THE LAWOF THE VITAL FEW

AND THE TRIVIAL MANY

The Pareto Principle

ALL PRODUCTS, VENDORS,

CUSTOMERS, EMPLOYEES,

are not created equal

107 years ago a man stumbled across an ideathat would change the course of history.

The revelation would come from a simple observation of his vegetable garden…

Vilfredo noticed something interesting about his pea pods:

He discovered that 80% of his peas

came from a mere 20% of his pods.

Intrigued,the 59 year-old Italian economist

soon applied this 80/20 ratioto other socioeconomic scenarios.

His last name was Paretoand his most famous finding was that

20% of the people in Italy owned 80% of the land.

This became known as:

Pareto’s Lawof Unequal Distribution

20%80%

Joseph Juran in Washington, D.C. discovers Pareto’s work.

Fascinated, Juran also finds:

80% of the World’s GDP is controlled by 20% of the people

80% of complaints come from 20% of the customers

80% of a company’s sales come from 20% of its products

During World War II

THE VITAL FEW

Juran’s most important application of this is in Quality Control,Where he notices the majority of defectscome from a small percentage of the total causes

Juran refers to Pareto’s Law as:

“ The law of the vital few

and the trivial many

“

“

”

Everyone from Xerox to the IDC and even the United Nations have tested Pareto’s Law, and found that within a tolerance of 5%, the 80/20 rule works just fine…

-The Economist

80% of your profits come from 20% of your customers

80% of a company’s sales are made by 20% of its sales staff

80% of new business comes from 20% of your existing customer base

80% of a company’s sales come from 20% of its products.

MOST IMPORTANT:

TIME INVESTMENTInvest your time then, on the VITAL FEW:

Customers: QUALIFY. ALWAYS BE CLOSING. (Sales Methods)

Products: SHOW THE BEST & WHY. People pay for expertise.

Salespeople: GET HELP. Veterans grow your sale for you.

20%80%

How to WOW:DiscoverIdentify customers and their needs

Who are your vital few? Identify them and more importantly – what matters to them.

DeployDevelop Ideas & Concepts to meet needs

Prioritize them for Best Impact

Test them 1 by 1 & Gauge Effectiveness

DesignMake them Habits

Measure Progress

Constantly Improve

“ Today’s extras are tomorrow’s

expectations

“

IT’S THE BIG LITTLE THINGSWhat little extras do you do for the VITAL FEW?

Home James - Upper class flyers of Virgin Atlantic:Free car service within 75 miles of the airport.Driver calls dispatch 15 minutes out; when you arrive they tag and grab luggage.

New Jersey - The Tampa Bay Lightning season ticket holders:Special STH game jersey. Embedded in the sleeve is a computer chip.Scan it to save 25%/35% off food/merchandise respectively.Acknowledges and thanks your best customers.

Helicopter Roadside AssistanceIf your Lexus LFA breaks down over in Europe,They will helicopter in a team to fix it. On bigger repairs Lexus will put you up in five star accommodations. (the LFA costs $400,000)

TAKE CREDIT (Gallery Furniture, Houston, TX)

TODAYIn your home tonight. You pay less.

We assemble, haul-off, and help out.

Track the delivery and see who’s delivering for security

Unbeatable Service

We’re 1 call away.

Gallery / Leather Guard – 5 years

In-Home Service – 3 years(Don’t Use, Don’t Lose)

RelevantDesigners to help with your plans

Sleep experts to diagnose needs

Special Orders / Custom Furniture

Made in AmericaSupport your country, show your patriotism, and rest in the knowledge of better quality.

Your money pays neighbors to build better, rather than foreigners to ship less.

Solid WoodElegant, timeless, and durable.

It’s cheaper to buy the table once – instead of three times.

CommunityGallery Furniture gives back to both the community and its customers.

Providing support local charities and donating to those in need.

Loyalty Club hosts events and special offers for our exclusive members.

Ready to count your peas?