Don’t Be Fooled by the 80/20 Rule

May 2008
by Curt Matthews

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Don’t Be Fooled by the 80/20 Rule

by Curt Matthews

Hard-headed business people love to talk about the 80/20 rule: 80 percent of your sales usually come from 20 percent of your customers, or 20 percent of your products. It follows from this insight that serious players pay much more attention (mathematically, it should be four times as much attention) to the customers or products that produce the most sales. The real hard guys dump the low performers altogether.

Here at IPG/Trafalgar Square, we are pursuing a contrarian approach. It’s clear that we do a highly competent job with our high-profile products and customers. They, of course, command a great deal of our attention and effort and will continue to do so. But how well do we do with the low-profile products and customers? Such sales are costly to make. Wouldn’t both IPG and its distributed publishers be better off if we concentrated on the high-volume sales?

This approach might be right for widgets, but it is wrong for books, for two reasons.

The financial health of publishers depends heavily on selling out print runs. Titles must, if possible, be kept alive until the last copies go out the door. While an unsold copy might be a dead loss of its $2 production cost, that same copy sold might bring $8 back…IBPA Members – Click here to view the full article (login required).

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