The Miracle of the Twenty Percenters – and How to Achieve More With Less
by Ben M. Bartlett
If you can get your head around what I will share with you today…and effectively implement the suggestions I give you – your business performance levels and productivity will soar. That’s a promise. Actually, what I”m sharing with you is a key principle of strategy and high performance, so read carefully.
Firstly though, take a look at this graphic regarding Coca Cola Enterprises and its North American sales figures:
What you’ve just read is an economic and scientific miracle in action. It’s the miracle of the twenty percenter. Let me explain.
With Coca Cola Enterprises the company markets over 200 products, including Fanta, Sprite and Powerade, yet fewer than ten of its products – i.e The Coke range that includes Coke, Diet Coke and Cherry Coke – account for around 60% of its sales in North America.
Coca Cola’s highest-selling Coke range is what I call a twenty percenter – it’s a core input that generates outstanding results far in excess of that input. It’s Pareto’s 80/20 principle in action.
Interestingly, look closely at the performance of other high-profile companies and you will find many more instances of the twenty percenter in action. Take Microsoft for example. From its 2009 annual financial results Microsoft’s Windows OEM licenses accounted for 80% of Windows revenues while Microsoft Office accounted for 90% of sales in Microsoft’s business division.
The reality is this. With regards to your products it is highly likely that twenty percenters rule the roost. And the flipside to this? Most of your products are probably huge underperformers.
Onto the next graphic..
This very old advertisement just happens to be one of the most successful print advertisements ever created in the history of advertising and marketing.
In marketing this advertisement is what is known as a control. By way of definition, a marketing control is an advertisement, marketing campaign, sales script or presentation that produces extra-ordinary results in terms of sales, sales leads or other related KPIs. It’s a twenty percenter in other words. In the case of this particular advertisement it ran, largely unchanged, for more than 30 years, and earned the US School of Music millions of dollars in revenue over that period. And, the ad also made its writer – John Caples – very famous.
When a marketer develops a control, it’s a lot like writing a hit song. A songwriter writes a song…it gets recorded and becomes a hit…and then the writer receives ongoing royalties from that song for years on end. Likewise, when a marketer creates a twenty percenter campaign it produces results for months or even years on end. For instance in 1994 I created a control campaign for a client that ran successfully for four years with very few changes.
Now when it comes to songwriting, not every song a successful songwriter writes will become a hit. They have to write a lot of songs just to be able to create their twenty percenters. Same thing with marketing. You have to create a bunch of different campaigns to identify your twenty percenters.
In summary, here are the key suggestions I want to make. They are critical if you want to get and remain in the high performance green zone.
- A small percentage of your products will generate 80% of your revenue, while most of your products will generate marginal returns or losses.
- A small percentage of your marketing initiatives will account for 80% of your results, while most of your marketing initiatives will generate marginal returns or losses.
- You need to apply the 80/20/80 rule to your products and marketing initiatives.
- Don’t be afraid to cut your losses quickly. You will likely save time, hassle, headaches and money by ditching the under-performers.
- Your mission in business is to identify, create and develop twenty percenters. In this case, twenty percenter products and twenty percenter marketing campaigns.
- And as is often the case, you will have to go through a bit of trial, error, testing and frustration to get your twenty percenters. Yes, not every product you create will be a success and most will give you only marginal returns. But the golden ones – the twenty percenters – will more than make up for the average performers.
As stated at the start of this lesson, the twenty percenter principle is a key component of strategy and high performance Not only that, it takes the 80/20 principle and 80/20/20 rule to another level. So, to get into that green zone you need to learn and apply the miracle of the twenty percenter.