The Pareto Principle, or 80/20 Rule is not new. In 1941, Joseph Juran named it after Italian, Vilfredo Pareto, who’d observed that 80% of the country’s income went to 20% of the population.
In 1979, American Airlines identified that just 80,000 of their 25 MILLION travellers (3.2%) were generating 65% of their business! This revelation saved them millions on wasted advertising.
In fact, that revelation changed the face of marketing for airlines and many other industries with “frequent buyer” clubs.
Savvy businesses reap huge profits by focusing on their ‘A’ clients who spend the most. Hard to believe with this knowledge, the vast majority of businesses still don’t even segment their clients into A/B/Cs, let alone tailor communications to the ‘goldmine’ 20%.
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