A Balancing Act: 4 Ways the 80/20 Rule Applies to Marketing

The 80/20 marketing rule is based on a century-old economic principle that, despite drastic economic and technological changes over the past century, continues to be effectively leveraged by businesses of all sizes and industries. Conceived in 1906 by famed Italian economist Vilfredo Pareto, the Pareto principle observed that about 80% of Italy’s wealth belonged to 20% of the population.

Economists and mathematicians expanded on this notion, realizing that the majority of the results in almost any situation result from a small number of causes – or what became known as the “vital few”.

Below is a look at ways that Pareto's Principle has been applied to business over the past 100 years:

• 20% of employees are responsible for 80% of a company’s output
• 20% of an individual’s time is responsible for 80% of their output
• 20% of customers generate 80% of a company’s revenue
• 20% of a services features draw in 80% of the service’s clients

There are several ways to apply the 80/20 rule to your marketing strategy. Here are four examples that we encounter on a regular basis.

Creation vs. Promotion: 20% of time spent on an initiative should be spent on creation, while the other 80% should be spent on promoting it.

The bottom line is that regardless of the quality of your marketing campaign, it will not be a success if no one knows it exists. We see a lot of marketers abandon marketing initiatives that aren’t met with immediate, wild success. Before declaring a marketing endeavor a bust, things like audience reach, platforms used, media used, demographics, target needs, time of year, and other factors should be considered and revisions made. The promotion gives your marketing momentum.

Target Engagement: 20% of content created accounts for 80% of target audience engagement.

When it comes to marketing, not all initiatives break company records for the highest ROI, not every social media post will have the highest engagement, and not every article will resonate with your audience. It's inevitable that some ventures will prove more successful than others. Take the opportunity to learn from audience response and engagement and create more of the type of information and content your target market responds to.

Social Media Posting: 80% of social media posts should educate, and 20% should be about your brand.

Believe it or not, 80% of your social media posts should be educational and not focus on selling your products and services, while the remaining 20% should combine information about your company, brand, culture, etc. Something that we’re always trying to stress to marketing DIYers is the importance of education in marketing. As someone who is ultimately looking to sell their services, there is an inclination to tell your audience about some of the great features of those services. After all, you just educated them on those features, right? Not really.

So, how do you know what is educational? One way to look at this is that 80% of your social media should be about acknowledging a problem or challenge that your target audience faces that you can help them overcome, preferably saving them time and money in the long run.

Loyalty and Referrals: 80% of your revenue comes from 20% of your clients.

While that business strategy can have a lot of implications for many aspects of your business from sales to service development, marketing should definitely have a strategy in place to keep that top 20% feeling well-appreciated. Ideally, they’ll feel so pleased with your service that they’ll want to share the names and contact information of their peers who could benefit from the same type of mutually beneficial relationship that they maintain with your business. Of course, you should strive to make 100% of your customers satisfied, but there is nothing wrong with trying to build relationships that will drive your annual revenue. That’s what business is about.

While it’s one of the many marketing principles that can help shape your marketing strategy, it’s important to keep in mind that the 80% to 20% Ratio is NOT Absolute. As with any marketing principle, or for that matter - any life principle, there is no magic formula for success.

In fact, most business strategists now acknowledge that the value of Pareto’s principle is that not all things are equal. Some employees are going to go above and beyond, producing more than other members. A single amazing feature will draw in the majority of clients. Does that mean you should eliminate the less popular features of your product? Or fire less productive employees? Not necessarily. Even the highest performers and most desired capabilities are all part of a larger picture - and that picture makes up your business.

Measuring success and recognizing value plays an important role when applying the 80/20 to any part of your business strategy. For marketers, the 80/20 rule is about raising the bar, constantly striving to use metrics and KPIs to help determine what is working, what is necessary, and how you can take strides to improve your marketing as a whole.