Today’s post is going to be short and sweet. I was in Wyoming working with the Sublette County Chamber of Commerce in Pinedale last week, facilitating a Board Boot Camp for their non-profit members, and we kept coming back to how the Pareto Principle plays a significant part in their organizations. If you’ve read this blog for ANY length of time, you know that I eat, breath, sleep and LIVE Pareto…the 80/20 Rule…in every aspect of my life. I believe, as I told the attendees last week, that if we look hard enough, we can find the answers to all of life’s questions inside it. Let me show you just a few examples we came up with during my two days in Pinedale:
- 80% of your revenues come from the top 20% of your members (clients, customers, donors, etc). The non-profit leaders in Pinedale concurred. The VAST majority of their bottom line comes as a direct result of the top 20% of their base. I bet YOUR organization is similar. It may not be 80/20, and the two numbers don’t have to add up to 100, but I’ll bet dollars to donuts that YOUR money comes from a disproportionately small percentage of your members.
- 80% of your HEADACHES come from the 20% of your membership that spends the least. When I started my career in radio advertising all those years ago, I found that the little guys…the ones who spent the least with me every month…were the ones who took up the lion’s share of my time. It stands to reason; they have the most to lose and the money they’re investing in you and your organization is a significant portion (maybe even 100%) of their budget. If this fails, THEY fail. So they keep YOU, the seller, on a very short leash. It’s a HUGE reason I’m so adamant about waiting until a business is at least 2 years old before we prospect them.
- 80% of your efforts are responsible for only 20% of your results. This one is easy to understand. We spend a great deal of our time and energy on “busy work” that truly doesn’t pay off. We owe it to our members to be better stewards of our resources. We need to identify the 20% of our efforts that lead to 80% of our results, and AMPLIFY those efforts, while eliminating as much as we can those hours of busy work that lead us to a scant 20% of our returns.
- 80% of your resources (time, energy, money, man-power) are being spent on things that only 20% of your members care about. If we did an audit on your communications to your members, looked at your social media posts and your newsletters and eBlasts and so forth, what would we find? Are you taking time to educate your members and the community at large about what you’re doing behind the scenes at County Council, City Hall and the school board…things I think we’d all agree benefit EVERYONE in town…or are we spending 80% (or more) of our time trying to get people to attend our functions, the ones that 8-12% (or less) of our membership will EVER take advantage of? I think I know the answer already, but why not make a point of figuring that out today, and moving towards a solution right away?
In the end, it’s about focus. I could write an entire BOOK on ways in which Associations and Chambers of Commerce could benefit utilizing the 80/20 Rule (in fact, I think I WILL!), but for today I challenge you to stop what you’re doing, evaluate where you spend your time and other valuable resources, and make some tough decisions about how you’ll be doing things differently from here on out. Perhaps when you’re done you’ll take a moment to reply to the post below and let us all share ways to implement the Pareto Principle into our organizations.
I look forward to hearing your ideas…!