The 64/4 rule explained – with examples
The 64/4 rule explained – with examples
The 64/4 Rule: We’ve all heard of the 80/20 principle – the notion that 80% of your results are driven by 20% of your actions.
Known also as the Pareto principle, it was explained in great detail in Richard Koch’s book “The 80/20 principle”.
- 80% of your nutritional needs are met by 20% of your food.
80% of your income comes from 20% of your work.
20% of your customers provide you with 80% of your turnover.
This can be applied to pricing too – 20% of your customers would happily pay more for a premium product if only you’d make one available to them.
80% of your referrals probably come from the same 20% of referrers.
But what happens when you apply the Parento Principle to itself?
Does 80% of the 80% come from just 20% of the 20%?
Yes, it does.
The Parento Principle compounds – and you can square it (the 64/4 rule), cube it (the 51/1 rule), or take things even further.
If 80% of the output comes from 20% of the input, then 64% of the output comes from just 4% of the input.
20% of your customers would happily pay more for a premium product.
20% of them (4% of your total customers) would pay even more for an ultra-premium product.
And 20% of the 20% of the 20% (1% of your total customers.. yes there’s some rounding going on here!) would pay yet more for an uber-luxurious level.
But why stop there? Of that 1%, a fifth of them would pay even more, for an even better product or service if you were able to provide it.
People think about the 80/20 rule all the time – but they always stop at that level. They never compound things further and talk about the 64/4 rule, or the 51/1 rule.
If you knew that 51% of your turnover came from just 1% of what you do, wouldn’t you make absolutely damn sure that you worked on that 1% every single day?
If you’re looking to maximise the return on investment from your time each day, then you might enjoy my bestselling book Routine Machine, which shows you how a “normal bloke from Plymouth” had more success than he ever dreamed (or deserved!) – by leaning into the amazing 64/4 power of daily habits and routines. I’ve turned consistency into my superpower – and in Routine Machine, I’ll show you how to do the same.
You can get a FREE chapter of Routine Machine here.
Some more Big ideas:
THE TOP 100 BOOKS THAT EVERY SMALL BUSINESS OWNER MUST READ:
THE 90-DAY BUSINESS PLAN:
WHAT IS A LIFESTYLE BUSINESS?
A FREE CHAPTER OF BIG IDEAS… FOR SMALL BUSINESSES
“Two normal blokes from Plymouth” John and Jason have been working together, building businesses for over two decades!
They’re the anti-gurus with a strong dislike of pseudo business psycho-babble. Their no-nonsense, straightforward approach with relatable and valuable advice has won them followers from all over the world. They’ve helped hundreds of business owners improve their businesses and lives.
The King of Can-do and the ‘Lazy’ Entrepreneur have a mountain of knowledge they’re happy to share.
DON’T YOU WISH GROWING YOUR BUSINESS COULD BE LESS STRESSFUL?
Could you improve your business by just 1% this week? Note: I said “improve”, NOT "grow" your business - growth might not be what you need.
More customers, more leads, more staff, more stress might be the last thing you need.
You might actually need more profit. more margin. more leverage.
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For you, the answer could be a smaller team, less customers, and fewer products.
The One Percent Club won't help you grow your business. It'll help you IMPROVE it - 1% at a time. Baby steps. Steady, predictable improvement - towards the kind of business you wanted when you first started - one that delivers a fantastic lifestyle, and serves you rather than you serving it.
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I think you’ll like it…
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