The principle of the 80/20 rule is that 20 percent effort receives 80 percent response. This principle applies to many aspects of engagement. It’s relatable to the law of cause and effect. The proper name is the Pareto principle discovered by an Italian economist named Vilfredo Pareto. He found that 80 percent of the landowners in Italy was controlled by 20 percent of the countryman. Of course, this was an apparent disparity, and as he continued to study, the principle had relevance in many areas. Does the 80/20 rule work for your business?
I understood it differently for many years. If you give people 80 percent of what they want, you receive 20 percent of what you need. Everybody knows that filling a need is more significant than a want. That’s how I have always framed this principle in my head. Although it always worked for me doesn’t mean it was the proper application of the principle. I’ve come to find out that the math isn’t always matching to get the outcome we desire. It begs the question of does the 80/20 rule work for your business?
In many instances, we try to grow our customer base with every promotion, be it a giveaway, slash price sale, or demonstration of value. However, despite how many eyes we receive on our product or service, you will find you get at best 20 percent engagement if you check your analytics. Despite the grand gestures you pursue to show gratitude and appreciation to your customer base, the most you can hope for is a fraction of response. Hopefully, the fraction received gives you all you need to make it worth the effort.
For example, when I make a new post in my Facebook group with over three thousand members, about twenty-four hundred members view the post. I make sure that the content has value for the viewers. Only six hundred members who view the post engage with the content. That amounts to 20 percent. Herein lies my conversion from passive to dedicated followers. It’s the faithful followers who become your customers.
Every small business owner should under-promise and over-deliver to have the best outcome. Does the 80/20 rule work for your business if you give it your all? The theory or principle suggests that you don’t have to do much to gain three-fold results. It all depends on your approach to the analysis of your productivity. After all, the customer is looking for gratification with the product or service and customer experience. You will not please everyone, but you have to make sure you deliver enough to be memorable and profitable.