Experience has made me slightly cynical about people quoting statistics to support their points. However, there are TWO statistics that I must confess I always quote:

1. The 80/20 rule or the Pareto principle (as its formally known) states that, for many events, roughly 80% of the effects come from 20% of the causes. I’ve seen this so many times over the years, e.g. 80% of revenue coming from 20% of customers, 80% of support calls coming from 20% of the customers, etc… It’s a great rule of thumb.
2. The 3% Rule refers to the likely number of individuals and companies who are actively in BUYING mode. I like it because it’s a low figure and this resonates with me and my own experiences throughout my selling career.

Resonance Matters

When you hear something that is familiar to you and reflects your own experience, you are much more likely to believe it’s true. Unsurprisingly, it’s the same for your potential customers. Therefore, if you are making outlandish claims about your products or services, consider the potential negative impact that, let’s say, slightly more aspirational statistics may have!

When I speak to prospective clients, I often refer to the 3% Rule, before explaining the concept of active buyers. These are the people who have a clear need and who are actively looking for a provider to help them, typically within the next month or so.

The response I often get to such a low percentage is one of disappointment. The enormity of the sales challenge simply comes crushing in around them…However, it’s really not that bad. Now, we are at least beginning to understand the TRUE sales cycle, or more accurately the true BUYING cycle. It empowers us to put our efforts and resources into the right places at the right times.

I have outlined 3 stages which I hope will help you plan your effective selling strategies:

Stage 1 – If they are ready. Sell!

It’s important to get in front of the 3% sooner rather than later, but how do we identify them I hear you ask? The answer is twofold. Firstly, be clear on your value proposition, so that when they see your service offering, it “resonates” with them. Then make sure your target audience gets to see your message.

Stage 2 – If they are not quite ready. Nurture!

Now, you have another group to focus on. The next 7% intend to change, have a need, but perhaps aren’t proactively searching for options. Getting your message in front of these prospects can be very effective as they are potentially receptive to new ideas. The next 30% (or so) may also have a need. HOWEVER, this need may not be pressing enough to encourage them to act. This is where nurturing comes in. Make sure you provide regular, meaningful contact moving forward to ensure you are on their radar when the time comes for them to act.

Stage 3 – If they are not going to buy. Qualify them Out!

The next 60% is going to be a mixture of people who do not have a need or who are happy with the service their partner is providing. It’s as important to qualify people and companies OUT, as it is to qualify them IN.

Don’t waste too much of your marketing budget on these people. Your message won’t resonate with everyone. Focus your energies on the people who have the highest chance of engaging with you.

I hope this gives you a better understanding of the relationship between sales and buying cycles.

Good luck adding value,

David