![]() ![]() Related: Product Profitability: Definition and Methods 3. Instead of promoting products that don't make big sales, you can focus on improving the top-selling 20% of products or services by launching new updates or improved features to provide customers with better quality to encourage more purchases. Identify profitable productsĪ company may have a few products that customers love, contributing to 80% of the total sales. Related: Target Market Analysis: What It Is and How To Make One 2. Leveraging point of sales (POS) platforms to see the regions where your customers come from can be a great way to target more customers from more precise locations. Knowing where customers live may make it easier for you to target them. Finding where 20% of the customers come from can help you optimize your strategies to find more customers through the same channels.Īnalyze where customers are. Identify the sources that brought the customers to the products or services, whether through social media or targeted advertising. Your sales log shows daily, weekly and monthly sales and provides insights that can help you develop new marketing strategies. Check the logistics and data of the sales to identify the customers who make frequent or the most recent purchases. ![]() Here are some ways you can discover the best customers: Identifying the 20% of customers who purchase most of your products or services can help you develop marketing strategies to attract more like-minded customers. The best customers often bring in most of the profits, meaning 80% of sales may come from 20% of customers. Related: The 80/20 Rule Explained (Guide to the Pareto Principle) 8 ways to use the 80/20 ruleĪpplying the 80/20 rule in a business can help you track sales activities and determine the most important factors to consider. Here are ways you can start implementing the 80/20 rule to improve efficiency, increase sales and grow a business: 1. The 80/20 rule can contribute to your strategies and help with your thought processes, but more reliable business information comes from research, reports and analytics. Some of your results and actions may have higher or lower percentage rates. You can apply the 80/20 rule in any situation, but it isn't a foundational law to dictate your actions. Here are some common ways to use the 80/20 rule:Ĩ0% of results are a product of 20% of time invested.Ĩ0% of complaints come from 20% of customers.Ĩ0% of global pollution originates from 20% of factories.Ĩ0% of online product sales come from 20% of products.Ĩ0% of website traffic comes from 20% of keywords used. You can use the 80/20 rule to help develop effective marketing strategies. Economist Vilfredo Pareto thought of the idea when he realized approximately 80% of his nation's land belonged to 20% of its population. The 80/20 rule, also known as the Pareto principle, is a marketing strategy that says 80% of your results are a product of 20% of your actions.
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