Sales Modelling: Double Pyramids
Imagine we have an office of consultant. One day we would like to measure the performance of the consultant.
First Test: Technical Test e.g CFA/TOEFL/IELTS test, the result would be distributed in normal Gauss distribution. Some of consultant is very smart, some of consultant is so so. In average it represent normal distribution, just like IQ. So it is like 68% is medium, 22% is low and 10% is high
Second Test: Revenue measurement, the result would be distributed in Pareto distribution. 20% of consultant generated 80% revenue of the firm. Power Law or Pareto Distribution. Variable Invariance
I start to realized that as mention by Juran which named after Vilfredo Pareto that “80% of your sales come from 20% of your clients”. So I am making simple model how a sales person should work in the consulting firm, which would follow this distribution principles.
“IQ is distributed gaussian, but income/wealth are distributed as a power law (pareto)”