How to apply the 80/20 rule to your network marketing business

I've been sharing Eric Worre's training on "How to Recruit 20 People in 30 Days". Somebody asked a question in the private Facebook group about the 80/15/5 rule and whether it applied. I'd never heard of the rule and I never saw if there was a response to the question.

What I found out is that it's a modified version of the 80/20 rule, also known as the Pareto Principle. According to Wikipedia:

The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. 

And more in line with our needs:

It is an axiom of business management that "80% of sales come from 20% of clients".

Or our reps, which is what we're talking about here.

According to Ray Higdon:

Anything about Team Culture, I learned from Larry, and Taylor Thompson. They’re amazing, diamond clients of ours. They’re just incredible.

As they put it, 80% of any network marketing team has the desire level of $0 to $500 a month. They get $500 a month, happy as can be. They’re at $0 a month, they could be happy as can be.

15% are at $2,000 to $3,000 a month.

5% have the desire level to make $25,000 or more a month.

I talked about Larry and Taylor last week.

Note that these percentages talk about desire. How does this apply to 20 in 30? The percentages work out really well with 20 people, since 5% is 1 in 20. So the breakdown is as follows:

Out of your 20 new reps:

1 out of the 20 will likely want to make $25,000 or more a month (yay!)

3 out of the 20 will want to make $2,000 to $3,000 a month (still good)

And the remaining 16 out of the 20 will want to make $500 or less

How does this play out in practice? According to Jordan Adler in his book "Beach Money" about a third of your reps will do nothing, another third will do a little and the remaining third will do more than a little...and 1 out of 25 - 30 will really take off. So, out of our 20 the numbers look like this:

6 or 7 out of the 20 will do nothing

6 or 7 out of the 20 will do a little (maybe one or two hundred a month)

6 or 7 out of the 20 will do more than a little (maybe a few hundred to a few thousand)

Since Jordan's superstar only shows up 3 or 4% of the time, we may not have one in this group of 20...but we'll eventually get one.

I saw Jordan speak in Sacramento a few years ago and he had 187 personally sponsored reps at that time and of those only 7 (3.8%) were responsible for almost all of his $100,000 in monthly commissions.

Related to this is how to spend your time training your team. Deb Erickson found that the 80% of her team that wasn't applying the training and coaching that she did were the ones that were taking all of her coaching time. Check out this Coffee with Deb video to see how she dealt with it.

I hope you found this information useful.

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