Friday, June 13, 2008

Summer 80/20 Rule

Summer is an interesting time, especially compared to Christmas. During Christmas, customers come arrive in smaller numbers and buy large "tickets" worth of stuff. The store is actually less full than normal, but customers need more attention, because they don't know what they're doing. These aren't my customers, they're friends and relatives of my customers for the most part. Considering the hand-holding and hand-selling required during the holidays, I would characterize it as 20% more effort for 80% more sales. It's the 80/20 rule, which I wrote about before. That's phenomenally good, but unfortunately it only lasts about a month.

Summer has it's own 80/20 rule, only in reverse. Summer is our primary sales season. Kids are out of school, adults are on vacation and people generally have more free time. I don't understand how, because I always worked through Summer like any other season, but adults seem to shift gears during this time. Kids, however, make up the majority of the sales boost, but they're incredibly labor intensive.

Children ask lots of questions, which is actually a good thing. I wish adults would ask questions when they don't understand something. Children also mess up shelves, haggle endlessly with their parents in a way that makes me want to gouge my ears, and eventually make small purchases with handfuls of change acquired from their sock. There are lots of children and occasionally you can even catch a fad that boosts sales even further. One Summer Star Wars miniatures was being played at the local Summer school and there was a kid coming in every 30 minutes to buy a booster. Amazing sales but pretty labor intensive. So Summer's 80/20 rule is that it takes 80% more effort to make 20% more sales.

The conundrum is that the labor justifies an additional employee, but the resulting sales do not, so we make due.

I like this graphic. I believe it refers to the Pareto principle applied to sales,
in which 20% of sales people make 80% of the sales. Can you live without the other 80%?
If you drop the other 80%, will the good 20% re-distribute back to the 80/20 rule?

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