Sometimes the Answer is NO!
- For this article, Log In to:
- View eVersion | Download PDF
The Pareto Principle states that roughly 80% of the effect comes from about 20% of the causes. Stated in our business terms, this means that we make about 80% of our money in business from about 20% of our clients. Or, yet another way, most of what we get comes from a small segment of the people we deal with each day.
There seems to be a somewhat different version of this that affects what we do in the fitness business. We will call this the Plummer Principle for obvious reasons. The Plummer Principle states that the bottom 20% of the members in most box clubs, and even in some training clubs, should be driven into the wilderness with fire and pitch forks because of the drain they put upon the owners and their resources.
People go broke ignoring the Plummer Principle by trying to build a business for the bottom 20% of the food chain who are too poor, too ignorant and too classless to understand or use the product. Their needs are simply beyond the scope where you can offer service and support and still make money.
Airlines are a perfect example of the Plummer Principle gone too far. Almost every decision a major airline makes is based upon dealing with a client that should be sitting in the last seat of a Greyhound bus rather than flying in a cheap coach seat.
Fares are set for the bottom 20% who complain that flights are too expensive and will shop ten different websites before buying a ticket that is $4 less than the first nine. The fares attract the low-price idiots and then the rest of us have to pay for every extra a marketing person can create to make up the difference of what it really takes to maintain the business.
To view the full article, please Log In.
If you are not a Paid Subscriber, we welcome you to Subscribe Now.