The 85/15 Rule

I always liked direct marketing because it had numbers to back it up. It had quantitative rules and laws like the ‘80/20’ rule to help you understand what part of your customerbase was truly valuable. So, I was stunned to discover a little statistic about RFPs back in the late 90s in a book about sales. One of my clients was a technology company that trained its sales teams on solution selling, and out of curiosity, I picked up the book (The New Solution Selling by Keith Eades, I highly recommend it). The book noted that across most industries, 85% of the time, the client already knows who it wants to hire before it releases the RFP. Put another way, 85% of the time, the company it wanted to hire before the RFP was released was actually hired at the end of the process. This struck me as somewhat incredible at first. There was no way that stat could possibly be true, right? There’s no way that the myriad RFPs we responded to were somehow rigged? But the more I thought about it – going through every pitch I had been a part over the years – I started to think it was possibly true. Whenever we had a previous relationship with the prospect (whether we had actually worked for them, or someone at the agency knew them, or we found out the CMO loved one of our campaigns, etc.), we won. When we didn’t have that advantage, we lost. Just as an aside, while I found this to be a huge epiphany, my friends at my technology client thought I was looney tunes. OF COURSE those statistics were right. That’s why you have a trained sales force selling your company every day. I thought to myself, why hadn’t the advertising industry ever considered this?

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