In Business Management circles, we owe a debt of gratitude to an Italian economist. The man's name is Vilfredo Pareto. Pay attention because if you remember his first name you will impress all your friends and get extra credit. He lived in the 1800's and was the son of an Italian civil engineer. What does this have to do with real estate you may ask?
He came up with this very worldly principle called the Pareto principle. Others of us refer to it as the 80-20 rule. It is an observation on numbers for the mathematicians out there, and can be extended to life as well. It can be categorized as the vital few and the trivial many. What you want to do in life is focus on those things that give you leverage on the whole.
The observations included such things as 80% of the income went to 20% of the population. Or, 80% of sales came from 20% of the customers. You can extrapolate many things in life to this 80/20 rule. 90/10, 70/30, 95/5 rules abound showing that this is an inexact science but these out of balance proportions exist nearly everywhere.
A while back I saw an eye popping statistic that said 7% of Realtors sold 93% of the real estate. If this is true, it is really amazing and can probably account for the "part timer" label on so many Realtors or account for the high turnover in the ranks. But it is important to note that "despite" a 93/7 rule in sales in real estate the agent that sells four houses a year still could give a client GREAT service! You also might not be buried in the noise level as far as attention from the large teams. So little guys, don't despair!
80/20 and Mr. Pareto are an interesting phenomenon to understand. But this is a people business and a good agent is still a good agent.
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