The 80:20 Rule

In business, there is a common term called the Pareto Principle, also known as the 80-20 Rule, which asserts that 80 percent of your results likely come from 20 percent of your input. This principle can be applied to almost anything, from the science of management to the physical world and, of course, to marketing.

Using the Pareto Principle, you can estimate that approximately 80 percent of your business comes from 20 percent of your existing clients. How does this apply to marketing? Well, quite simply, don’t forget about your existing clients when developing your marketing calendar. Too often, businesses focus on adding new clients and lose sight of retaining their existing client base, and using that base to build new client relationships. Now, I am not suggesting you only market to your existing clients or spend the majority of your marketing budget doing so. After all, you do want your business to grow and adding customers is a crucial part. But remember how crucial your existing clients are to your business. When developing your marketing calendar, include ways to market to your existing clients, whether it’s a customer loyalty program (see below) or a referral rewards program. Just because they are your clients now, that doesn’t mean your work is done.

To discuss the Pareto Principle further and how it can be applied to your business, please Contact Me at solidoakconsulting.com.