There is a common saying in business that 80% of your revenue comes from 20% of your customers. In my experience, that saying is true.
Iím not sure if this is original or not (probably not), but Iíd like to propose a new rule. I call it the 20-80 rule. In this instance, 20% of the people you interact with (not just customers) will consume 80% of the time you spend on your business. Let me give you some examples.
A local gentleman left a message on my answering machine. He inherited a collection and wanted it appraised. I get phone calls like this all of the time.
I returned his call 5 times and left voice mail messages. He never returned my call. Finally, I was able to get through to him on a Saturday morning. I could tell he was busy (rustling sounds in the background). He asked if he could call me back in 10 minutes from his cell phone. He was getting into the car to go somewhere. Sure, no problem. After 30 minutes, he still didnít call.
Will I call him back again? No. Why? Because heís going to consume all of my time trying to track him down. It will be another dozen phone calls before I connect with him. Weíll set up at least 4 appointments to meet and heíll cancel at the last minute or just not show up. Can you tell that Iíve been down this path before with other potential sellers?
If he ever calls me back, Iíll be glad to meet him, but Iím not going out of my way. Chances are that he has an ordinary collection (most inherited collections fall into this category). Making multiple phone calls and arranging missed meetings are not on my list of things to do.
In short, I could spend a lot of time trying to buy this collection. In reality, I can buy collections like this every day of the week with much less involvement on my part. Heís part of the 20% of the people who take up 80% of my time.
I mentioned this next case once before. I had a customer who wanted me to identify all of his early US stamps for him (he sent a few and they were all very common issues worth very little). In exchange, he would buy the missing Scott numbers from me with his fixed income. In other words, I would spend a lot of time (hours and days) identifying his common stamps (he said that he had a lot). In exchange, a few months later I might get a few orders for other cheap stamps from him. There was no guarantee that he would buy from me after all the help I would give him. The risk was all mine by investing a lot of time identifying common stamps and in exchange, Iím going to get a few dollars in orders, maybe. Iím not out to be a millionaire, but I can think of many more profitable activities that I could be doing instead.
I can site other instances of both customers and non-customers who fit into this category. If youíre receiving this pricelist, youíre not part of the 20%. Iíve taken steps to reduce that part of my business. Because quite honestly, itís a huge investment of time and many times, itís over a few dollars in business.
To improve myself, Iím getting wiser in eliminating this distraction by those 20% of people who want to use up all of my time. That allows me to serve you better and it improves my well-being.