The One Area Where the 80/20 Principle Doesn’t Work (And It’s Hurting Your Business)

In my last post I talked about the power of the 80/20 principle, along with a new twist on it, the power of focusing on the 20% of the 20% (i.e. getting super focused on the very few activities that have the greatest potential to make a significant impact on your business and life). If you haven’t read it yet, I encourage you to do so as soon as possible. It has the potential to make a serious impact on both you and your business.

However, as I was getting ready for a talk I did this week for a company located in Omaha, NE, Arrow Stage Lines, it dawned on me that there is one area where the 80/20 principle doesn’t work at all—in fact, I would argue that focusing on the 80/20 principle actually hurts a lot of business leaders and blinds them and their companies from making changes they need to make.

The reason why this problem exists for most companies and organizations is because leaders, by definition, tend to become reductionist in their approach to business. Why? In order to survive. There are simply too many balls that have to be managed for any one person to remember and think about. And the end result of this is that we tend to reduce down the number of items we focus on (i.e. we tend to step back and take a macro view of our businesses and say, “Here are the three (or the five) most important things we (or I) need to focus on.”

And while that works for you and your own schedule (see previous post), as well as your strategy, etc. there is one area where this doesn’t work at all … and that one area is with your customers.

In other words, while the 80/20 principle works well internally, it doesn’t work well externally. While we’re focused on how to maximize our time and limited resources, customers/clients/patients/members aren’t. They don’t care about you and me, they only care about themselves and the one widget or one experience that is theirs—which is why the 80/20 principle doesn’t work for customer service or customer experience.

In fact, the Pareto Principle actually hurts you and your business because the desire to reduce down your focus to the big movers in your business causes you to loose sight of all the “little” things that irritate customers. And as I like to say, “It’s not the $1,000 problems that irritate customers, it’s the $5.00 ones”—the very things that most business owners and entrepreneurs don’t even see or think about—and that is a very big problem.

I. Customers Don’t Care About One or Two Things, They Care About Every “Little” Thing

When you buy a new cell phone (let’s say an iPhone), do you just marvel at the design (the retina screen, the light weight, the speed, the beveled edges, the seamless transition between metal and glass, etc.)? Probably. And that iPhone is freaking awesome … until it isn’t. Maybe an app isn’t working right. Or maybe you had trouble importing your data. Or maybe there’s a notification you don’t know how to turn off—and it keeps going off. Or maybe your phone is getting hung up when you’re using Apple music because the reception isn’t great and you can’t access your download music. Or … You get the idea.

Like every other customer/client on the planet, you’re happy until you aren’t. And rarely is it the big things that annoy you. Why? Because most companies are pretty good at the big things (not all, but most). However, you don’t just care about the big things, you care about the whole.

And just like you, that’s how your customers think and feel. “Everything matters.” In order to create a great customer experience, you have to get a hundred things right, not just one or two things—and therein is the problem for most business owners and entrepreneurs. They’re not thinking like a customer, they’re thinking like an insider who’s focused on the few things that can move their business forward.

II. Customers’ Perceptions Always Trump Owners’ Perceptions

One thing that you and I CAN’T control is how someone thinks. We can’t control how they see things or how they feel or what they think is important, etc. We can try to influence, but ultimately, they have complete control over what they think.

And unfortunately, rarely are the things we think matter the same as our customers/clients. In fact, in my talk this week I used an example from a group of caterers who were asked, “What are the top four things that matter during a coffee break at a conference?” Their answers,

1. Time (as in when),
2. Extra consumables,
3. Attractive display and
4. Cleanliness.

They then asked conventioneers what they thought were the four most important things about a coffee break. Their answers,

1. Availability of coffee (i.e. not running out),
2. Quick line,
3. Nearby restrooms and
4. A place to stand and talk.

What do you notice about the two lists? Exactly. Not one item is the same.

So, what makes you think that what you think matters is actually what your customers think matters?

Likewise, in a study by Bain and Company, when they surveyed 362 companies, they asked the senior executives of those companies what percentage of them thought they delivered, “Exceptional service,” 80% said, “Yes, we do.” When they asked the customers of those companies the same question, only 8% of them said that same company delivered exceptional service.

In other words, your perceptions of great service and theirs might not be the same. And when it comes to customer service/experience, their perceptions always trump your perceptions of what qualifies for exceptional service—which means that everything matters.

III. Therefore, It’s In Your Own Self-Interest to Scrap the 80/20 Principle When It Comes to Customer Service/Experience

Since you can’t dictate to a customer, “Focus on these three things we do exceptionally well,” you might as well forget the Pareto principle when it comes to customer service/experience because it’s not about doing a few things well, it’s about doing lots of things incredibly well.

If you ask a chef what matters for a customer to decide if they’re going to choose a specific restaurant and if they’re going to return, they will almost always say, “The food.” But is that correct? Not even close. Yes, the food has to be great. But even if the food is great, if the server wasn’t friendly or was too hard to find, or if the restaurant was too cold or too loud (or too quiet), or if the silverware wasn’t clean or if the booth wasn’t fully cleaned (or was uncomfortable) or if the lawn hadn’t been mowed recently or if the bathroom wasn’t clean or if the hostess skipped over your name on the waiting list and it took an extra half hour to get seated, etc. you’re NOT coming back … no matter how good the food was.

Any way you look at it, the 80/20 principle just doesn’t work when it comes to customer service—so scrap it. And instead, embrace the everything matters concept.

As the leader of your business, you set the tone and expectations. If you don’t care about every moment that a customer cares about, your business won’t—and both you and your business will suffer.

Someone has to be the banner carrier for the customer in your organization—and that one person ought to be you! Yes, you can assign other people to work on projects and create systems, but you have to be the one reminding everyone that everything matters when it comes to customers. You have to keep beating the drum that customers don’t just care if we get one or two things right, they want everything right. No one else can make that argument as compellingly as you can. And no one will enforce it unless you do.

Steve Jobs clearly had lots of quirks, but this is one thing he got right. And because he did, the whole company did. When you obsess about every interaction that a customer can have with your product and/or service (or company), then your people will get that it matters to you—and if it matters to you, it ought to matter to them.

So, embrace the Pareto principle when it comes to your own personal productivity and the strategy of your company, but let it go when it comes to customer service and experience.

If you’ll do that and embrace the everything matters concept, you’ll find that your growth will accelerate and you’ll have a lot more raving fans out there sharing your story.

To your accelerated success!

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