80/20 Sales and Marketing (Perry Marshall) – Book Notes

This is definitely an all-time classic and must read for Internet Marketers as well as anyone in general. I literally start off each work day and determine WHAT is the 80/20 needle mover that I can implement today.

1. How 80/20 Works and Why

  • 80/20 applies to everything in the world that has positive feedback, from the income of 7 billion people to the Forbes 400.
  • Almost everyone talks about average, but average equals mediocrity. The 80/20 power curve is about results.
  • Top performers are not twice as good as average performers. They are more like 100 times better.
  • Everything that really matters in business isn’t linear, it’s exponential. 80/20 is about power laws. Powers of 10. Always think in multiples of 10.
  • 80/20 is everywhere you look; you can’t do anything about it because it’s a law of nature. all you can do is decide if you want to let it work for you or against you.
  • The 80/20 power curve is the most important chart in any business
  • The power curve is true whether you’re looking at 10 people or 10 billion.
  • Your top job as an 80/20 marketing professional is to move resources from the left to the right of the curve. (Offering bigger opportunities).

2. Racking The Shotgun

  • Send 1 calculated signal that most ignore, but a few respond.
    • That move, someone else might make it, you just have to then watch.
    • This separates that 80% from the 20%.
  • Before spending precious time/money on any sales, marketing, or business endeavor, you need to rack the shotgun.
  • People are self-identifying as the right targets or the wrong targets for you 24 hours a day.
  • It’s not just about customers; it’s about everything that makes money change hands: product lines you choose to sell, web pages you optimize, systems, etc.
  • Pareto Summary
    • “Rack the shotgun” means triggering your audience and seeing who responds.
    • Before betting time/money, must rack the shotgun.

3. You Can Do Better

  • If you can spend 80 percent of your time in front of the right people, you can triple your income.
  • Direct marketing, if he spent his time and money on racking the shotgun and paying attention to whose head whipped around, and rejected cold calling, he’d
    • Spend far more time having actual conversations with qualified prospects
    • They’d respect him much more
  • Laser focus on prospects that already understand what you do, have problems you can solve, and believe in your way of solving them.
  • Pareto Summary
    • 80/20 applies to almost everything in business that you can count.
    • Almost every frustration you have in sales has something to do with ignoring 80/20.

4. 80/20 Traffic, Where you go to get Customers

  • No cold calling. Ever. Attempt to sell to only warm leads.
  • Before you try to sell anything, you must know how much you’re willing to pay to get a new customer.
  • A prospect who “finds” you first is much more likely to buy from you than if you find him.
  • You’ll dramatically enhance your credibility as a salesperson by authoring, speaking, and publishing quality information.
  • Generate leads with information about solving problems, not information about the product itself.
  • You can attain the best negotiating position with customers only when your marketing generates “deal flow” that exceeds your capacity.
  • The most valuable asset you own is a well-maintained customer database, because people who’ve already bought from you are way easier to sell to than strangers.
  • Four questions to ask for Marketing 101:
    • Who would buy this
    • What can we say to persuade them to buy
    • Can you reach them affordably
    • Can they give you money?
  • The next thing to notice is you need to go counterclockwise to decide how to sell something
    • So the primary skill you must master in marketing is thinking backward
    • Think like the client, not you.
    • Begin with the end in mind – you start at the end and work your way backward.
  • Advanced marketers don’t start with the invention – they start with “What would people buy”. Then create it or find it.

5. 80/20 Conversion

  • With a list, most people dive right into persuasion an salesmanship, that’s a mistake, Because even after you’ve stimulated interest and positioned yourself properly, another step is needed before you try to convince anybody of anything: You must DISQUALIFY people who don’t fit. Sales is NOT a “convincing people” process!
  • The 5 power Disqualifiers
    • Do they have the money?
    • Do they have a bleeding neck?
      • A dire sense of urgency, an immediate problem that needs attention. Right now. It should be :Pain & great inconvenience, loss of money, threat of loss and/or some craving for pleasure that borders on the irrational. Before you ease the pain, you have to intensify it.
    • Do they buy into your USP?
      • It’s your unique answer to these questions What does your product do that nobody else’s product does? Why should I buy from you instead of anybody else? What guarantee can you make that nobody else can make? And remember, your USP must constantly be improving
    • Do they have the ability to say YES? the receptionist can say no, but she can’t say yes.
    • Does what you sell fit in with their overall plans?
      • If your service requires major brain surgery on the part of the customer, he ain’t gonna take your offer unless brain surgery is a lot less painful than the alternative.
  • The most important thing of these 5? Plow thru them as fast as possible. If you’re talking to your prospect on the phone, you need to start with your USP.
    • Include as many power disqualifies as possible
    • Get straight to the point and no corporate MBA speak.
  • For copywriting, you can go through the above disqualifiers
    • Headline starts with their bleeding neck and offers a benefit statement
    • Emotionally connect with them – offer a page of your diary that will look a lot like their diary
    • Add pain and suffering (agitate)
    • Note: headlines, italics, highlights, and bold emphasize the most important 20 percent for people who are skimming.
    • For do they have the money, charge a few bucks for shipping/handling – it will eliminate tire kickers but not eliminate that many buyers.
    • Add a call to action.
  • As long as you’re reading a page in their own diary and speaking to them about the most painful things in their life, you’re racking the shotgun.

6. Your USP

  • Four questions your USP Can and Should Answer
    • Why Should I listen to you?
    • Why should I do business with you instead of anybody and everybody else?
    • What can your product do for me that no other product can do?
    • What can you guarantee me that nobody else can guarantee?
  • Each Product you sell should have it’s own USP, but you can have a personal USP that stands distinct from your product or business. It’s the inherent groove based on your passion, personality, and experiences that you carry with you at all times.
  • If you want to be a successful marketer:
    • Put yourself in a position where you get paid to practice, even if it’s only a modest amount of money
    • Learn to love repeating even basic things over and over again until you achieve perfection
    • Don’t fall in love with bright shiny objects; fall in love with mastery.
    • Master some aspect of marketing or sales that you naturally love and excel at – harnessing the natural forces of who you are.
    • Most important thing in marketing is a USP
    • Your business USP is an extension of your personal USP
  • The core question people ask when they pay money is “What problem can you solve that nobody else can solve?”
  • A Power USP makes every high-end sale a takeaway sale, which means customers are chasing you – you’re not chasing them.
  • Master Formula for a Power USP
    • If you are (qualifying type of customer or company) and if you (commit X dollars and follow steps Y and Z), then you will achieve (specific results) or else (penalty to me, your vendor).

7. It’s Not Failure. It’s Testing.

  • Whenever you have something in your sales funnel that’s not working, just break it down into pieces and make the 1st piece work. Look at it as an experiment that didn’t work.
  • If you can’t sell a product, see if you can give it away. Or part of it. If they won’t take the free item, find out why.
  • Split test every stage in the purchase pipeline

8. Scale Up – Massively

  • How fast can you go from zero to dominating a market? As fast as you can split test.
  • Secret of banner ads? Test 50 ads. One of them’s going to be a crazy winner.
  • You can optimize most of your sales funnel by optimizing a handful of vitally important web pages. The rest can just be “good enough”, at least for now.
  • As for perfection: 80/20 inherently means that “good enough is good enough.” When you embrace 80/20 there’s always going to be some unfinished detail. Sometimes this will bother you But do you want perfection, or success?
  • There will always be something in your success formula that demands perfection. You can become successful and even famous by achieving perfection in one tiny corner of your world. And everything else just needs to be “good enough”.
  • Accept imperfection and move on to higher value tasks.
  • how you expand: start with the place of highest leverage (people don’t buy brake pads on FB) and test with consistent traffic, which is highly targeted paid advertising. And expand from there.
  • When you have the best conversion rate in your niche, you can buy all the traffic from everybody.

9. Make more from every customer

  • At any given price point, 20 percent of the people will spend 4x the money.
  • 80/20 says 20 percent of the people will spend 4 times the money. And 4 percent of the people will spend 16 times the money.
  • When you look at your past buyers, the 80/20 appeals to:
    • Repeat buys: of the people who buy more than once, 20 percent of them are responsible for 80 percent of the repeat purchases
    • Money, Quantity, Diversity of your products.
  • You can’t sell the same cup of coffee for $1 to some and $10 to others. But the point of the Power Curve is if coffee is the itch, the range of expense they’ll go to scratch it is huge.
    • The initial $1 cup of coffee is a rack-the-shotgun exercise.
  • Starbucks transformed hokum coffee into an experience, Any business can be transformed this way – a “gourmet” version is always possible.

10. Power Guarantees

  • If you want to command higher prices than anyone else, then guarantee better results than anyone else.
  • if you won’t take the risk and stand behind your product, why should the customer do that? Because he’s essentially doing that by buying it from you.
  • If it doesn’t make your stomach churn, it’s probably not an awesome guarantee
  • If you’re selling for a company that lacks the will or ability to guarantee results, get yourself a different job.
  • Master Formula for a Power USP
    • If you are (qualifying type of customer or company) and if you (commit X dollars and follow steps Y and Z), then you will achieve (specific results) or else (penalty to me, your vendor).
  • The essence of getting more money for what you sell is “Sell results, not procedures.”
    • Any time you want to figure out how to get more money for what you sell, ask yourself this question:
    • “How do I make what I give my customer more of a finished result and less of a procedure?”

11. Feedback Loop Forces

  • Positive feedback is when past action reinforces future action in the same direction. (Reinforcement)
    • A 14 year old boy take his first drink of Jack Daniels and likes it. 30 years and 10,000 drinks later, he’s an alcoholic.
    • An 11 year old girl gets a standing ovation at her piano recital. She drinks in the applause and 25 years later she plays a symphony at Lincoln center in Manhattan.
  • Positive feedback is the root cause of chaos.
    • Just as water transforms a slight indentation into the Grand Canyon, 80/20 amplifies your own power.
  • Positive Feedback is Pheonminally Powerful
    • Turning up a PA system too loud or putting a mic too close to a speaker, the energy grows exponentially
    • There’s a threshold that once you go over it slightly or under it slightly, it makes all the difference
      • It’s a leverage point in the system, a place where tiny effort generates a big result.
  • You get good at 80/20 by learning to identify the leverage points.
  • Negative feedback corrects errors, like a missile guidance system. (Correction)
  • Any time you have positive feedback, you get 80/20 behavior
  • 80/20 is about harnessing natural forces. The same laws that make rivers, canyons, and sand dunes will also help you sell more and make more, if you let them. Wherever possible, let nature amplify your efforts by leveraging positive feedback and the patterns it creates.
  • Rewarding people over time is just as powerful as water flowing on rock.

12. 80/20 Market Research

  • Never go into a market unless you can write a page of your customer’s diary and be so spooky-accurate that they wonder: “Hey were you spying on me?”
  • Ask If you could advertise on only ONE keyword phrase online, what would it be?
    • If you had to describe your business using only ONE search phrase, what would it be?
  • For language and questions, find it in social media. It’s better for listening than talking
  • Google’s keyword tool tells you how many people are searching for solutions.
  • When you solve the most urgent problems that the most responsive 5 percent are searching for, you hit pay dirt.

13. 80/20 Tracking

  • An time you have a complex business with lots of moving parts, you can make a simple matrix that shows you which small hinges swing big doors.
  • You can optimize half of your process by optimizing the most important 5 percent.
  • Once you’ve optimized Traffic and Conversion, turn your focus back to Economics.
  • You can find thousands of things to measure, test, and optimize, but at any given time, only 3 to 4 really matter.
  • You can grow your business 50 percent by optimizing the most important 1 percent.
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