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Why it’s time to throw out the 80-20 rule

November 16, 2009 | Internet Marketing

The Pareto principle doesn't cut it any more in an age where above- and below-the-line communications have blurred into an infinite number of digital consumer channels. Dive deep into those one-to-one approaches, such as social media, mobile marketing, and proximity marketing, to optimize brand and business building.

Every time you look up (from your mobile device), another new way to reach consumers and a new digital mechanism to drive brand messages seems to emerge. But with more than 307 million people in the U.S., and nearly 74 percent of them using the internet, how are we supposed to find success using the Pareto principle and target the 20 percent of consumers who drive 80 percent of the revenue?

Well, you can, but that’s not being smarter, faster, or more efficient. In fact, that’s traditional advertising. In my world, you achieve results by discovering one-fifth of those people, or 4 percent of your most influential consumers, and targeting them.

This significant digit—what I like to call the 4-percent factor—is a strategic targeting principle that forces you to drill deeper into your influencer base to discover the most significant consumers who have the greatest impact on your brand and then speak to them. Through the use of information already available via customer databases, profiling and enhancement data, real-time research, and predictive modeling, it is easier than ever to find those customers who can take your business to the next level. The information is voluminous, and so are the results when you use it to your advantage.

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