Skyrocket Your Success Using Price’s Law for Your Sales and Marketing (+examples)

Your Strategic Marketing Partner refers to Prices Law for sales and the Pareto principle often.

That is, your biggest results in life often come from focusing on doing more higher-value activities. Price's Law for sales and the Pareto principle are similar, but very different.

What is Price's Law for Sales?
Price's Law for sales says that the square root of the total number of sales people produce 50% of the sales results.
For example, if your company has 10,000 sales people, 50% of the sales are made by 100 of the sales people (square root of 10,000 is 100).

The Pareto principle is also called the Law of 80/20. It says that 20% of your activities bring you 80% of your results. You probably know this already.

But you may not know the power of Price's law for sales.

And that is the purpose of this article, which will be a game changer for you.

Let's quickly review the Pareto principle, then look at how Price's Law in sales works, followed by some examples.

Price's law for sales with examples

Just as a helpful recap, the Pareto principle is also called the Law of 80/20. It says that 20% of your activities bring you 80% of your results.

Said another way, 80% of your activities bring you 20% of your results.

That is, 20% of your sales efforts bring you 80% of your sales.

20% of your customer list brings you 80% of your sales revenue.

The Law of 80/20 is infamous and implemented by the highest achievers as a framework for how they structure their time, energy and limited resources.

You probably use the Law of 80/20 already. But if you don’t, it simply makes sense to isolate the top 20% of your highest value campaigns, customers and sales.

The Pareto Principle gets even more powerful when you understand Price's Law for Sales.

In fact, Price's Law is another, lesser-known and possibly more powerful productivity principle.

That’s because Price's Law for sales focuses on actual results, not just the activities.

And it says that 50% of the work is completed by a small group.

Specifically (and for the fellow math geeks), Price’s Law in sales says that the square root of the total number of sales people produces 50% of the actual sales.

For example, if your office has 40 employees, 6 create 50% of the output.

  • If there are 10,000 employees, just 100 create 50% of the results.
  • Think about a 10-person sales team… Do the top 3 create 50% of the sales?

Probably.

That’s Price’s Law.

Here’s a big macro example … who holds 50% of all the money?

Arguably, there’s about 15-20 leading banks such as US Bank, PNC, HSBC and Capital One. But only 4 banks; Chase, Bank of America, Wells Fargo and Citigroup hold 50% of the money. This is, the square root of 16 = 4.

Price’s Law also clearly applies in the sports world. At the time of this writing, the top 10 tennis ATP money makers, starting with Rafael Nadal (#1) thru Gael Monfils (#10), collectively have earned $74.7 million in prize money in 2019.

How much have the top 3 earned this year?

A whopping $38 million.

That’s 51% earned by this talented group known as “the square root” of tennis’s top 10 money earners.

This is Price’s Law for sales in action.

What does this have to do with Your Strategic Marketing Partner, productivity and your ability to earn an outstanding income from your sales efforts?

More than you might think.

Chances are high you are a highly productive person now (because highly productive people tend to engage with Your Strategic Marketing Partner), but if you aren’t there just yet, decide now to get into the top group of productive sales and marketing people in your workplace.

That is, the small group that produces the most results.

How?

Ask around the organization who the most productive people are. Apply Price's Law.

Ask the bookkeepers, HR, the VP’s, the CEO, the owner and the front desk staff. Find out why the top sales people are. The square root will organically start to emerge to the top.

Now use Price's Law for sales to your advantage. Again, chances are this may already be you. But, whether it is or isn’t, take the most productive people out to lunch. Find out what they are doing and why they are so productive.

Then, focus on doing what you are best at and do more of it.

Combine your skills with strategies that the most productive people do (learned from your lunch meetings).

And get to work.

Soon, you’ll be the one known as, “The most productive person in the office.”

If you need anything along the way, we are happy to help!

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