Save Time, Money, and Your Sanity with the 80/20 Rule in Marketing

Based on an Article by Brian Sutter:

The 80/20 rule is a potent little rule that can increase your business revenue and make your life easier.

The gist of 80/20 rule is that you get 80% of your result out of 20% of your efforts. For example, 80% of your revenue comes from 20% of your customers, or 80% of your sales comes from 20% of salesperson.

It does not always come out as 80/20. It can be more extreme as 95% of the traffic coming from 5% of the roads on your commute, or 3% of your employees creating 67% of errors. Th point is that the large results comes from little efforts.

It started with pea pods and moved on to business management

Economist Vilfredo Pareto developed the 80/20 Rule (also Known as Pareto Principle) in 1906 when he noticed 80% of the land in Italy was owned by 20% of the population. It was in garden too – 80% of his peas came from 20% of his pea pods.

Over time, it bacame clear that no matter where one looked, it was true that 80% of the results tend to come from the only 20% of the actions.

Later, management consultants like Joseph M. Juran and Richard Koch popularized this concept, since then, 80/20 has been a management and business favorite.

How do you measure it?

You have to see 80/20 in action, the best way to see it is to track it. If you can not measure it, you cannot improve it.

Tracking does not mean to have headaches, complex systems and costly efforts. Here are the few easy and inexpensive ways to do it:

  • Install free Google Analytics on your website and set up a few goals. Use these to see which actions are generating new email subscribers, orders, contact form submissions, and more.
  • Track phone calls. You can route them to a specific extension or you can ask callers how they heard about you.