VIDEO: Moving Your Customers Up The "80/20 Curve"

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Hey, you know in direct marketing the most important thing there is is a list. The reason that lists matter is lists are the right side of somebody’s curve. Somebody drew a dotted line and they defined a certain kind of behavior and said, “This is a list.” That’s why response lists are so much more valuable than a compiled list.

Sure, you can get a list of all of the homeowners in DuPage County, Illinois, but it’s a heck of a lot more useful to find out who bought a house in the last two years or who subscribed to a certain magazine or who gave to a certain charity.

Now, one of the things that is very interesting as we start to look at this is that your customers, wherever they are, fall on this curve somewhere. They have a certain kind of behavior and they do certain things. The name of the game is to move people from here to here to here to here to here.

To me, the most useful way to think about what you do with a customer, and what you do with a prospect, is moving them up the curve. Remember, this thing gets really steep, and a lot of action can happen with a very small number of people if you have the right process to move them forward.

I think the core principle of all of this is, your number one mission is, to build trust. People need to trust that when they open an email from you it’s good, it’s useful, it’s telling them something that’s the truth. If at any point along the way they decide they really don’t trust you, they’re going to fall off. Do you want them to fall of here? Or do you want them to get to here?

What’s going to happen … I said that when people come to your website or you take a snapshot of anything and you ask people to do one thing, what you did was you marked off … okay, this number of people did something, they did what I asked them to do, this action had a certain number of … amount of value, there was a certain number of people, therefore there was a total amount of dollars that I collected … somehow or another. That’s what it is. But that’s just a snapshot in time.

What is "80" and what is "20" for your business right now? Take my 2-minute quiz and I'll show you where you'll get the highest compound interest on your time and money!

If you go to my website and you look at the Definitive Guide to Google Ad Words page, there’s a $49 version, a $97 version, and a $197 version. The only reason you all know who I am today is because, right out of the gate, I offered three different versions at three different levels so that I could get three different slices of this instead of one. If I had not done that, nobody, none of you would be here. That’s a decision I made five years ago based on understanding this.

If I only had this bottom square, when the water level and the bid prices and the competition and everything got thicker and thicker, I would have drowned just like everybody else did. This is why I didn’t drown.

Then you add other things, later, like coaching programs and seminars and all that. Now you have a back end that sustains a stable business, rather than just this one-time offer. But, that’s a snapshot in time. These people buy the $49 version, these people by the 97, these people buy the 197. Just that snapshot in time ensures that the click, the first click, gets paid for.

That’s just one event, one time. What about later? What about continuity? Who says we can’t make this thing three dimensional? Who says this can’t also extend to, in time, where a certain percentage of people subscribe to a newsletter? Or a coaching program? Or a membership? One of the most successful businesses of all time was the Columbia Record and Tape Club. Buy twelve albums for one penny with nothing more to buy ever, but then they mail you an album unless you send the card back. Brilliant thing. It was designed by Lester Wunderman.

Over time what happens is some customers move a step, and this happens. Something else is some customers move two steps at a time. Some customer moves four steps at a time. Some customers will come in here and they’ll jump all the way to the top. It’s only a small percentage, but this … You don’t have to do any magic tricks for this to happen, but you do need to be aware of it and you need to allow it to happen. It’s a really good idea to let people know what the top is.

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About the Author

Perry Marshall has launched two revolutions in sales and marketing. In Pay-Per-Click advertising, he pioneered best practices and wrote the world's best selling book on Google advertising. And he's driven the 80/20 Principle deeper than any other author, creating a new movement in business.

He is referenced across the Internet and by Harvard Business Review, The New York Times, INC and Forbes Magazine.

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