The Pareto principle, also known as the 80/20 rule in marketing, highlights the phenomenon whereby a small proportion of customers generates the majority of revenue for most businesses. Specifically, according to this principle, approximately 80% of revenue comes from just 20% of customers. This observation, initially emphasized by Pareto to describe the unequal distribution of wealth within the population, has various applications in the business world.
It is important to note that the 80/20 rule is not always strictly applied, and its application can vary significantly depending on the industry. For example, it rarely applies in the TV subscription sector, to a limited extent in the mobile phone sector, and less so in the retail sector. In some areas, it might even be translated into a 90/10 rule.
Mentioning the principle of the Pareto rule primarily highlights the importance of prioritizing an approach focused on the most valuable customers within the framework of a customer loyalty strategy.