Pareto’s Law and Real Estate Marketing

Pareto’s Law and Real Estate Marketing

An Italian Economist Vilfredo Pareto in 19th Century had written an mathematical model for income distribution in Italy that stated that 80% of the land owned by 20% of people. Wealth was not evenly distributed.

Joseph Juran in late 1930’s helped General motor to solve some issues pertaining to productivity in manufacturing but landed finding a solution for decoding the “Code” and “Encoding “ as well - cutting he long story short he found in this process that all the tasks and efforts don't affect the outcome equally and in fact very few tasks and efforts are responsible for the majority of the solution or result that is expected.

This applies to everything - he concluded later on when he studied and applied, Pareto rule.

He called this research  manuscript as “ Pareto’s principle of unequal distribution”

You will see there is a huge significance in this principle, from biology to astronomy. 

And from banking to marketing.

80% of your results depend on 20% of the efforts, now this percentage may change based on what you are applying it to but 80/20 rule signifies the  disproportionate- ness.

Actual percentages may be that 90% of your results depend on 5% of the efforts or key area of work, it may be 65% of result depend on 30% of the effort or key area of work and so on but for understanding purpose and convince of conversation we say it as Pareto’s 80/20 Rule.

Now coming to Marketing in Real Estate, how does this apply ?

The principle of unequal distribution is definitely at play but since real estate is heavily driven by location of the project it will differ and alter from project to project.

Having said that I have found some hot spots of efforts on which we can focus and study if these hotspots come under the 20% ambit of efforts that will give you 80% of the results.

1.Locational Advantage - 

Many may say its obvious, but is that obvious to your client? Do we not need to emphasis on the locational advantages even if there are 15 other projects around you in more or less same location? I think locational advantage if put in better way and more studied way will make the impact of your project more. You need to try this and study if its working to extent where you get the impact on the 80% of the client.

2.People - 

From bottom up - from first phone call made or received to final hand over, if the people taking care of the clients can make sure they are speaking the right language and excelling the client expectation in terms of service every single time will that  impact the 80% result? yet another thing you need to check for your organization.And if so what are those few common things that needs to be done to have even more impact on the results?

3. Price -

In any other times, i would not have had this in my 20% impact list but it is seen for past 2 years that it is in the 20% list of things. Having said that if we bring clarity in the pricing policy for each project or each floor or for that matter each flat, it will really impact the out come. Now discussing the pricing policy and coming to the conclusion that will impact 80% of the results is a skillset that we all need to always brush up and always need to improve upon.

What is that ‘amount of lump in Rs” which will make client think about and take the decision for or against  booking at your project? Thats one of the question we must ask in this process.

These were my top 3 of the  20%  effort area. There might be few completely different set of impact factors in your case but to find them is more important now than ever before. This  is not the time for us to spread everywhere and wait for the harvest, here is the time where each seed will matter each day and efforts will be counted.

Choose your 20% carefully.

Hope, Pareto 80/20 will help you in that effort .

Advit