A highly profitable distraction: the 80-30 Rule
Time and again I ask my CPA clients to run a Revenue by Customer Summary Report and toss the results on a graph.
It looks the same every time.
80% of clients generate 30% of revenue.
Which means
20% of clients generate 70% of revenue.
…
These CPAs could let go of 80% of their clients and keep 70% of their revenue.
…
Does it always look exactly like that?
Of course not, not exactly.
Sometimes, it’s even more outbalanced.
Precision aside, the pattern is clear.
…
When was the last time you graphed your clients this way?
I hope you’ll grant yourself this 15-minute “distraction.”
For some, seeing it there on paper, changes everything.
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