Pareto in Practice: The 80/20 Rule in the Age of Social Media Marketing

Posted on June 9, 2015 by Wendy H

dataThe 80/20 rule, also called the Pareto principle, is frequently integrated into strategic marketing plans, but not as frequently in digital marketing plans. However, incorporating some basic findings will enhance your efforts to produce results.

Vilfredo Pareto developed the 80/20 concept in 1906 in Italy after noting that 80 percent of the property in his country was owned by 20 percent of the population. Subsequently, he noted that 20 percent of the pea pods in his vegetable garden contained 80 percent of the harvest. While growing green peas may not have much impact on digital marketing plans, Joseph Juran developed Pareto’s observations further based on an analysis of production quality and flaws in the 1940s.

Applications of the 80/20 principle are familiar to marketing professionals across the globe now, such as:

  • 80 percent of profits derive from 20 percent of customers
  • 80 percent of sales derive from 20 percent of advertising
  • 80 percent of sales derive from 20 percent of the sales team
  • 80 percent product sales derive from 20 percent of products
  • 80 percent of customer complaints derive from 20 percent of customers

While the precise breakout varies, generally speaking, the majority of desired outcomes come from a disproportionately small effort or input. Therefore, incorporating the Pareto principle into digital marketing campaigns will help focus your efforts on those elements that produce conversions allowing you to fine tune the campaign. Regardless of the accuracy of the 80/20 breakout, you can generally assume:

  • 20 percent of inputs produce 80 percent of outputs
  • 20 percent of causes produce 80 percent of consequences
  • 20 percent of effort produces 80 percent of results

More specifically:

  • 80 percent of online sales derive from 20 percent of products
  • 80 percent of search visits derive from 20 percent of keywords
  • 80 percent of social shares derive from 20 percent of updates

In the digital marketplace, these patterns represent the long tail distribution relating to keywords and product sales. The implications direct the digital marketing manager to review online activity and identify the 20 percent of products and content that produces the majority of leads, engagement and sales. Moreover, the attention to that 20 percent will produce ideas to optimize the other 80 percent of visuals, copy and CTAs in a dynamic process that continually enhances conversion rate optimization, thus increasing outcomes.

As an alternative, reviewing the patterns in the online marketplace and studying the patterns of consumer and competitor behavior will give you insight into opportunities through the use of a gap analysis of consumer search intent or statistics on the popularity of social sharing efforts.

Thus, the Pareto principle provides a useful guide to tailor online marketing plans on a continuing basis with an eye towards growing the base and productivity of the 20 percent. In other words, 80 percent of your efforts should go to high quality content 20 percent should go towards self-promotion and branding..

Writer Bio: Wendy H works hard in life to ensure that 20% of her efforts produces 100% of enjoyment.


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