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The 4% rule for moving your firm’s money needle
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The 4% rule for moving your firm’s money needle

Your focus should be on intimately knowing your market and your prospects’ deepest desires, pains, fears, hopes, and dreams. You need to know them better than any of your competitors, and then craft marketing messages that effectively communicate how you can solve these problems, writes Sabri Suby.

Let me ask you a question, and be honest: Does your law firm suffer from the following symptoms?

• Are you overwhelmed and overworked with trivial activities?
• Are you not focusing on high-yielding, revenue-producing activities?
• Are you trading time for money and not earning your true value?
• Are you stuck in a state of feast or famine?
• Are competitor firms with inferior services seeing more success than you and stealing your market share?

If you answered ‘yes’ to any of the above, then you’re likely so busy working ‘in’ your business in a reactive state that you never get time to work ‘on’ your business – and you’re making a fatal mistake.

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Being busy is not the same as being productive. Our lives are full of distractions, and it’s hard to stay focused when your world consists of hundreds of tiny tasks and millions of voices screaming for your attention.

And it’s no secret that the legal industry faces a stress and burnout crisis. As the founder of a law firm that you’re looking to scale, your focus needs to move from doing the everyday work, to producing revenue for your business and steering the ship.

If you are a business owner who is hungry for growth, you need to realise that the money in business isn’t in your services, it’s in the selling of your services.

What I mean is, no matter what industry you’re in, once you’ve got a few team members and you’re looking to scale your business, you’re no longer a lawyer, builder, baker, or business consultant. You’re a marketer.

The fate of your business lies in not just in having the best legal services but in your ability to market your services. While this might be difficult for you to accept, it’s true.

I’m not saying you don’t want to have the best service in the legal industry, I’m saying the money is not in that – because if you can’t effectively communicate that to your market, it doesn’t matter.

The market doesn’t pay you to have the most qualified advice and best service. It rewards you for solving problems. A transaction takes place when, in the mind of the consumer, the value of the solution you’re selling outweighs the price you’re asking.

In other words, you’ll be compensated on the basis of how you market and build value around your solution to the pains and desires of your customers. The bigger the problem you solve, the more you will be compensated.

Your focus should be on intimately knowing your market and your prospects’ deepest desires, pains, fears, hopes, and dreams. You need to know them better than any of your competitors, and then craft marketing messages that effectively communicate how can you solve these problems.

This exercise is the single most valuable activity you can do in your business.

I refer to these Highly Leveraged Activities as the 4 per cent of activities that move the money needle. In reality, 20 per cent of activities bring in 80 per cent of your company’s revenue.

The 4% rule for moving the money needle

You might have heard about the 80/20 Rule, commonly called the Pareto principle. An economist Pareto found a disproportionate relationship between cause and effect. For example, 20 per cent of the input creates 80 per cent of the result, 20 per cent of the workers produce 80 per cent of the result, and 20 per cent of the customers create 80 per cent of the revenue.

But most people never truly apply this principle to their business let alone other areas of their life. I’ve found his 80/20 rule to hold true over almost all areas of business, including…

• Popularity of services;
• Sources of incoming leads;
• Customer service problems;
• Reasons clients engage your services; and
• Activities in your business that produce revenue!

In business, the little stuff kills the big stuff. What I mean is there are lots of small, nit-picky things in your business constantly screaming for attention, but these aren’t the tasks that produce revenues.

When I started to apply this in my business, revenues skyrocketed. To give you an example, here are my business activities:

• Checking emails;
• Writing copy;
• Speaking with clients;
• Having meetings;
• Creating Facebook ads;
• Checking stats;
• Creating systems and processes;
• Coming up with offers and promotions;
• Training/on-boarding staff;
• Creating sales funnels;
• Sending emails;
• Shooting videos;
• Recruiting;
• Running errands;
• Making webinars;
• Creating proposals;
• Scheming and plotting;
• Setting up systems;
• Looking at analytics; and
• Public relations/interviews. 

The 80/20 Rule demonstrates you can and should disregard 80 and of your business activities. They should either be delegated or outsourced so you can focus on the top 20 and that produce revenue.

Once you’ve done this in your business, you need to take it one step further and truly become a high-performance business owner. You see, you should apply the 80/20 Rule to the 80/20 Rule itself. That is to say, 80 per cent of the 80 per cent of the revenue comes from 20 per cent of the 20 per cent of your revenue-producing activities.

To put it more simply…four per cent of your activities create 64 per cent of the revenue in your business. 

In my business, after cutting out the 96 per cent of my activities that produced little or no revenue, this is what the top four per cent revenue producing activities looked like:

• Writing sales copy;
• Coming up with offers and promotions;
• Creating sales funnels;
• Shooting videos;
• Doing webinars;
• Scheming and plotting; and
• Very select media interviews. 

Because these four per cent of activities literally bring in 64 per cent of all the revenue for my business, I hired an operations manager and other team leaders to do all the other things that don’t move the money needle.

Sadly, here is where most entrepreneurs and top employees mess up. Instead of investing their time exclusively on their super-productive four per cent, too many business owners and sales people get caught up in the minutiae of the day-to-day 96 per cent. All day long, they go from putting out one fire to another, never having a chance to invest time working on the four per cent that moves the money needle and propels their business forward.

So what are your top four per cent revenue producing activities?

Are they creating new offers? Motivating key staff? Increasing lifetime customer value? Whatever it is, you need to figure it out.

And once you’ve put together a list of these vitally important revenue producing activities, it’s time to get to work and start automating and creating systems for just about everything else.

You shouldn’t invest your time on low-value tasks, because every minute you spend on low-value tasks or putting out fires is time taken away from the areas of your business that have the most leverage and largest potential to make you money.

Remember, only four per cent of your activities each day drive your firm forward and move the money needle. The other 96 per cent of the things still have to get done, but they shouldn’t get done by you.

Sabri Suby is the founder of Australian digital marketing agency King Kong. This opinion feature, targeted at lawyers, features excerpts from his book, ‘Sell Like Crazy’.

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