Classic Marketing Rules – 80/20

Time for another “old school rule”.  For over one hundred years the Pareto Principle, aka the 80/20 rule, has been used by smart marketers to evaluate and improve their customer acquisition and retention efforts. The theory originally stated that 80% of the effects come from 20% of the causes.  In business, the Pareto Principle is usually presented as revenue/profit generation: 80% of your revenue, and/or profits, come from 20% of your customers.  This is critical because it shows how important the top 20% of customers are to your business.

The 80/20 rule not only applies to revenue, but also to most other media, like social media and email marketing campaigns. For example, it’s likely that 80% of your outbound posts (blog, Facebook, Twitter) are actually read by 20% of your audience.  Also, 80% of your inbound communications (replies, posts) are from 20% of your audience.

In email marketing, the 80/20 rule is applied in the likelihood that 80% of your opened emails are opened by 20% of your audience. Further, 80% of the clicks on your emails come from 20% of the people that open the email.  Go ahead, check your reports.

The key is to understand your 80/20 rules and how you can use them to your advantage.  What is it about those 20% that is different from the rest?  How can you expand that 20% out to create a new, more valuable 20%?

Remember to focus on those 20% and build around them.  Your efforts will be rewarded.  80% guaranteed!

Check out the 80/20 rule and more by downloading our presentation, “Get Old Schooled” in our Resource Center.

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