A highly profitable distraction: the 80-30 Rule​

Time and again I ask my CPA clients to run a Revenue by Customer Summary Report and toss the results on a graph.

It looks the same every time.

80% of clients generate 30% of revenue.

Which means

20% of clients generate 70% of revenue.

These CPAs could let go of 80% of their clients and keep 70% of their revenue.

Does it always look exactly like that?

Of course not, not exactly.

Sometimes, it’s even more outbalanced.

Precision aside, the pattern is clear.

When was the last time you graphed your clients this way?

I hope you’ll grant yourself this 15-minute “distraction.”

For some, seeing it there on paper, changes everything.

 

 

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Geraldine Carter