You may have heard of the Pareto principle. It is named after Vilfredo Pareto, an Italian economist, who discovered something about the world around him: there was an 80/20 imbalance of inputs and outputs at work in just about every aspect of society. He first realized this when he discovered that 80 percent of the land in Italy was owned by 20 percent of the people. He then recognized that this radical imbalance applied to other areas of life too. For instance, in business, the 80/20 rule was found to be at work in these areas:

• 80 percent of the sales was produced by 20 percent of sales force
• 80 percent of business revenue was produced by 20 percent of its customers
• 80 percent of the customer service complaints came from 20 percent of the customers.

The Pareto principle – or the Law of the Vital Few, as it has been called - has been used by business bloggers, coaches and seminar speakers to spur businesses to focus on the 20 percent and ignore the 80. This has spilled over to marketing, where the imbalance between what you do to get someone’s attention and what you do to entice them to buy is often targeted by the disciples of the 80/20 rule. They would jettison the 80 percent of marketing that is warming a prospect up to your brand and jump right to the 20 percent that has to do with the sale. That may work if you are selling commodities where only the price really matters. However, if you are selling a product or a service that takes a bit more time to walk a customer through the sales process, there may be value in the 80 that is often unappreciated. It is like demanding that a mixture of eggs, flour, baking soda and sugar turn into a cake without baking it. There is marketing value in the 80 percent if you are marketing correctly.

The Pareto principle is the universal truth about the imbalance of inputs and outputs. But in marketing, can the 80 really be listed as an imbalance or is it the counterbalance of the 20? Let me explain. I like to break marketing into three phases: awareness, first time sales and retention marketing. One step leads to the other. It is impossible to get to first time sales without making potential customers aware of your brand, and likewise, it is impossible to retain great customers if you never sell them in the first place. Awareness marketing is the 80 percent. It defines your brand and pushes it into the marketplace so people understand it. It does not sell your brand. That is the next phase of marketing – first time sales. On the other extreme, retention marketing is dealing with the 20 percent – people who have become your customers, but need a reason to buy from you again. Retention marketing is all about creating a relationship between the brand and the customer. We want them to be customers for life and to recommend your brand to others. Here is the truth: you cannot get to the 20 percent of customers who are sold on your brand if you don’t go through the 80 percent who have to become aware of your brand in the first place.

But what about the 80 percent who never become the loyal customer? Why waste time with the 80 if they never get to where you want them to be? Here again, it is important to understand the way brands interact in the marketplace. There are brands I know about and think highly of, but would not buy. Why? I am not a buyer of what they sell…I am not really their target market. But I know people who are in their target market. In fact, my opinion of the brand – be it favorable or unfavorable – might influence someone else to buy or not buy from them. For instance, I had a friend who was doing some home improvement. They asked if I knew anyone I could recommend to do their work. I did. I do not need the same kind of work done on my house, so I am not a customer, but I know the good reputation of the company I recommended. Within the 80 percent are powerful influencers and you should not ignore them with your marketing efforts.

Is there a scenario when 80 percent of your marketing is ineffective? Yes, and here is how you know it is failing: when you are not moving anyone through the three phases. In other words, if all you do is put out content marketing, but never transition a prospect to make an appeal to buy, you are failing with the 80 percent. Throw that solution away and try another. When 80 percent is the counterbalance to the 20, you are moving prospects from one phase to the other. When it is not, it is the imbalance to the 20.

Vilfredo Pareto made a key discovery about the imbalance of life, but sometimes what seems to be an imbalance could work to your benefit. Be smart about your marketing: use the 80 to counterbalance the 20.