Profit From the 4 Rules of Marketing | Vancouver Entrepreneurs

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1:26We've already taken 20% of that 20% of that 20% that's 4% or what we know is 4%. This 4% is extremely powerful. We don't really think about it. There's a bunch of studies and everything else that go into it. In a lot of companies, 4% of the clients generate 64% of the revenue. That's fractional. 4% do 64% of the revenue. I start off with my clients working to focus on that 20%. I'm quickly getting them to focus and figure out who are there 4% of their customers. There's going to be 64% profit. A quick way if a company wants to double it sales, they just need to sell to their 4% the same amount that they sold before and they'll automatically increase the percentage profit by 64%. It's a key metric, a driver, whatever you want to call them for that. A lot of companies that look and say, okay, how do we get more of these 4% and that's part of that filtering process.

2:27Which is my breakthroughs for the number rule. Which is the 4% rule. Remember that. Write it down. 4% of your customers can generate up to 64% of your profits. The key is you've got to deal with the delivery and value and higher level services to get to that point. So everybody's running around trying to chase new clients. Most people don't need to. Your clients, if you have a certain amount of existing clients, your clients are right there. They're the easiest clients to sell or your existing clients. Your 4% clients come from your existing 20% clients that are already there. But everybody wants to run around and chase new clients. Just go from the ones that you've got from that standpoint. So just let me tell you a little quick story here that I went back and looked at myself. So I was in the last decade in the seminar business. I was doing these financial case seminars. When I look back, I try to apply this real essential. How does this work for me? Well, this is what I discovered. I have one client in a 10-year period of time that's done as much business with me. And I've made as much profit from this one client.

3:28Then all the other compliance. Clients combined over 10 years. One client. All in the same industry. All doing the same type of financial events, whatever. One client was equal to me. All the other clients over 10 years. So if I really understood this rule at the time, eight or 10 years ago, here's what I would have totally done different. This is the power of the 4% rule. I would have spent 80% more of my time talking to that client, working with that client, trying to figure out what else we could do together. But I was a dumbass. I was out there trying to find new clients. Right? They're in this expensive starting new clients. Sometimes they work. Sometimes they don't work. Sometimes you lose money. Sometimes you make money. When I had my golden goose sitting there right in front of me, if I just pastored and talked more and strategized more and figured out, what else can I do with that client? That's where the power would have been from that. That's how powerful the 4% rule is. And that's where we come up with this 4% rule.

4:304% of clients spend 16 times the money that's built into your 20% there. So just remember that there is going to be a percentage of clients that are always willing to spend more. And at least 10 times value, right? So an example is one of our clients what we're doing. And it takes time to create this. People think you can create this overnight. So we have a client right now that I'm working with that we realized about the 4%. So it took us about 6 months of testing, tweaking, and current. Well, we came up with a new program that is twice as much as any other program you sold. So it was typically selling a $5,000 program or $10,000 program. But you now sell a $20,000 program, okay? And we know the rules. The rules tell me that 4% or 4 out of 100 should be willing to buy that program. We're selling that program. It's working. What it found out for me is we're selling too many of them. Okay? And what that tells me is we're selling like 12 to 14 out of 100. Which tells me we can deliver more value to these clients.

5:30We haven't hit the 4%. It is a rule. So that tells me right now, okay, the 4% is probably closer to $30,000 program if we can find a $30,000 program. Because yeah, if you sell 5 or 6 out of 100, okay, you're close to that 4% rule. I'm selling 3 times that right now. 12%. So that tells me there's still more value in those existing clients, which are our best clients. I just need to help come up with them to come up with a better value proposition for them to get in the point where they'll go to that higher level. So don't always say you got to go somewhere else. If you saw my point from the beginning, it's about quality. Do you notice that these 4% clients are high quality? What would you rather sell? 20 or $31,000 clients or $1 client at $20,000. 20,000, right? You can get way more service, you deal with one, you're not dealing with the other. This is the mathematics of the rules that are behind it to get to that point if you think about the process. You know it's not a great use of time. Getting data ready for AI. That's why IT leaders turn to CDW. We help unify data and govern it, building the foundation for your AI and agents to deliver results.

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