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Use the 80/20 rule to retain your best clients and gain new ones

The 80/20 rule

In your practice, a vital few of your clients drive a disproportionate amount of your business. The Pareto Principle, or “80/20 Rule” as it is frequently called, affirms that 20% of your customers represent 80% of your sales. You can use this rule to your advantage to retain your best clients and acquire new ones, ultimately increasing your revenue.

 

Tip the scales in your favor

Many financial professionals build their practice by default—it just happens. But by leveraging your practice’s specific strengths, you can design, or redesign, your practice to create growth and retention. The first step is recognizing the 80/20 rule and creating a proactive, tiered service plan. You can do this in three ways:

  • Playing Defense by protecting your biggest and best relationships—the "vital few"
  • Playing Offense by replicating those vital few relationships
  • Targeting and developing your most viable prospects, or "MVPs"

 

How to get started

Download the financial professional worksheet below. It will help you see if the 80/20 rule holds true for your practice. You can even take it a step further using the 95/5 rule, to see how many households account for 95% of your revenue. The worksheet will help you recognize your most valuable clients, which will help you design a tiered service plan. This in turn will help you to retain your best clients and acquire new ones.

 

Resource icon Resources for Financial Professionals

Presentation

Worksheet

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Next Steps

1 Get the Create a Practice By Design Rather Than By Default worksheet 
2 Complete the grid on side 1 worksheet

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