Pareto’s Principle

80% of this page is worthless but the other 20% is a gold mine!

The Pareto Principle is a rule of thumb that has surprisingly wide application and essentially states that 80% of outcomes depend on 20% of the causes. So, in sales for example, many businesses find that 80% of sales come from 20% of their customers. Similarly, 80% of customer complaints come from 20% of customers. 80% of profits come from 20% of products or services etc.

It is not a hard and fast rule – it is a guideline. If you look at the numbers in your own business you may find it isn’t absolutely accurate but it does have an uncanny ability to be roughly right about lots of things.