Improving Marketing Efficiency with the 80/20 Rule

August 23, 2021 CONRIC PR

Here’s a riddle for you:

What does the distribution of wealth in Italy in the 1800s have to do with marketing? 

If you don’t know the answer, allow us to introduce you to Vilfredo Pareto, a 19th Century Italian economist.

Back in 1896, Pareto made an interesting discovery. He realized that 80% of the land in his homeland was owned by just 20% of the Italian population. Pareto began looking at the distribution of land and wealth in neighboring countries and realized that they shared the same distribution. This power law became known as the Pareto Principle, or more simply, the 80/20 rule.

As it turns out, the 80/20 axiom applies to more fields than just economics. In health care, roughly 20% of patients account for 80% of total health care resources. In law enforcement, 80% of crimes are committed by about 20% of criminals. And in sports, approximately 80% of the scoring comes from just the top 20% of players.

In essence, the Pareto Principle says there’s an 80-to-20 ratio between effects and their causes: The best 20% of effort leads to 80% of the outcomes. Not surprisingly, this relationship also exists in the business world.


The Pareto Principle in Business 

For most businesses, roughly 80% of their profits are generated from sales to the top 20% of their customers. Approximately 80% of product sales come from just the top 20% of products. Close to 80% of website visits come from just 20% of search terms. And the top 20% of social media posts are responsible for 80% of social likes and shares.

Of course, the 80/20 rule can also apply to consequences, as well. About 80% of customer complaints come from just 20% of customers, and roughly 20% of your employees will be responsible for 80% of those complaints.

The 80/20 rule isn’t a hard and fast mathematical law. The ratio can vary from situation to situation, but the principle still exists: a relatively small percentage of your efforts result in a disproportionate percentage of your outcomes. Understanding how the Pareto Principle works can help you make stronger and more efficient business decisions, and these include your marketing choices.


Using the 80/20 Rule in Marketing

You can implement 80/20 in your marketing efforts to gain a better understanding of your customers, your products, and the messages you produce. First, take a look at who your top customers are, and make them a priority in your marketing. Then, use the available data you have about them to try to identify similar prospective customers. For example, if several of your top 20% are women between 45-60 who live in Bonita Springs, targeting this demographic in future campaigns will likely earn you more loyal customers.

Next, take a good look at your products and services. If 80% of your sales come from just 20% of your products, then you know which products your customers love. Make sure to keep those products readily available and incorporate them into your marketing, whenever possible. Feature these products in your ads, email blasts, and social media to pique your potential customers’ attention.

Have you noticed that your social media followers are responding to certain types of posts more than others? Close to 80% of your likes, comments, and shares are likely coming from just 20% of your messages. Take a close look at those top posts and see what they have in common. It might be the images, hashtags, days/times posted, or some other factor you haven’t considered. Not only will this research help you to make your future social posts more engaging, it’ll also help you better understand your customers.

Knowing the Pareto Principle can make your marketing efforts—and your business in general– more efficient. You’ll work smarter instead of harder, set better priorities, and improve your return on investment.

If your company or organization is in need of assistance with marketing, websites,  press releases, social media and more, give the PR and marketing experts at CONRIC pr + marketing a call at 239-690-9840 or email us at to schedule your complimentary consultation today.

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