The Marketing 80/20 Rule and How to Take Advantage of it
The 80/20 rule, also known as the Pareto Principle, is attributed to the Italian economist, Vilfredo Pareto. In one of his papers, Pareto noted that about 80% of the land in Italy belonged to approximately 20% of the country’s total population. In essence, the Pareto Principle infers that there’s an 80-to-20 relationship between effects and their causes.The Pareto Principle transcends disciplines. In sports, for example, you’ll find that at least 20% of athletes win 80% of the time, or that roughly 20% of training and exercise impact 80% of an athlete’s performance. Similarly, when it comes to healthcare, about 20% of patients depend on as much as 80% of the nation’s healthcare resources.Applying it to the business world, the 80/20 rule suggests that 80% of your company sales come from 20% of your customers. Alternatively, you could say that 20% of what you do represents 80% of that particular activity’s outcome.
The 80/20 Sales PrincipleIn the sales and marketing ecosystem, you can use the 80/20 rule as a guide to come up with highly effective business solutions for your company. Below you can discover a few strategies to help you focus your attention and resources on your top 20% customers.
Discover Your Best Customers
Locate Your Customers Geographically
Identify Customer Niches
Deal with Difficult Customers
Delight Your Best Customers
Watch How Your Best Salespeople Work
Manage Your Operational Costs