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The 20-50-30 Rule

Dirk Zeller

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We have all been exposed to the 80/20 rule. This rule states that 80% of our results come from 20% of our labor, or 80% of our income will come from 20% of our clients. When this rule is learned and applied, it is a powerful tool towards success.

There is another rule, which I have applied with great results throughout my sales career. It is more powerful but less known than the 80/20 rule. It is the 20/50/30 rule. Let's take an in depth look at this rule.

In the 20/50/30 rule, the 20% is made up of the people who will do business with you easily. These 20% are people with whom you have already built trust and rapport. They have belief and faith that what you say is true. They believe that you are skilled at what you do, and they would be pleased to work with you. They often treat other professionals in other fields with respect, as well. These types of clients and prospects are like gold. This 20% is a pleasure to do business with. They can come from any source such as open houses or by prospecting. They could also be a past client or referral.

The next group is the 50% of people who are on the fence. This group, upon receiving a solid presentation and systematic approach, moves towards your side of the fence. But it takes sufficient data and reasoning to get them to commit to buying or selling a home. This group, after careful evaluation of the data, will make a decision based on how it will benefit them. Having a benefit-based listing presentation is crucial to landing this type of prospect. This group is where the majority of your prospects will reside. You just need to apply solid sales skills, and these prospects will become like the “golden" 20%.

The final group, which is the group that 30% of people fall into, is the most dangerous group. This group demands tremendous amounts of energy and time to convince them to join your side of the fence. This 30% is highly demanding and often has limited respect for the services provided by others. Even with a solid service presentation, they often demand more from a sales person than the other two groups do.

During my career, once I determined an individual was in this 30%, I would throw the lead away because the conversion ratio of this group is very low. A large amount of time can be invested on people in this 30%, which will equal low payoff and high frustration. I am not sure if this group can be satisfied even if everything goes perfectly. My advice is run away from prospects and clients in this group, fast!!

We, as sales people, cannot help everyone. Why not just focus on the easy 20%, the 20% that is truly in your corner rooting for you? Then move to the 50%, which takes a little selling of yourself and the benefits of working with you. These categories will provide more income and less frustration. You will have a more enjoyable experience providing your service to these two groups than the 30% group.

Next time you speak with a prospect or client there are three questions to ask yourself. The first question is which category are they in? Next ask how can I move them into the 20% if they are not already in it? And finally, how much effort and energy will my team and I invest in moving them to the 20%? Once you have asked those questions, determine what the odds are that they will convert. Is the effort worth the reward? By asking these questions you will be applying the 20/50/30 rule effectively. Your efficiency and income will increase in your business.

Dirk Zeller is an Agent, an Investor, and the President & CEO of Real Estate Champions. His company trains more than 250,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters. He's the widely published author of Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, The Champion Agent Team, Telephone Sales for Dummies®, and over 300 articles in print.

Real Estate Champions is a premier coaching company. Training covers a wide spectrum from new agents, to seasoned, as well as those interested in real estate marketing or real estate investing.

You can get more information at Real Estate Coaching , Free Resources for Realtors


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