Have you ever heard of Vilfredo Pareto? No? Me either, until I was in a program for my Master’s Degree. He was an Italian Economist who noticed a pattern in wealth and income. His research showed that 20% of the people he studied held 80% of the wealth in that area, and that 80% shared the remaining 20%. What’s more, he began to see that pattern everywhere.
Look at the shoes in your closet. I bet you wear 20% of them 80% of the time. The other 80% of your shoes sit in the back of the closet until you are feeling crazy one day and pull a pair out and put them on. 80% of your friends you see 20% of the time. The remaining 20% is who you spend the majority of your time with. This law of nature is known as the Pareto Principle or the 80/20 Principle.
The 80/20 Principle and Tourism
I have spent many years in the tourism industry believing that every customer is equally important and that all deserve my time. I would spend as much time speaking with a group leader from a club that was bringing a one time group of 25 retirees, as I would with a tour operator who would bring me multiple tours during the year.
Then I had one of those “Aha” moments when I realized the 80/20 rule was made for salespeople who could never seem to catch up with all their work. I sat down and created a list of all the tour companies that visited my attraction. In some of my jobs, that meant manually looking at bookings and creating a spreadsheet, in other jobs it meant running a report from our database. Either way, I would rank the business from my top client to one who came once several years ago.
At all my sales positions at attractions, I saw the same thing. The top 5-8 clients brought the majority of the business through the door. The remaining dozens, or hundreds of customers were collectively responsible for the remaining 20%. So I changed the way I work. It has helped me increase visitor numbers consistently, and still provide a great level of customer service to all my clients.
Here are some of my strategies:
1. My top clients get my time, my attention, and my money.
I make sure to reach out to my top clients every month. That might mean an office visit, a phone call, or a gift sent to their office. I like to speak with them and see if they have any questions, concerns or if there is anything they need from me. It is important to know multiple people in the office in case there is turnover, and I look for ways to build relationships.
There will be money in my budget to advertise with them. I support their efforts and get additional exposure for my attraction. I do track year over year growth and adjust my advertising budget as necessary.
2. Find the hidden potential
The rest of the list I break down a bit. Tour operators number 9-14 or so are a good place to look for growth. They are already coming and perhaps a few of them might be worth a visit and a follow-up phone call. These are the companies I target at tradeshows, to help build the relationship and to see what I can do to get more sales.
As you go farther down the list, you will see companies that visit sporadically. Make sure they receive any communications you send ( electronically I hope) and that you touch base with them at tradeshows when possible. But that is all that is required.
How to keep the remaining 80% happy:
The key to remember for the 80% is not to ignore them when they call or express interest. When they reach out to you, it is because they want information so they can make a decision about adding you into a tour package. That is a possible sale and that is when you spend time with them. But prioritizing your time and resources to the 20% that will quickly impact your bottom line is what will make you successful.
All your customers are important when they reach out to you, but spend your time using the Pareto Principle to grow your business.
Some additional resources.
You already read my blog, so that is a great place to start. My favorite book on this subject is The 80/20 Principle by Richard Koch. It is easy to read, and it will help you take action.
Schedule a 1 hour consulting call with me to talk over your 80/20 questions. I can help you find your most important customers, and figure out how to grow their numbers. Click here to schedule a call today!
*There are affiliate links in this post. If you purchase something, I get a small commission. This does not affect your pricing at all.