Remembering 80-20 And How It Applies To Your Agency Business

An Italian economist named Pareto proposed the 80/20 rule. According to this rule, 80% of the results come from 20% of the efforts. When applied to the business world, the power means that only 80% of a company’s sales come from its 20% customer base.

How Does the 80-20 Rule Work?

This rule often indicates that 80% of a company’s revenue is given rise to 20% of its customers.

This way, it can be profitable for a company to focus on the 20% of clients that account for 80% of revenue and market to them. By doing so, the company can retain those customers and acquire new customers with similar characteristics.

How To Appeal the 80/20 Rule in Business:
It will help if you get maximum output from minimum input when running an agency business. Here are how intelligent companies work. So, work on the three things that will provide you with the best results.

1. Be Clear on What You Are Doing: As a business proprietor, you need to understand your job thoroughly. Once you understand each aspect of your service offering and your business, you can identify problem areas and work on these problems will increase your business efficiency.

2. Measure: Everything must be measured using analytical tools. Here is the only method to find out what works and doesn’t. Many analytical tools are available online. For web analytics, you can use Google Analytics to set up goals and check your performance.

3. Think Boldly and Work Smart: Working smart requires you to think outside the box. Be brave and take some chances. Remember, take calculated risks only when the odds are in your favor.

How to Use the 80/20 Principle?

1. Look at Social Media Results: Social media is prevalent these days. Businesses use social media for better business leads. It also helps in building brand loyalty. Using social media analytics, you can find out which social media strategy works for you on which platforms. You can use this insight to focus on methods that deliver 80% of the results.

2. Know Your Customers and How They Order: Understanding your customer is very important. So studying how they order and how much they order. This information is essential to find the people who contribute the most to your revenue. Finding this information is accessible using analytics.

3. Budget Efficiency: Both over-budget and under-budget are detrimental to a business. Studies show that most new and small businesses spend 7% of their revenue on marketing. Using the 80/20 rule, you need to figure out the marketing spend that will get the best results.

4. Time Management: Being a business owner, you probably think that you need to work 24/7 to be successful. Streamlining your processes is another way to increase your productivity. The 80/20 rule is everywhere. 20% of the activities undertaken cause 80% of the time wasted. To manage time better, take steps to analyze, understand, and reduce just 20% of activities.

5. Leave That Which Does Not Sell: You may make many products or offer a mix of services in your business. However, you may have noticed that these earn you a different amount. It means that only some of your lines are equally profitable.

It’s a good idea to leave behind what doesn’t sell. You will get 80% of your high-profit services and 20% of lost revenue. It’s a process that constantly needs review and refinement.

As a business owner, it’s up to you to use the 80/20 rule to your advantage. This rule is not something pulled out of thin air but a strategic, simple way to see the path to continued growth and success.


Wherever any material is quoted as sourced from the published text with publishing rights vested in an individual, it is stated that it is a pure quotation and has no intention to claim it as our own.

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