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The 64/4 rule explained – with examples

The 64/4 rule explained – with examples

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 the food you eat.
    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 those 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?

That’s what our One Percent Club is all about – getting you working on the 1% gains that actually make a difference in your business. The doors aren’t open right now, but you can join the waiting list for our next intake here.

64/4 rule explained

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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.

You might need more time, less stress, and a business that relies less on you as the "font of all knowledge and the god-like genius through which everything must flow".

You might need a smaller team, fewer customers, and less 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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