You may have heard in your days as a professional the 80/20 rule. But what exactly is this mysterious concept? How can I use it to my advantage. How can it affect me? First, let’s look at what the 80/20 rule really is. In 1906, Italian economist Vilfredo Pareto noticed that 80% of the wealth in a free market economy is held by 20% of the people. The 80/20 rule (or Pareto’s Principle) has since been applied to many other parts of business. For example, 20% of the work for a project would take 80% of your time. Pareto’s Principle basically states that 20% is vital, while 80% is typically trivial. So that’s all well and good, but how can I use this knowledge to further myself and my business?
- Prioritize your day. Understanding the 80/20 rule lets you know that 20% of your day produces 80% of your successes. Figure out what that 20% is and really focus on it. Make sure that the important 20% gets done, even if you have to let some of the 80% fall by the wayside.
- Know your markets. If 80% of your profits come from 20% of your customer base, maybe you can change that. Figure out where your niche is and possibly expand your market to the other 80% of customers. Creating a wide target market can be beneficial for your business.
- Understand your investments. Specifically in marketing, about 80% of your results come from 20% of your marketing messages. Recognizing which messages people respond to will help you eliminate less successful campaigns.
These are just a few ways in which to use the 80/20 rule in your daily life. There are countless other areas where Pareto’s Principle can be applied, and you can find them! Keep the 80/20 rule in the back of your mind to strategize your day, or your business!
How do you use the 80/20 rule in your life?