The Pareto Principle

Hey, guys. Alberto Riehl here and in this video, I’m going to be talking about the Pareto Principle. Now, the Pareto Principle is also known as the 80/20 rule. 80/20. It’s a very simple rule. It’s very powerful, and we can apply it into our business to really multiply what we’re doing. I’m going to show you that in just a couple minutes, here. So, what the Pareto Principle says is that 20% of our efforts end up producing 80% of our results. Most people are focusing on the 80%, and vice versa, that 80% of effort is only producing 20% of your results.

So, right now, no matter where you’re watching this, 20% of the people in your town or city are producing 80% of the income. Whatever country you’re in … If you’re in the US, 20%, the top 20% of the people create 80% of the income, right? So, we’re going to use that in our business. How does that work? Now, one of the things that I know is that if you’re out there producing 20%, the top 20% of agents, again, are doing 20% of the volume. If you flip that again, 80% of agents out there, most likely you if you’re listening to this, 80% of agents are dividing up 20% of the commissions. The crumbs, as we call it. So, we want to see how we can flip that and become in the top 20%.

One of the first things that we’re going to do is … This is something that I learned last year. We’re going to find out where our time and effort is going throughout the day. Because most of us are spending 20% of our time selling and 80% of the time prospecting. You get trained to like always be prospecting, see who’s around you, observation, bug the people around you. Bug friends and family. You’re doing that all the time. We talk to people every day, agents every day, that say they’re cold-calling. They’re like, “Well I just have to do 200 dials to get an appointment.” Dude, you’re spending 80% of your time prospecting. We’re not life insurance prospectors, here. We’re life insurance producers, and ultimately, we should be spending 100% of our time producing, in front of a decision maker, and nothing else.

Here’s how we do it. The first thing we need to do is figure out where is our time throughout the day being spent. I want you to put down 100 units. We each have 100 units of time. It’s also 100 units of energy, okay? But, let’s say your working eight hours a day, or maybe you’re a hustler, a grinder, and you’re spending 16 hours a day working. It doesn’t matter. Whatever you’re spending, that’s 100 units of time, and that’s all you have. Most agents, this is what they’re doing. They have 20 units doing admin stuff, right? The stuff we hate. Paperwork, applications, follow-up, underwriting, calling the underwriters, waiting on the information, setting up pyramids, all that stuff. We shouldn’t be doing that stuff. That’s a waste of time, but at the beginning of our careers, we have to do that, so it’s okay.

Now, 20. So, 20 of our units are going to admin. 60 of our units, if you’re a life insurance producer, are going to prospecting. 60% of our time, 60% of our units, 60% of our energy is going to finding people in front of me. Again, we talk to agents every day that are like, “Man, I need more to get in front of. I need more people to get in front of.” And they’re cold calling. They’re networking. One of our clients said that he hates networking, because he thinks it’s like cold calling in person. I was like, “Wow, I’m going to steal that. Can I use that?” He said, “Yeah,” so I’m using it. It’s true. Networking is like cold calling in person. It’s like throwing a Hail Mary out there. Maybe there’s somebody that is an ideal prospect. Not a very efficient way to do it.

There goes 80 of our units. Now, the last 20 are actually spent selling. So, only 20%, 20 of our units and time is going to selling. This is the only income-generating activity. That’s the only thing we should be doing. But instead, we’re doing paperwork. We’re trying to find people that we can present to. Let’s see how we can flip those numbers around. I want you to do this exercise for yourself. This is what the average agent looks like, but maybe yours is a little different, so sit down and see where your units of time are going. If you’re not sure, just document it. Journal it. On Monday, when you go to work, have a journal, and you can say, “Okay, yep. I just spent the first two hours on the phone, getting back emails, returning phone calls, all that. That’s under admin, most of it, right? Unless maybe some people want to meet with you, then part of it is going to prospecting, but none of that is going into sales. So, sit down and figure out what that is.

Now, here’s how we’re going to change that. Oh, we’ve got a little wind here, guys. Can’t dominate Mother Nature. Hopefully, she’ll cooperate with us. Right now, we’re at 20 units admin, 60 prospecting … There we go, and then 20 selling. What we want to do is we want to tackle the area where we can put in the least amount of effort, the least amount of time, and get the maximum amount of results, right? So, right now, the greatest opportunity is right here. Most of our units are going towards prospecting. How can we tackle that? Here’s a way that I’m going to do it. I’m going to share with you … There’s a link at the bottom of the video here in the description. It’s for an Entrepreneur Magazine. I’m sure you’re an entrepreneur. You read Entrepreneur Magazine, one of the most credible sources out there. Always have great ideas. They interviewed me recently on ways to get free traffic on Facebook, which, if you’re watching this, most agents say, “Man, I don’t want to have to figure out Facebook. I’ve tried it. I’ve hired people and I’ve lost my ass. I get nothing out of it.”

Well, we’re pretty good at it. We’re so good, Entrepreneur Magazine came to us to get some tips, and I gave them an exact step by step process to get free prospects and free appointments without spending any money out of pocket from Facebook. So, there’s a link at the bottom, here. Click on the link and follow that, and here’s what that’s going to do. That’s going to make you twice as effective. Just that one strategy is going to make you twice as effective when you’re prospecting. If you’re bothering friends and family, if you’re networking, if you’re cold calling, you’re doing all that stuff, it’s going to make you half, at least twice as effective. Excuse me. You’re going to spend half the amount of time to get the same results. You’re going to be twice as effective.

Here’s what’s going to happen. Your prospecting is going to be cut in half by using that strategy that I share with you on Entrepreneur Magazine on Facebook, that 60 units, you’re going to cut it in half instantly. You can start doing it on Monday. Do it on Monday. Take some massive action. Do it on Monday. Your 60 units is going to be cut in half. Now, your admin, you’re still going to be doing that. 20 units on admin. But now, instead of having 80 units used up here, and only have 20 units left for selling, all of a sudden, how many units do you have left for selling? Right, you’ve got 30 used for prospecting, that’s half of what you were doing just instantly by using that one strategy, 20 for admin, 50. Now you have another whole 50 units left that you can now start applying to selling.

Guys, you’ve got to understand how huge this is. You’re selling time and units just doubled. More than doubled. Two and a half times. So, all things being equal, meaning, you didn’t get any better at closing. You didn’t get any better at admin stuff. You didn’t add any more products to your portfolio, which is what a lot of agents do. They think they’re going to sell more. That doesn’t work. It just distracts you. You didn’t change anything. You’re not working any more time, very important. You’re just shifting your units from prospecting to selling. Now you can spend half your time selling instead of only 20%, and because of that, your sales will double automatically.

Here’s what’s great, is now we’re at 20, 30, 50, right? You’re going to do this exercise again. Once you master the prospecting strategy and you’re doubling your sales time, guess what? The money is going to start coming in. Now you can use your money as a tool. You can use your money to hire a professional prospector, we’ll call him. Maybe a marketing company. Maybe an expert that does that. Maybe you invest into a system like our guys have done that shows you how to do that with a click of a button. If you double your income, you think you can invest in that? Absolutely.

So, the next step is to get rid of those 30 units that you’re spending prospecting, and you do that with money, the extra money that’s coming in. Now that 30, you add to your sales. Now, you’re at the top. Oh, here comes the wind. 80% of your time is being spent selling. 80% of your energy is being spent selling. The only thing that’s left now is the 20 units that is still being used for admin. At that point, guys, trust me, your sales have quadrupled. If you don’t get any better at closing or anything else, you don’t add anything else, without adding any more time, your 20 units of selling have now quadrupled to 80. Guys, it’s simple math. I’m not that smart, but I know simple math. This is four times that, so your income and your sales have quadrupled.

Do you have enough income now to get an administrative support staff member? Maybe get an assistant, somebody that can help you out with emails, phone calls, pyramids? Absolutely. And after that, you’re getting rid of the 20 again, and now you’re at that place where the very few badasses get to be. Where you’re spending 100% of your time, 100% of your units, 100% of your energy, in front of the decision-maker.

That’s it. Back in the day when I was selling, I was only working two days a week. Now, on those two days, I was seeing about 9 clients a day, but that’s all I was doing. I had an admin person that took care of everything else, so all I did all day long … An appointment at 9 o’clock, 10 o’clock, 11 o’clock. That’s all I did. I condensed my time. 100% of it was selling, and the numbers went through the roof. It’s that simple.

The last tip that I’ll give you … I just heard Gary V talk about it, and it makes a very simple explanation. We’ve got to have patience in the long term, but speed in the short term. He says patience in the macro, speed in the micro. What does that mean? The macro is the big picture. Going from here to here to here to here, you’ve got to have patience. But if you do the everyday actions with speed, the micro, you can get there easy in six months. You might be saying, “Well, six months. That’s a long time.” Guys, there’s tons of agents watching this who have been in business 10 years, 15, 20 years, and are still stuck here. After 20 years, right? Very few, only the small 3% of the most successful actually get this right, and it’s very, very simple to do.

What is the every day, the micro, the speed? Right now, take action. Click on that link. Don’t waste any time. Read it. Read it again. Put it into action. Start doing what I say to do in that Entrepreneur article, and start doing it and do it consistently. Monday, Tuesday, Wednesday, all the way to Friday. Do it every day consistently, and within two weeks, you’ll be getting sales from that effort. Then you keep doing it, and it keeps compounding and compounding, and then you can go from here to here, from here to here, and then to here. Your income will go like this, and six months from now, guys, probably less, you’ll be doing 100% of your time spending it in front of a decision maker. That’s something that most agents can’t ever say, even the ones that have been in business for a long time.

So, guys, watch this again. Take some notes. Write down exactly how you do it. Click on the link. Read that Entrepreneur article. Follow it step by step, and comment and reach out to us when you’ve taken your income times four.

Alberto Riehl. Pareto Principle. 80/20 rule. We’ll see you on the next video.