The 80:20 Rule

After reading the Drapers article 'Live the 80:20 rule to priorities resources' it surprised me at how low the amount of customers was that keeps a business going, whether this be within in a retail store, supplier or manufacture. The 80:20 rule is that 80% of a companies business only comes from 20% of their customers/client.

Drapers argue that this is because within any job role there is so many tasks and duties that you have to do within your working hours so chasing new clients/ selling to customers takes a back seat for a period of time in the working day, their answer is to prioritise resources and change habits in times of crisis and this then creates opportunities.

I do agree that within any job roles there is many daily tasks that takes a big chunk of the working day that takes you from your daily role which most likely within retail, will be selling to customers on a shop floor or gaining and retaining contracts with suppliers and manufactures.

So do this mean that companies should be prepared to hire more staff. Hiring more staff would mean that more customers can gain that service they require leading to sales, and companies can chase more contracts bringing in more money for business. In turn meaning that companies could expand and employ and train more staff which the economy could benefit from lowering the amount of un-employed and developing retails workforece skills.

Or would this make the market too competitive? and make the expectation of customers and working relationships too high and the admin and day to day jobs that keep a business ruining would be forgot about causing possibly, a costly mistake to a business.

In my opinion it is mix of both drapers answer and my thoughts, yes prioritising job tasks and being organised is vital and is skill that companies look for when employing, but i also believe that employing more staff to help with customers and and client relationships. Bringing in and retaining customers is vital and business should be prepared to invest to achieve.

To read the Drapers article for yourself please visit: http://www.drapersonline.com/The report is written by Paul Alger - Director of International Affairs at the UK Fashion & Textile Association. 30/09/2011