The 80/20 Rule
I read a Seth Godin post yesterday titled “Dumbing Down.” Seth mentions mass-market communications, pandering to the masses and the negative effect “dumbing down” communications can have. He says, “I’ll take the smart customers/readers/prospects every time, please.” I think he is arguing that dumb messages generate dumb and/or difficult clients. If this generalization is true, does the inverse hold up? Do smart messages attract smart clients?
This started me thinking about his assertion. Lead Critic and the participants’ broadcast a fair blend of real life expertise and best practices, daily. I think we offer some of the best advice available to sellers, buyers, and users of internet leads. If LMS partners and Lead Providers are offering solid advice to their clients, why do so many companies continue to struggle in this market? Is it the 80/20 rule, regardless of the message only some will take it to heart and benefit from it?
Several months back I held a best practices seminar for a few mortgage shops. My goal was to sit down and talk with several different types of mortgage lenders. I wanted to share experiences, operational best practices, and discuss trends in the industry. This was a chance to get to know one another and hear what we were doing to salvage 2007.
The response was great, 99% of the invitees were excited, and looking forward to meeting and only one person turned me down. The person who turned me down is part of that 20% I mentioned before. This person ran a subsidiary of a very large national bank and asked me “Why do I want to sit in a room with a bunch of competitors, we are doing just fine?”. They obviously had a handle on the changing mortgage market and did not need to hear best practices trends or need to get to know what peers in the industry were doing.
That is why I was shocked, only 15 minutes later, when the financial rags announced that the national bank had Q4 losses of 8-11 billion dollars. Would that person today sit down with his peers and discuss operational best practices now? Chances are no. Two years ago most mortgage lenders, lead providers, etc. would not sit down and chat. It seems to me that no matter how dumb or smart the message only some will take it to heart. Does the 80/20 rule prevail no matter the topic? P.S. I never did call that client back and ask him “How they were doing.”
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I think the 80/20 rule applies in just about everything, but I also feel like the majority of that “80%” is not around anymore. They were weaned out by the fall-out. That said, while it seems like lead management systems are more universally used, they are still under-utilized. It’s all in the implementation, I guess.
Spot on Some Insider, spot on.
I came across the same post, I am big Seth Godin fan. This is always a challenge when dumbing down products. Some products or services need to be dumbed down for simplicity, but I agree with him to extent that dumbing down a product or service too much encourages dumb buyers or clients and therefore increase your companies time assisting the client with the product or service.
You must be stratigic and try to increase the 20% to possibly 30% or 40% without increase customer service charges, low satisfaction in the product, etc.
To your point “Insider” as Noel pointed out the 20% is getting smaller too, not just the 80%.
Just a update on the 20% client i mentioned previously. Today they report 24 more billion in write offs and a thousand people per billion in layoffs. Guess the “I know everything” mentallity doesn’t pay off in the end