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The Pareto Principle is known as the 80/20 rule, the Law of the Vital Few, etc. Basically, it means that for anything in life, there’s a minority that will account for a majority of the results.
- The original Pareto principle was developed by an Italian economist that noticed 20% of Italy’s population owned 80% of the wealth.
- Only 20% (1 in 5) of Oriental medicine practitioners are still practicing after 5 years. 80% are not. (If you’re reading this, you’re probably a member of the vital few. Congratulations!)
- You probably wear 20% of your clothes 80% of the time.
- 20% of people cause around 80% of car accidents.
- 20% of patients/customers cause 80% of the headaches.
The figures aren’t necessarily distributed perfectly at 80/20, and they don’t have to add up to 100. It could be 20/70 or 90/15. It’s just a crude estimate. What interests us is how this disparity applies in an awful lot of situations. Small things bring big results.
Sometimes HUGE results.
Here’s a small thing that may make a huge difference for you. I’m not sure if you noticed this, but around 20% of your patients bring you 80% of your profits. (Probably not exactly - but close enough.)
This is important for a few reasons. These top 20% of patients are almost always the ones you enjoy treating the most. You can get more of those top patients - instead of attracting the 80% that only bring you 20% of your profit, you can do the reverse.
Simply profile your favorite patients. The ones that work best with you. Where do they come from? Where do they get together? Do they have similar hobbies, lifestyle interests, etc.? This will help you find them and get more of them. I touch on this in page 79 of Never Market Again. I also touch on asking for specific referrals on page 56. (You don’t need the manual for this - when talking to patients about referrals, ask for others like them.)
Most practitioners try to attract anyone and everyone as a patient. It doesn’t work because not everyone is the kind of person who would become your patient. But focusing on the vital few people who are most likely to become a patient will get the best results.
3 responses so far ↓
1 Kent // Apr 17, 2008 at 12:54 pm
My best patients are nurses. That was a revelation that opened up a whole area of marketing and focus which I could see leading to greater integration with the health care system as well as convincing personalbe possible marketers! Thanks Burton
2 Burton Kent // Apr 17, 2008 at 1:09 pm
Kent,
Very cool. I suggest telling them that you noticed it, find it interesting, and ask them for advice on reaching other nurses.
That way they won’t feel pressured to send you referrals, as you’re talking about nurses in general. Of course you’ll probably also hear about specific nurses they want to refer to you.
Burton
3 Andrea, (L.Ac. in Arizona) // Apr 28, 2008 at 10:38 am
It is interesting that I re-read this blog entry today, since I just realized a few days ago that my best patients are men who do construction, remodeling, etc. This was an eye-opener for me, since I always “thought” my best patients were women who are involved in healing from emotional trauma. Not so! I have become burned out with these women, who are high-maintenance, needy, and unhappy with just about everything - nothing is ever enough for them. By comparison, my construction worker patients are extremely grateful to feel even just a little bit better, and eager to tell all their buddies about me. What a revelation! Thank you for helping me think more clearly about this!
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