This is the third part of a four-part blog series. I will be publishing a new post every Wednesday. To see the entire series, please check here.
This one is a little spooky. The 80/20 rule, also known as the Pareto Principle or the law of the vital few, states that for many events, roughly 80% of the effects come from 20% of the causes. Many natural phenomena have been shown to exhibit this same distribution.
It might sound strange, but I’ve found it’s a bit like a magical breakdown that keeps coming back in business, digital business and even in “old fashioned,” traditional business.
Think about it this way:
Does 20% of your marketing spend brings in 80% of the results?
Do 20% of customers bring in 80% of your revenue?
Does 80% of customer acquisitions come from marketing, 20% from sales?
And the list goes on and on...
So what are the lessons here? Is it good or is it bad? I’m not sure. All I know is it can pay off to watch out for this type of breakdown to understand why it is so, has it always been this way, is it so for other companies that are considered successful, etc.
It might be a little witchy, but it’s a pattern that has continued to repeat itself throughout generations so it’s worth keeping your eye out for it. By monitoring it, you may be empowered to cut down budget without cutting down results proportionally. Always handy in Marketing!
Article may also be found on LinkedIn