There’s no getting around it, the marketing world loves buzzwords. We’re forever talking about content marketing funnels, transparency and community-building. It can be a confusing place if you’re not au fait with the latest marketing terminology. The 80/20 rule is, on the other hand, a classic, noted as early as 1896.

It’s a solid principle that can really help you understand the needs of your business and your customers better. But don’t worry, you don’t need to arm yourself with a dictionary. We’re going to break it down for you and explain what the 80/20 rule in marketing is, and how it can help your business.

What IS the 80/20 Rule?

The 80/20 rule was first attributed to the Italian economist, Vilfredo Pareto. Because of this, it’s also often called the Pareto Principle. In an academic paper, Pareto noted that 80% of the land in Italy belonged to only 20% of the country’s total population.

You may be thinking, what has land ownership got to do with how I market? Well, stick with us. Because this rule can actually be summarised by saying there’s an 80-to-20 rule between effects and their causes. It’s a rule that can be applied across multiple disciplines.

In fact, Pareto further developed his principle by observing that 20% of the pea pods in his garden contained 80% of the peas.

Uses of the 80/20 Rule in Marketing

As you might expect from such an adaptable rule, there isn’t just one use for this rule in the marketing world. There are many. So, let’s look at a few examples:

80% of your sales come from 20% of your marketing messages.
80% of your profits come from 20% of your customers.
80% of product sales come from 20% of your products.
80% of search visits are from 20% of your keywords.
80% of social shares are from 20% of the social updates.

Of course, there are plenty more. But it can be summarised as:

20% of inputs creates 80% of the outputs.
20% of effort leads to 80% of the results.
20% of causes lead to 80% of the consequences.

Still with us? Now you understand the principle, it’s time to cut to the chase. How does understanding this rule help your business?

How 80/20 Can Benefit Your Business

The Pareto Principle isn’t a crystal ball that can help you see your exact future. But, it can help you understand your business and customers better. Let’s take a couple of marketing rules as an example.

80% of product sales come from 20% of your products.

If you know which of your products are the most popular, you can ensure a steady supply. You can also plan your marketing around these products. Making sure they’re the ones that get showcased on your websites, adverts or social posts. A huge part of serving your community and potential customer base is knowing what it is they want.

80% of social shares are from 20% of the social updates.

This is a great opportunity to look at why these updates are the most popular. Is it the products you’re showing? Or maybe the time you’re posting. Or possibly the hashtags? Analyse these posts carefully and find out exactly what it is about them that makes your customers tick.

Understanding the 80/20 rule in marketing and how it impacts your business is a great way of managing your marketing strategy. With everything from cutting costs and focusing on the 20% of marketing messages that are the most successful to understanding which customers are in your top 20% and rewarding them. Use the 80/20 pattern to become faster, better, and more profitable.

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