loader image

by | Feb 19, 2019 | Productivity | 0 comments

by | Feb 19, 2019 | Productivity | 0 comments

Pareto’s law for marketing

“The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the (often positive) effects are derived from 20% of the causes.”

There are many examples of that ratio being loosely present in society and in business.

How can you use Pareto’s law in your own business?

As an example:

If we take the commonly held belief that 20% of your clients bring 80% of your profit, you can start to work out where your focus needs to lie in a number of areas.

Marketing optimisation:

If you can work out the long-term value for certain campaigns and clients acquired, and clearly know a type of quality client you obtain from the money and time invested.

You can start to focus more money and creativity on building this segment out and maximising the business benefit to your organisation.

This requires a real finger on the pulse of your ad spend, your conversion rates, and your data and analytics.

Replication and Communication:

Which can include trying to duplicate and grow your quality pool of clients via communicating the clear benefits and reasons that the pool of clients that bring you the most profit are working so well with you.


Try spending a good deal of your activity focussed on getting a feedback loop with your quality clients who bring you the most profit.

You may find out that you can work even closet and more profitably with the current clients that work well with you already.

This can be done verbally from a reach out campaign or by incentives from quizzes, or as part of a ‘getting to know where you are now’ campaign email.

Client Optimisation:

There are examples where you actually have a percentage of clients that in the grand scheme of things are actually costing you money, you service them because they were perhaps profitable many years ago, but it could be time to revisit the relationship.

We are not suggesting the ‘sack you client’ method in its harshest way.

More a case of revisiting the relationship and putting the cards out on the table and asking:

‘are we serving you in the right way’


‘we are pivoting in the business and feel that our current service offering is not an area we will be offering in the near future, we have an option of working under our new direction with a revised contract, or it may be best if you start to look for a similar supplier, we have some recommendations for you’.

The main point of the article is to REALLY get to grips with what the Pareto Principle means to you and your business, as it will help you focus and maximise many aspects leading to more quality, profit and time the more you understand its effects and work to adapt from the findings.

Putting Pareto to use

So what will you get to work on now you understand a bit more about Pareto’s law?

Do you even agree with the Pareto principles?

Do you feel it makes sense, can you see where the rule applies in other areas of your life, or do you feel it is a wishy washy made up rule that needs no further consideration?

Share This

Share This

Share this post with your friends!