A Guide to Applying the 80/20 Rule to Your Marketing

The 80/20 rule is a simple yet powerful principle that can help you save time and double your ROI. But what exactly does it mean? How do you apply the rule to an industry like marketing, which has so many factors influencing results instead of a specific business segment of retail or healthcare? Let’s break down this experimentally validated 80/20 principle to understand better how it applies and when might be the best times to use it. First, it’s in. sual that marketing is your exclusive occupation even if you work in marketing. Marketing is merely a portion of your profession, whether you have the title “marketer” or you own a firm and need to market it. You most likely assist with sales, product development, customer service, and any other responsibilities that come up. This is why marketers are sometimes referred to be “wearers of many hats.” Could I tell you something that the vast majority of people never learn? This does not have to be the case. Marketers are compelled to do so many things because there is too much to do. In other words, most firms desire to do many things that don’t help them develop. As a result, they squandered time on ineffective tasks (sometimes known as “busy work”).

So, what are your options? You may or may not be aware of it. First, you must eliminate non-productive activity. The 80/20 rule is the most remarkable technique I know of to do this. It may be used in almost every facet of life, including marketing. I’ll show you six different methods to use the 80/20 rule in your marketing to save time and improve the outcomes of your efforts. If you haven’t applied this rule previously, this post might be one of the most important things you have ever read.

How may the 80/20 rule help you live a better life?

Vilfredo Pareto’s observation inspired the 80/20 rule. When he plotted the frequency of an action, he discovered that 20% of the activities produced 80% of the total outcomes.

This, he realized, extended to almost every aspect of life, including business. The graph above clearly depicts the three most serious issues a firm may face. Wouldn’t it make more sense to focus your efforts on those three and ignore the minor issues? It would, of course. The 80/20 rule applies not just to particular problems but also to effort (activities).

It’s pretty straightforward: You’ll get 80% of the outcomes if you put in 20% of the work. This also indicates that 80 percent of your work yields just 20% of the products. So don’t worry if it’s not entirely evident how it will benefit you as a marketer right now.

Various scenarios that will make the Pareto principle very evident:

1. Double down on the marketing channel that works for you.

There are tens of thousands of different marketing channels available. Most likely, you will concentrate on 5–10 of these (maybe more if you have a big team). You’re probably using far too many marketing platforms. We may claim that around 20% of your marketing channels provide 80% of your marketing outcomes if we apply the 80/20 rule to the case (likely sales). First, identify your most productive marketing channels: I don’t want you to take my word for it; I want you to put the Pareto principle to work in your marketing. It’s not complicated, and I’ll guide you through it. Begin by listing all of the marketing channels that you use regularly. In a spreadsheet, create a column for them. Begin by calculating how much time you’ve spent on each channel so far. It doesn’t matter how long you’ve been producing as long as you know how much you’ve generated throughout that time. For example, you may claim that you spent 20 hours writing five blog entries last month. You’ll obtain an accurate appraisal as long as you follow the outcomes from those duplicate postings. Then, since time isn’t free, attach a value to it. Finally, provide a column for any extra funds spent on content creation or promotion. When you’re finished, your table should look like this (an imaginary example):

Then, in a new column, tally up those charges (your time plus the money you spent). Then, next to that one, add a new column and note the number of sales you made from each channel within the period you monitored. Here’s the most recent version of our graph:

We’re nearly done; just two more columns remain. We must account that we spent varying amounts of time on each channel in the following column. This column will show the profit you earned for each channel divided by the time you spent on it. In the given example, the profit from Advertising on Facebook is $3,000 – $1,000 = $2,000. When you divide it by the 5 hours worked, you get $500 per hour. That should be done for all of your channels. We can now add them together to obtain a total since they all use the same unit of measurement (meaningless other than for the final step).

Finally, we must determine how much each marketing channel contributes to the total. Divide the “profit per hour” value by the “total sales” number in the last column and multiply by 100 to obtain a percentage. Here’s the whole graph.

It’s relatively simple to make your Pareto chart. Copy the channel column and the final % of the total column to a new page and paste them next to each other. Then, from high to low, sort the percentages. Finally, create a column for the “total cumulative.” The first number is the same as the percentage of the entire amount. Then, simply add the previous cumulative total to the current channel’s “% of total” number. This is how it appears:

Do you see that the total cost of Facebook advertising is 43.15 plus 27.25? Finally, let’s compare the channels to the overall total. You may make it fancier, but it should look like this (I added a red line at 80%):

The data clearly shows that the three marketing channels account for around 80% of total revenue. You might also notice this by looking at the statistics beforehand, but if. Still, attempting to persuade a supervisor to accept some of the ideas in this article, a Pareto chart is always appealing. Three of your eight channels isn’t quite 20% of your total input, but it’s close. You’re unlikely to achieve an exact 80/20 ratio, but you’ll notice that the majority of your outcomes come from a small number of channels. Because we’ll be repeating this method throughout this essay (and I won’t go into as much depth then), you must grasp it. In this case, use the 80/20 rule to your advantage: What did we think when we accomplished all of that? For the sake of amusement? That’s not the case. So let me pose a question to you: What if you just stopped utilizing those marketing channels that provided less than 20% of your total returns but consumed around 80% of your time? It’s reasonable to assume that your sales (or whatever statistic you’re using) would drop by about 20%. It’s a significant quantity, but it’s not fatal. But there’s another benefit: you’d be able to free up around 80% of your time! Do you see what I’m getting at here? With more time on your hands, you can put it to better use by directing it to the marketing channels that give you the most bang for your dollars.

In this hypothetical scenario, we could devote additional resources to:

• affiliates
• Facebook advertising
• blogging

A word on the scale: You’ll notice that specific channels scale better than others. For example, the time spent on “affiliates” is spent chiefly on maintaining them and sometimes delivering them supplies. You can’t spend any more on it since the outcomes will remain the same. On the other hand, you might devote more effort to recruiting affiliates. You’d have to test this to see whether it produces a satisfactory return. However, specific channels, such as advertising channels, grow very well. There are very few reasons you couldn’t spend more time planning and conducting Facebook advertising, except for depleting your whole target demographic. The sales may not fully scale up, but you’ll obtain most of the results. In my case, the total time was 151 hours. We could free about 112 hours of your time by removing those low-performing channels (74 percent of time spent). Our entire income would grow from $15,700 to $30,300 if we spent those 112 hours on advertising and received even half of the outcomes. That’s a significant difference. Because it scales effectively, you should acquire more than 50% of the products from your additional advertising. You may also use part of this time to experiment with other advertising channels. Blogging is somewhere amid these two other channels when it comes to scalability. You can make more posts and gain more responses, but there is a limit.

You’re not going to see much of a benefit if you’re creating so much stuff that even your most ardent followers can’t keep up with you. With every channel, you want to see whether investing more time in it is worthwhile. Invest your newly found spare time in the media that provide the best results. A case study of a million users: The 80/20 rule isn’t new, and several studies show it is effective. Noah KagaWhile was in charge of marketing, n’s marketing approach at Mint, while hf my favorites. He had just one goal in mind: to increase the number of users. And after analyzing his findings, he discovered that email marketing was the most effective technique of attracting new users. As a result, he concentrated all of his efforts on increasing the number of emails he received. He mainly employed advertising and guest writing since he concluded that these were the most successful routes for gaining followers. So, how did he fare? After a year, Mint has surpassed its original target of 100,000 users, with the firm now boasting over 1,000,000 members.

2. Not all clients are created equal; identify your most significant customers.

I’m sure you’ve observed that some of your clients are fantastic and others are awful. However, you may not know how to put this knowledge to good use. The 80/20 rule comes into play here.

You may use the Pareto principle in two ways for your consumers.

• Method 1 – 20% of customers account for 80% of revenue: Assuming you have a well-developed product line, you’ll discover that 20% of your clients account for 80% of your income. These consumers purchase in bulk, buy a lot of various things, or just buy regularly. They’re also simple to locate. You may create another chart in the same way that we did previously.

You’ll want to add five parameters in this chart (one column for each):

1. A list of all of your clients.
2. How much money they’ve brought in.
3. How long have they been a client? (could do months or years).
4. To make a fair comparison, split the income by period. Then, to obtain a total, add everything up.
5. Each customer’s proportion of total income (during that period) (divide their monthly revenue by the total, e.g., 100 / 2,790 x 100).

As an example, I created the following table:

You’ll almost certainly have more than ten consumers, which should improve your results even more. In my hypothetical scenario, 30% of the clients generated 75% of the revenue. What are our options for using this data? This is when the real fun starts, but you must be willing to put in some effort. Now it’s up to you to research your consumers and determine how your top customers vary from the others.

What should you be on the lookout for? To begin, consider the following:

• the rationale for purchasing (e.g., personal use, family event, business event, etc.)
• the size of the company (if B2B sales)
• statistics on the population (e.g., age, location, income level, gender, etc.)
• (How did they hear about your company for the first time?)

In a few key areas, you’ll notice that your typical top client differs from your other customers. For example, you could discover that all of your best clients are corporations who place substantial orders regularly. Do you know what you should do with this data right now? You don’t in earlier situations, you’ve to drop that 80% of low-revenue-producing clients, as in don’t want to spend time attempting to gain more of them, however. Instead, now that you know the fundamental characteristics of your best consumers, go out and discover more like them. You need to rethink your marketing and sales approach to focus on attracting new clients who will boost your income significantly. That’s all there is to it.

• Method 2 – 20% of consumers are responsible for 80% of complaints: Complaints are a perplexing aspect of the business since they may signify a variety of things:

1. The consumer isn’t happy — some individuals will always complain about something. Unfortunately, they are a waste of time and resources for your customer support department.
2. There is a problem — customer complaints often provide opportunities to enhance your product and marketing.

You should make a record of all of your consumer complaints, along with who made them. Remove any that indicate a real problem with your product that must be addressed. You’d want to hear those gripes. Then you have to deal with complaints from fussy clients. Take a moment to see whether those clients are in the top 20% you identified before. If that’s the case, they’re probably worth the trouble, so cross them off the list. You should notice that around 20% of your clients are responsible for 80% of the complaints on the remaining inventory. It’s not worth it to devote significant customer support efforts to these low-value consumers. It not only eats into your profit margins, but it’s also a constant source of difficulties to deal with. If feasible, eliminate the 20% of consumers who have nothing better to do than look for problems where none exist. It may seem harsh, but it will make your job a lot more enjoyable and straightforward. The money you save by not dealing with these problems frequently covers the minor income loss from these complainers. You’ll also likely discover that the most vocal critics are the smallest customers, as is the case in practically every industry.

3. How to use the 80/20 rule to reduce your content production time?

Few things consume as much time as content generation in the life of a marketer. It would assist if you could outsource it, but it will be costly. Most marketers aren’t aware that they’re producing much more content than they need. Using something called the 80/20 rule, we’ll see whether you’re one of those marketers. Have you come across it before? Can you figure out how this relates to your content creation?

Here’s how I see it:

Only 20% of your content will generate 80% of your traffic or email subscribers. The strategy we’ll use here is the same as I just demonstrated in the previous section. We can learn about the top 20% of content that generates more traffic than the rest by examining them. First, applying the 80/20 rule: Because you probably already have all of the data in Google Analytics, this is a relatively straightforward area to use the rule to. In Google Analytics, go to “Behavior > Site Content > All Pages” to see all of your articles and the number of visits they’ve received.

I’d choose a term of 6 to 12 months. Next, export your data to a spreadsheet and sum up all the pageviews to obtain a total quantity of traffic. Finally, add a column to your spreadsheet to compute the proportion of total traffic that each page has received. As you may assume, most of your traffic will come from a small number of your pages. Now it’s time to analyze: just knowing which sites generate the most traffic isn’t enough. You must investigate it.

To do so, create a column for each of the following content qualities and fill it up for all of your posts:

• subject – make a list of the categories that each post belongs to.
• Length – what is the size of your content (word count)?
• Is it a blog entry, an infographic, a video, or something else?
• Is it an instructional, an opinion piece, a Q&A post, or something else?

Against detect patterns, compare all top articles to the bottom ones. Ideally, you’ll notice that some subjects tend to yield the best pieces. Or if longer material, such as movies, generates more views and so on. Stop using the methods you discover in the bottom 80% of your content after understanding why particular pieces are more likely to perform well. Simultaneously, change your content creation approach to include more of the stuff you discover in the top 20%. Finally, if you’ve been having trouble producing enough material, try reducing your output. You may build your traffic much quicker than previously just by concentrating on more successful sorts of content.

4. When it comes to substance, the 80 percent rule applies.

This is a unique implementation of the 80/20 rule. I’m simply going to give you the answers because you don’t have to perform any of your analyses. What you may do is compare your content generation and marketing times in terms of outcomes (traffic, email subscribers, or whatever you measure). Unless you already have a sizable following, you’ll discover that it’s the promotion labor that yields accurate results. The more time you spend promoting yourself, the greater the outcomes. In this case, the 80/20 rule will be applied backward: Your objective should be to devote around 80% of your effort to content marketing and 20% of your time to content production. Spend approximately 20 minutes advertising a post if you’re presently spending 5 hours generating it. Spend about 80 hours promoting your guide if you go all out and build a 20-hour guide. “How am I meant to advertise anything for so long?” most marketers ask when I advise them to do this. I’m going to run out of things to do.” This may need learning new promoting techniques or going further than you’ve ever gone before. Many marketers can obtain a few hundred email addresses to distribute their material. Try looking for tens of thousands. It’s not easy at first, but you’ll become better with practice. It’s the same with any marketing strategies: make more advertising, post more on forums and groups, and so on.

5. Stop spending time on out-of-date marketing strategies.

It’s time to address a point raised in the preceding section. Just because you should devote more time to content marketing (even if it means reducing content production) doesn’t imply you should do so. It means you should use that time to the advertising strategies that provide the highest return on your investment. When you use the 80/20 rule, you get something like this: You’ll get 80% of your outcomes if you put 20% of your advertising effort into it. The results in this situation may be traffic, subscriptions, sales, or backlinks. Time to monitor and analyze: I won’t go into as much depth here as I did with the other instances we’ve looked at so far.

You’ll need the following five columns in your table this time:

• First, what you did to promote your material as a promotional activity
• time spent — the number of hours you spent on it.
• Consequently, traffic — this may be a different statistic like backlinks or subscribers.
• Traffic per hour – the preceding column’s traffic divided by the time spent; add the totals at the bottom.
• Divide the traffic per hour by the total value for each activity (e.g., 300/1,466 for email outreach) to get a percentage of the outcome.

Here are some purely fictitious outcomes:

The outcomes are unmistakable. Email outreach and contacting subscribers create practically all products in terms of productivity (results for the time invested). They only take up 5.5 hours out of a total of 11.5 hours, yet they create 88% of the outcomes. So, what’s next? Let’s take a moment to consider your alternatives. I’d recommend beginning by eliminating those tasks that aren’t working well. In this case, you’d save 5.5 hours out of 11.5 hours while only losing 12% of your traffic. Not all promotional strategies are scalable for marketing channels, as we’ve seen previously. You can’t afford to waste any more time contacting your list. However, you may use that additional time to increase your subscription count. You may use that time to focus on strategies that scale. If you’re willing to go beyond the first few pages of Google results and become inventive, email outreach scales very well. Consider what would happen if we spent those 5.5 hours on email outreach in our hypothetical circumstance. The total traffic would grow by 40%, from 2,500 to 3,500. When you consider that you’re spending the same amount of time on your marketing as you were before, it’s a significant boost.

Furthermore, recall that I advised you to devote more time to advertising in the last part. When you spend more time on them, applying successful advertising strategies is even more crucial. Therefore, these two essential improvements (spending more time and concentrating on the most successful 20%) will significantly influence your content marketing outcomes.

6. Individual marketing channels are also subject to the Pareto principle.

Finally, the Pareto principle may be applied to specific channels, such as search engine optimization. Navigate to “Acquisition > All Traffic > Channels” in Google Analytics and click the “organic search” option that appears. Finally, set your primary dimension to “landing page.” You’ll see a list of your posts sorted by how much search traffic they’ve received. Increase the duration to at least 4-6 months. As a result of our investigation, we’ve discovered that: Twenty percent of your content generates 80% of your search traffic. Export the Google Analytics data to a spreadsheet, then add columns for percentage and cumulative percentage:

Divide the number of visits to a page by the total number of visits to obtain the percentage value. Then, as we did before, compute the cumulative percentage. Make sure the list is ordered from greatest to least traffic, then multiply the rate by the preceding cumulative percentage figure (for example, 35.647 percent = 16.404 percent + 19.243 percent in the chart below).

The top 20% or so of postings are the ones you should pay attention to. They’re the sites with the highest search authority and carry information that people are looking for. Therefore, it seems logical to concentrate on increasing these sites’ search authority. They’re probably in the top ten for a variety of keywords. It’s a lot simpler to get them to the top three results than it is to start with material that ranks on page two or more for most queries. Next steps: Go to Google Webmasters Tools/Search Console to see which keywords those sites rank highly for (but not in the top three) (or GA if you have GWT integrated). Go to the left menu’s “Search traffic” option, then to the queries sub-option. Finally, on the resulting screen, choose the “pages” radio button:

This is how the pages button appears:

Then you can look at the keywords each page ranks for by clicking on them. Finally, concentrate your link-building efforts just on these top sites. Simply shifting your emphasis will significantly increase your search traffic in a brief period.

Conclusion

You’ll constantly feel like you have more work to do as a marketer. So rather than burning yourself out, seek for methods to improve your efficiency. One of these methods is the 80/20 rule. I’ve shown you six distinct ways to use the rule to boost your marketing and maybe your whole company. If you put some of them into practice, you’ll be able to achieve the same outcomes in half the time. And now you know how to take advantage of the additional time to get even more significant consequences.

Frequently Asked Questions

How does the 80/20 rule work?

A: The 80/20 rule is a concept used in economics that states that there are always several causes at work for any given outcome. According to the marginal utility theory and this principle of cause-and-effect relationships, everything has limited use or value. Using the example of salt vs. sugar about food items on a dinner table, it’s hypothetically possible for someone with very few spices (which might be just salt). Still, many sugar varieties have come into play due to their greater usefulness in cooking.

What is the 80/20 Principle, and how does it apply to sales performance evaluation?

A: The 80/20 Principle states that 80% of a process result will come from 20% of the input. In sales, this implies that if you spend your time focusing on delivering high-value items to customers with good margins, you’ll be able to see substantial results in terms of revenue and customer satisfaction.

What is the 80/20 rule in sales?

A: The 80/20 rule is the principle that a few things may produce most of the results. It states that 20% of your sales will come from 80% of what you sell, and vice versa.

Related Tag

• Pareto principle