The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. – Wikipedia
This principle can be applied in almost every aspect of business and life. In the context of today’s article, we are going to apply it to identifying the core of your business.
Your business sells products and services. If you check your sales you will find that 80% of your sales comes from 20% of your products or services. That means that if you sell 20 product lines, 4 of those lines or 20% will account for 80% of your total sales. The same will apply to the services you offer.
Why does knowing this matter?
The implications are literally never ending. This information can help you make strategic decisions about your customer base, marketing, product development, and strategic sales plans.
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