80/20 Rule

November 11th, 2008

Not many rules I follow.

However 80/20 rules is one that I pay attention to.

The argument is 20% of causes lead to 80% of consequences.

(Note: its not strictly 80/20 it can be 90/10)

Examples are:

  • 20% of streets cause 80% of traffic jams
  • 20% of your clients derive 80% of your profits
  • 20% of faults make up 80% of your replacement costs

Smart thinking.

I always throw this around every few months, see what else I’m doing wrong, or where improvements can be made.

Some examples i’ve found:

  • 20% of our Marketing Exp lead to 80% of our revenue.
  • 10% of my calls derive 90% of my mobile bill
  • 20% of my clients derive roughly 85% of my revenue (fluctuates a little bit)
  • 13% of our content drove 95% of our traffic

Once you’ve identified a link, what can you do to improve that 20%? How can you look after your clients that drive 80% of our profit? Can you modify your call behaviour to lower the 10% that make up 90% of your bill?

Give it a shot, it’s not only fun, it’s quite interesting to see the results.

Have you already done it? share your results I’m always intrigued…

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