80/20 Sales and Marketing, by Perry Marshall

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Perry Marshall’s book is all about Pareto’s Principle and Power Curves. Although the author tries to reason the logic under the principle, the value of this book is in the online marketing and sales tactics it offers.

The book covers topics like market discovery, getting traffic, conversion and selling. “To build a sales funnel, you begin with the end in mind.” Since selling starts with traffic, advanced marketers don’t begin with the invention (i.e., the final transaction). “They begin by asking: ‘what would these people want to buy?’ Then they create it or find it.”

Before trying to convince anybody of anything, however, you must disqualify people who don’t fit. Marshall explains what he calls the 5 Power Disqualifiers. They define who of the traffic you are going to buy:

Do they have money? (…) Do they have a bleeding neck? (A dire sense of urgency, an immediate problem that demands to be solved. Right. Now.) (…) Do they buy into you unique selling proposition? (…) Do they have the ability to say YES? (…) Does what you sell fit in with their overall plans?

The three steps to selling anything, according to Marshall, is what he calls the Power Triangle:

  • Get Traffic. Who would buy this?
  • Conversion. What can we say to persuade them to buy?
  • Economics. Can you reach them affordably? Can they give you money?

The Power Triangle can be applied to each corner of the Power Triangle itself, again and again. For example, to get traffic, you should think about traffic in terms of traffic, conversion, and economics. “There is a Power Triangle inside each element of the Triangle."1

Marshall’s approach finding customer needs and effective marketing actions is to test, test, and test. Test fast. Fail fast. Move on.

“You send a calculated signal that most ignore, but a few respond to. (…) Before you bet your precious time or money on any sales or business project, you need to rack the shotgun.”

The best place to start testing, Marshall argues, is Google Adwords. Test ads. Test landing pages. Test sign-up pages. Test everything. Then, scale up.

Marshall offers some insights about the Bull’s-Eye Social Media Technique, a method developed by Glenn Livingston to narrow your field of competitors and focus on the exact “corner of the internet”.

Finally, Pareto’s principle should be applied to analyzing your client portfolio. Which 20 percent of your clients make the 80 percent of your sales. Marshall goes deeper and proposes three variables that must be considered in the analysis in addition to gross sales: Recency (when was the last time this customer bought something), Frequency (how often does the customer buys from us), and Money (how much does he buy). He then uses this additional variables to build a scoring system and applies Pareto’s Principle to the results.

Although I didn’t like Marshall’s writing style and I found the hype around the 80/20 Principle somewhat excessive, this is a useful book. It will get you up to speed on modern marketing techniques, specially regarding to online sales and advertising.

Find 80/20 Sales and Marketing in Amazon.

  1. What Marshall calls Power Triangle is a Sierpinski Triangle, a fractal with the overall shape of an equilateral triangle, subdivided recursively into smaller equilateral triangles. 
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