The Pareto Principle. A.K.A - The 80/20 rule.

I have heard how the 80/20 rule can apply in many ways. Gen Z would more commonly know it as 80% of females, are attracted to 20% of males. In business, it is applied very differently. The Pareto Principle refers to 20% of your product or services will account for 80% of your sales. I am just a Marketing and Business Coach, but I would say this principle is pretty telling of how a small, medium, or large scale business should market their products or services.

Having 25 years of experience in small business and marketing in Toronto, I can tell you anecdotally that there is plenty of truth to this concept. I use the term “bread & butter” a lot in my communications with clients. I am always curious to know what is the product or service that drives the most revenue for their business. Your “bread & butter” is your 20%.

Perhaps you have never even considered this, or perhaps you are currently rolling your eyes telling yourself “I already knew that”. Regardless of if this blog post serves as a good reminder, or a new piece of information, it is also your action item. Now is the time for you to consider what the 20% is in your business, and find a way to get the most out of those offers or products.

Take that 20% and turn it into revenue! Be sure to reevaluate your margins on this group of lucrative goods and services so you do not leave money on the table. Most importanly, evaluate your marketing strategy. If you know that this particular grouping is the “meat & potatoes” (I use this term often too), then implementing a strong marketing plan will lay the ground work to build more revenue year, over year, over year.

When Canadian businesses come head to head with an economic downturn, they must react quickly. This is one approach to reacting with speed, that will help you stay competitive, and most importantly, continue to thrive!