With this article we conclude our two-part review of Richard Koch's The 80/20 Principle. We focus on Chapters 5 and 6. We do recommend reading this entire well-written book, but since we are trying to follow the 80/20 rule, we are only focusing on the 20% of the content that supplies 80% of the small business marketer's return on time value.

Chapter 5, Simple is Beautiful, reaffirms an essential theme that many small business owners are already intimate with: simple creates more profits. Koch supplies evidence to this fact, but most of us in small business have seen this truth again and again. Creating complexity just makes for less money in our pocket. It's the kind of common-sense that we need to hear reaffirmed; however, as we all tend to make things way too complex. Koch has a couple of very simple guidelines for us:

First, focus on what we are best at: decide which is the part of the value-adding chainwhere your company has the greatest comparative advantage--and then ruthlessly outsource everything else. (p. 89). Although Koch is applying this process to the entire company, a small business marketer must adapt this same thinking to her own promotional and marketing and branding efforts. It's important to identify what you, as a marketer, are best at and then hire out the rest.

The second good insight in Chapter 5 is to Cultivate the simplest 20 percent. Refine it until it is as simple as you can make it. (p. 91) Marketers must make our message simple and not just easy but effortless to understand. Customers must know your message well enough to articulate it back to their friends and family.

This chapter also holds a wonderful illustration of the power of a simple graphic to explain a numbers-based idea. Look at the bar chart on page 97 and you instantly understand the point he is making. Next time you are preparing marketing materials that show benefits to your customers, you might look at this simple way of illustrating a point. (You'll be able to add color to pump it up a little more.)

Chapter 6, Hooking the Right Customers, contains this advice: If the product range is extended into too many new areas, or if the obsession with customers leads to recruiting more and more marginal consumers, unit costs will rise and returns fall. As Chief Marketing Officer, you can affect the type of customer your company attracts. In the long run this ability to select profitable customer is one of the most important decisions you can make.

Koch has another insight for marketers: your unique product or combination of products set you apart. If you don't have this you must use innovation to develop new products. (p 104) This is close to what Scott Bedbury mentions in A New Brand World. This simple truth is often overlooked in much of the advice geared toward today's corporate marketer.

But the small business marketer is close to management and the customer. You can work with both to develop products that make money for the company and provide value for the customer.

Finally, page 116 and 117, Koch's Five rules for decision making with the 80/20 Principle are a worthwhile read for any of us faced with so many decisions, so little time.

In The 80/20 Principle Koch has written a book worth underlining, highlighting, and writing in the margins. It's the type of work we recommend you pull down every six months for a quick self-diagnostic and review. But, just focus on those vital few sections of the book that can gain you 80 percent of the results, in 20 percent of the time

Remember: Brand (who you are) + Package (your Face to the Customer) + People (customers and employees) = Marketing Success.

2006 Marketing Hawks