I remember 1997 I got the opportunity to hear a man named Roger Sitkins speak for the first time, and he changed my life. He told me about this little known Italian economist who had an agrarian philosophy, called the Pareto principle was named after himself. Other people have heard of it called the 80/20.
The 80/20 Rule of Thumb
What Roger said was the invariably in any business, any agents book of business 80% of his revenue, commissions, came from 20% of his customers. He challenged us to go and figure out if that were true and get rid of the bottom 80% of our customers, keep the top 80% of our revenue.
What this 80/20 Meant for My Agency
So, on January 3, 1997, I printed my commission statement I ran down 80% of my total, I drew a red line across the bottom and with a pair of scissors, I cut the page in half, I took the bottom part of page, gave it to somebody else and said, I never want to see these people again. They're now your customers.
So, I always love to ask the question to people how long they think it took me to make that money back. It took me until February 13th. I've been doing that every year in my business ever since then. And it's the number one secret to building a really large book of business.
Continually upsell yourself and focusing on growth by focusing on the people who pay you the most money.
So it's addition by subtraction. It's growing your business by eliminating the customers who don't pay you very much. They're probably wonderful clients or customers for someone else, but your people in the future are going to be bigger, always
I remember in January and February after I had made that decision, my phone wouldn't ring, and I didn't have a lot to do for a little bit. It was uncomfortable. Because, we're all creatures of habits, and I was being driven to mediocrity by my mediocre habits. It was very, very tempting to run back to those for a while. But, I persevered, and pretty soon I found that I was busy again, but now I was busy talking to people who were paying me a whole lot more money, and who I enjoyed because the level of the relationship was better.
Giving Others the Opportunity to Create Growth
It's about focus, and, even in your agency, it's about giving other people a great opportunity to pursue their gifts. So the people that I no longer took care of, I used to seed a new producers' business, to help him get started. I encouraged him then to do something just like I had done after a couple of years in the business.
Use Your Unique Ability to Create Growth
Dan Sullivan's business, the Strategic Coach has a concept called Unique Ability. It's the idea that all of us do one or two things well. We also do a few other things well, and there's a lot of things we don't do well at all. When you sit down and you figure out, "Okay, this is the thing that I'm gifted at. It's the thing that drives the income that I make, the success that I have, the happiness that I enjoy", and you realize that you're only spending 10 or 20% of your time doing that. The rest of your time doing other things that maybe someone else could do because they love doing them and making that change.
It's fascinating what happens, your personal growth as well as your financial growth, just absolutely skyrocket. The 80/20 principle applies in personal life and in your relationships in every other way just as it does with your money.