Marketing: Pareto’s Principle

In the digital marketing world the only way a company can thrive is to utilize their viewer-ship into consumers. A principle all digital marketers should take into consideration is the Pareto Principle. This rule is founded upon the basis of 80/20. Which means that in terms of digital marketing 20% of customers are vital and 80% of customers are trivial that view products on-line. This is a mathematical formula created by an Italian economist Vilfredo Pareto.

vilfredo-pareto-1848-1923

In order for a company to maximise its marketing strategy they need to discover who their main 20% of consumers are and begin to prioritize for these customers. These 20% are the most important as they do produce 80% of your results. The customers who become long-term users, who gain the most from the services and fit well demographically and socially with the business model, are key.

pareto-80-20-principle

There is clear evidence which back this principle up and that can provide a company with increased profits and customer satisfaction. The one criticism this idea could cause is the lack of new customers. If a company decides to put all their attention to existing customers they are not widening their parameters for new consumers which could lead to the number of profits gained decreasing. This principle states that digital marketing needs to prioritise the existing customers but also remember to attract new customers.

References;

What Is The 80/20 Rule And Why It Will Change Your Life . 2015. What Is The 80/20 Rule And Why It Will Change Your Life . [ONLINE] Available at:http://www.entrepreneurs-journey.com/397/80-20-rule-pareto-principle/. [Accessed 23 March 2015].

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s