted to go, but at least HERE I had the OPPORTUNITY!
Fast forward 18 months and I was being recognized as the first person in the history of Cox Radio in Greenville to bill more than $1,000,000 in a single year. How did I take a tiny little list and grow it to the largest they’d ever seen in just a year and a half? I applied the Pareto Principle…the 80/20 Rule…to everything I did and turned my list around.
You can do the same at your chambers and associations if you follow a few simple guidelines.
- Do a complete 80/20 Analysis of your membership! The 80/20 Rule states that there is a disproportionate relationship between the amount of effort you put out and the results you get from those efforts. It’s not always 80/20 and it doesn’t have to add up to 100 as you’ll see in my example. The first thing I did when I arrived in Greenville and saw what a shambles my account list was in, was to analyze the mess. I took all my accounts (I had a LOT of very small accounts and a couple with the potential to be much larger) and put them in a spreadsheet starting with the largest and ending with the smallest. I then did some simple math and realized that 78% of my billing was coming from 5 of my 32 clients…roughly 16%. My analysis came out as 16/78. Stop reading this and figure out what percentage of your membership is contributing roughly 80% to the bottom line right now! I’ll wait…
- Identify your TRUE 80/20 Rule Members! Once I had identified the 5 clients or 16% of my base who made up nearly 80% of my revenue, I had to learn everything I could about them. What set them apart? Had they been in business longer than the rest? Were they in certain industries or demographics or socio-graphics? Only by figuring out what made them special could I design a program to find more LIKE them. You can do the same. Take a long, hard look at the folks who contribute the most to the bottom line at your organization and, as a staff, identify what makes this group stand out from the rest. Get specific and keep working to make the definition of a TRUE 80/20 Rule Member as succinct as possible.
- Analyze your efforts! Knowing who I was going after was only the first part of the battle. I had 27 clients (84% of my list) who were only contributing about 22% of my revenue, and just take a guess as to where most of my time was spent. That’s right, I was spending 90% of my time focusing on keeping those folks happy, neglecting the 5 that really paid the bills, and leaving me nearly zero time to go out and prospect. Sound familiar? It was time to do something DRASTIC!
- Manage your time! I needed to find more time in the day to nurture my 5 top clients and find more just like them. But we all have only so many hours in a day…where was the time going to come from? I had no choice…it was time to fire some clients! Now before you start screaming at your monitor, let me explain. I identified those clients who contributed the least to my bottom line AND required the largest amounts of my time (often the smallest advertiser has the most to lose by making even a small investment…just like in your organization) and I was able to pass them off to a younger account manager with plenty of time who was INCREDIBLY grateful to have the extra billing. I did that over and over again, eventually even “firing” one of the original 5 “top clients” when they no longer fit the profile. I’m proud to say that only 2 of the 27 clients I first handed off quit working with the station within the first 6 months, and only 3 others dropped their advertising in the 6 months that followed. Frankly, the 5 that did go away were clients I was OK with seeing leave (and management whole-heartedly agreed). Stop doing those activities that are taking up 80% of your time and only yielding 20% ROI. Aggressively seek those underperforming minutes in your day and replace those efforts with work that is going to yield 80%! It only makes sense, right?
In the end, only you have control of your time. Whether we’re talking about recruiting, engaging and retaining members or your annual golf tournament…evaluate everything you’re spending precious resources on and see if it makes sense to continue doing it. We have choices, and it’s the choices we make today that are going to make our organizations stronger tomorrow.