How ITW uses the 80/20 Rule to Increase Sales Results

80/20 Rule to Focus Sales Efforts

80/20 Rule: Sales Benefits

The 80 - 20 rule is the mantra at the ITW company. All from the top executive, to a salesperson working a territory use the 80 - 20 rule to manage the business. This rule tells us that 80 % of a business result will come from 20% of the effort. The rule can be applied to all business processes; product lines; customers; lead generation campaigns, like trade shows, direct mail and web site offerings; partners, distributors and manufacturer's reps; and human resources, like salesmen, management, engineers and executives. This 80 - 20 rule, if anything, is simple. There are no foggy buzzwords, no hard to understand descriptions of the rule and no fuzzy details.

Applying the Rule to Sales Channnels

In this simplicity, I find beauty. Top execs at several ITW business units school me on rule application. My business is sales improvement so let's shed light here. Business units, like ITW Loveshaw, a packaging machinery maker, sell through a distribution network. The distribution network has big distributors like Unisource and Xpedx and smaller partners like Ambrose out of Kanas City. All are charged with running down leads and closing sales in companies needed packaging machinery, which are salted in the assigned territory. Applying the 80 -20 rule sounds simple enough. However, there are over 600 distributors, each averaging 5 salespeople. Now applying the rule is can be futile. Rear view mirror data of landed sales is available. This is dated data. What if an accurate current sales state is needed to freshen up the 80 - 20 rule focus?

Get the Sales Data to use 80 20 Rule

The rule focus can be re-oriented using sales data. This may be fast enough in good markets. But is slow enough to cost sales in most markets. Leads which are not followed, sales which are not closed because of lack of effort of selling focus, erase dollars from top line revenue. This fact, mined by Loveshaw, forced a technology change. A move to a sales tool to pull data from the entire sales network; all distributors and all distributor salesmen, in near-real time. What has this meant?

Sales Channel Sales Boost

Now, regional sales managers stay ahead of bigger sales opportunities. With 13 regionals, each managing 40 - 60 distributors this was impossible. Now, using a simple sales tool, all lead and opportunity data flows to and from distribution. The regional sales people can scan an online report which shows what is up in the entire sales network. Sales managers know where to focus. Marketing, now, reads lead source reports. Reports, again, which shows who is doing what with all lead sources.

80 - 20 Rule and Sales Software Results

Near real-time data feeds the 80 -20 rule. Orientation of sales process improvements is done much faster than before the new sales tool was deployed. Eye opening results made stakeholders happy.

Read about the ITW Sales Results Attained with the new Sales Software: