Have you heard of the Pareto Principle? Or maybe you know it by its other name… The 80/20 Rule?
This is a pattern that was first identified by an Italian economist Vilifredo Pareto in 1896. He first noticed that 80 percent of the land in Italy was owned by 20 percent of the population. Then, when he realized that 20% of the pea pods in his garden produced 80% of the peas, the pattern started to appear everywhere, both in nature and beyond — at every level of existence! For example, astronomers have noticed that the sizes of craters on the moon conform to Pareto!
But what does this have to do with your business? Well, Pareto’s principle appears wherever you look in business too.
For example, it is very likely that:
But when we look closer at profits, a more dramatic pattern emerges! The pattern is that very often your top 20% most profitable customers will actually account for around 110% of your profits!
How is that possible? Well, most businesses (of a certain size) actually lose money selling to the bottom 20% of customers! So the simplest and easiest way you can boost your profits by 10% or more is this: Fire the customers that cost you money! Sounds counter-intuitive, I know, but sometimes you can increase your profits by getting rid of customers..
Consider the opportunity-cost. Even though these are paying customers, they also take up far more of your sales team’s time, may habitually beat you down on price, and then need significantly more support than the majority. If some of these costs are overheads they can be difficult to quantify.
But to fire these accounts can free up your valuable resources, which can be then put to better use serving more profitable customers, thus generating additional profits.
But let me qualify that piece of advice I just gave you: It is a simple way to boost your profits- provided that you know exactly how much you make from every sale to every customer, you know all associated costs, and can see at a glance whether you’re making a profit or a loss.
If you don’t have that information at your fingertips schedule a call today and see how you could take your business into a new level of profitability.
How much time do you waste every week searching for emails?
Wouldn’t it be great if you could just wave goodbye to lost emails?
Well, we long ago introduced a feature into RedHorse that everyone appreciates. It’s so incredibly simple, and yet our customers go crazy for it.
What this feature does is automatically associate every email message that comes through the system with everything the message relates to.
And it makes it super-easy to find that email at any time in the future.
So let’s say you get an email
In RedHorse, you will be able to pull up all emails related to any of those things and find the message you need fast!
So if you navigate to a Customer in RedHorse, you’ll see ALL the emails and attachments related to that customer, even if that email was filed in a different folder.
Plus, any future replies to messages will also get tagged in exactly the same way — automatically!
Even if team members change, and even if you can’t remember everyone who was involved in a project, you’ll always be able to see all the relevant emails you need.
So no more lost messages, no more missing attachments, no more hunting through folders.
Just instant access to the information you need, when you need it, so you can get on with doing what you do best.
It’s a simple, common sense feature. But to Mike McDermott at Sierra School Equipment Company, it’s a big deal!
“One of the biggest benefits of RedHorse was that we were able to link a message to multiple contacts. Sometimes you may not remember who the email went to initially, but now if you’ve linked it to multiple people, you can go to any of those people’s contact records and it’s there. It definitely saves us time.”
Mike is not alone in seeing how this powerful little feature saves time, money, and stress. Chris Hayes at Northstar Home Technologies agrees.
“I can tell you right now, my old company didn’t have RedHorse, but if they had, the email tracking alone would have saved them a lot of headaches.”
If you’re still wasting time hunting for important email messages — stop! There is a better way.
You know how people love to repeat the old cliché, “Time is money”?
Well, it’s a cliché because it’s true. And if you are someone who’s willing to do what needs to be done to improve the way your business functions (and I think you are), here’s a little exercise for you…
First, take the total wage bill for your team, and divide it by the total number of hours actually worked (so excluding breaks and vacations) and you’ll get a mean hourly rate for your staff. (If you really want to scare yourself, factor in the hourly rates for any chargeable resources you have, such as consultants or contractors!)
Next, for one week, make a habit of looking out for any occasion where you spot someone doing something that maybe doesn’t have to be done. Make a note of the unnecessary task. Make a note of how many minutes that task took, and how many people were involved. Then multiply the total time by your mean hourly rate and you’ll get a dollar amount. This represents how much your business has paid for that unnecessary task to be done.
You’ll probably end up with things like:
“Contractor on-site phones in for alarm code”
(30 minutes, 2 people, $22)
“Admin searching for missing email”
(10 minutes, $10)
“Going through client list to identify services due”
(90 minutes, 3 people, $175)
At the end of the week, total up the cost to you of all those unnecessary tasks.
When you write down the real costs to your business as a BILL, you start to realize how much money we can waste through inefficiency! And remember those were just the ones you noticed!
My tip: before you ask how you can reach more prospects, get more sales, or increase your delivery throughput, consider how you can reduce your hidden costs instead.
RedHorse can help you reduce inefficiency by organizing your shared information and automating routine tasks.
We can help you. Schedule an appointment.