80% of an organizations’ profit is generated by 20% of its consumers; this is the rule definition. Vilfredo Pareto, who was an Italian economist, introduced the rule in 1906. The article will analyze how the rule is applied.
Know The Best Consumers
An organization serves many customers daily. Some of them are frequent buyers. Some organizations offer various products and services. Identify the regular customers, those that purchased recently, and the generous buyers. Please treat them with the utmost respect and make them top priority. Analyze their data and use the information to attract and find new consumers.
Know the Consumer’s Location
After making a sale, ask a consumer to fill a form on customer service. Use this to the business’ advantage by getting their details, and work on their feedback. Analyze who the best consumers are, and from the forms, establish their location. At times, most of the consumers are from a particular region or location. Investigate why that area is more productive than the other regions. Increase sales and marketing strategies in the productive areas.
Consumers have different behavior attributes. Keep track of consumers’ buying habits, preferences, tastes, and compare them to the other irregular consumers. Analyze the difference and turn it into an opportunity. Take advantage of buying patterns and market more to these consumers. Look for new clients with similar traits and turn them into regular clients. Find out which products are sold more, and concentrate on them. Disregard any product/service that isn’t generating any revenue.
Some consumers are hard to deal with as they have irrelevant terms of conducting a business deal. But because they are the clientele, business owners have to deal with them. Pay attention to their buying habits, and if they are part of the 20%, set certain boundaries with them. Businesses have to offer excellent customer service regardless of who the client is. After all, the difficult consumer may give the most business.
Make Regular Consumers Happy
Some clients always support a business and are most valued. Therefore, don’t take them for granted. A business owner should not forget his most valued consumers even when looking for new ones or dealing with the difficult ones. Stay in touch with high-volume consumers and provide excellent consumer service. Interact with them, and figure out how to keep them in business.
Using the 80/20 rule doesn’t mean that a business should only focus on the 20%. Treat all consumers fairly but also take care of the 20%. Companies should focus on what is important and try and make every customer valuable. For those that sell multiple products, concentrate on what generates the most revenue. Don’t waste time on other products; it’s time-consuming.