Share for you: Pareto Principle (80/20 Rule) in your business!

The Pareto principle (also known as the 80–20 rule) states that, for many events, roughly 80% of the effects come from 20% of the causes.

This rule is also known as the Pareto Principle or Law of Inequality. It was first discovered by Italian economist Vilfredo Pareto. He observed that 80% of the land in Italy was owned by 20% people.
If you own a business, you might notice that:
80% of a company's profits come from 20% of its customers
80% of a company's complaints come from 20% of its customers
80% of a company's profits come from 20% of the time its staff spend
80% of a company's sales come from 20% of its products
80% of a company's sales are made by 20% of its sales staff
This distribution might be little different; it could be 90-10 or 70-30 in some cases, but the fact is, this inequality exists.

So, What you should do to apply this rule to your business?

Marketing activities

How many budget do you spend on advertising and other marketing campaigns?
In general, 20% of marketing messages produce 80% of your campaign results. Understanding which of your investments produce the greatest results. You should have a smart investment in some main channels or products. Don’t be greedy!

Product development

80% of a company's sales come from 20% of its products.
You can emphasize the value of your core products in a better way to target customers. You can also expand your business by targeting new customer groups that have the most impact on products and services.

Customer Service

Because 80% your profit may come from just 20% of your customer. You should make sure you are really caring individual customers or group customers, this may help to increase your sales or customers that you want to target in the future.
You may consider on using a customer loyalty programs to increase customer retention in both of online customers and offline customers.
Example: if you have an ecommerce store, you should use an extension like Reward Point.

Your new potential customers can know about your store through their friends – your existing customers, when their friends share products or purchases on social networking.
You can also earn money from your existing customer, who be more loyalty and believe in your products after your caring in customer loyalty programs: discount, special gift, etc.


The 80/20 principle is powerful. You can use it to save costs and improve productivity. In practical scenarios, distribution might be 70/30, 90/10 or even 60/3, but try to understand this imbalance and find opportunities to benefit from it.
Do you currently use the 80/20 principle in your business?