Clearwater Hampers is a small British company that sells luxury food and drinks in various combinations in picnic hampers. Food and wine are seen as classic, fail-safe gifts in a market where present-buying is increasingly tricky. Corporate customers, both in the United Kingdom and abroad, are important to the business as well as are a number of department stores. Clearwater has had several orders for more than a quarter of a million dollars and prides itself on how much repeat business it does. The company's leading salesperson, Peter Austin, is placed in charge of an important territory divided on the basis of geography and sales potential. He classifies his customers according to the size of their average orders. Austin is a firm believer in the 80/20 principle. This means he believes:
A) 80 percent of his effort will not result in sales.
B) 20 percent of his time should be spent on prospecting and qualifying.
C) 80 percent of his time should be spent in follow-up service.
D) 20 percent of his customers will provide 80 percent of the sales.
E) 20 percent of his time should be spent on paperwork.

Question

Quizplus · Accepted Answer

The 80/20 principle, also known as the Pareto Principle, suggests that 80% of outcomes come from 20% of causes. In sales, this often translates to 20% of customers providing 80% of sales, which is why Peter Austin focuses on classifying customers by order size.

Clearwater Hampers Is a Small British Company That Sells Luxury