The 80/20 Rule in Marketing: How to Apply the 80/20 Rule

The 80/20 rule, also known as the Pareto principle, is a power-law distribution that asserts twenty percent of efforts account for eighty percent of results. The principle derives from the research of Italian economist Vilfredo Pareto (1848–1923). Pareto noted that twenty percent of the population in Italy owns eighty percent of the land; Romanian-American management consultant Dr. Joseph Juran (1904–2008) then applied this principle to quality control, describing how only twenty percent of production errors caused eighty percent of product defects.

Today, marketers use the Pareto principle to guide marketing efforts. In general, eighty percent of sales come from twenty percent of a customer base, and twenty percent of products account for eighty percent of sales. Using the 80/20 rule, marketers can optimize marketing campaigns to reach target audiences.

The 80/20 rule can be an essential tool in marketing, allowing brands to work smarter:

1. 1. Identify a target audience. The first step of maximizing the 80/20 rule is identifying what twenty percent of your base is driving the majority of your sales. You can do this by analyzing open rates for emails, combing through customer profiles alongside sales sheets, identifying repeat buyers, and adding customers who make the most significant purchases to a tracking document.
2. 2. Research SEO. After securing your target audience, use search engine optimization (SEO) tools to identify what your audience is looking for online. These keywords will inform your copywriting and content creation to reach your current target audience and potential customers.
3. 3. Optimize ads and efforts. Optimize social media posts targeting this key audience to maximize return on investment. You can also employ influencers to help expand your brand and attract customers via content marketing.
4. 4. Analyze and adapt. Businesses monitor their most profitable target segments constantly and then split them into smaller, more specific groups. Segmentation helps companies refine their marketing efforts and make them more appealing to these subgroups, strengthening bonds and sales.

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