What is the 80/20 Rule & Why Intelligent People Use It


During my high school years, staying focused was something I hadn’t quite developed yet. I was the master at using my time inefficiently. Now I’m not saying I was lazy, I was always trying to do my best. It’s just assignments-memethat my time wasn’t used at its best. I don’t know how many hours I wasted as a teenager trying to get assignments completed while wasting my time focusing on the wrong things or going in the wrong direction. I would sit there, reading books, talking to teachers, sitting by the computer at home trying to find that right piece of information to give me that edge I was looking for.

While trying to do this, the whole time I would have my father’s voice in my head saying “Work smart, not hard”. As much as I tried to ‘work smart’ it just never seemed like I was working smart but rather I was taking the hard road. That was until I learnt about the book The 80/20 Principle: The Secret to Achieving More with less by Richard Koch.

Then Boom!

As I began reading the first few chapters that evening, I realised that the saying work smart, not hard can be directly attributed to this particular principle. But ever since finishing the book, I have been able to use the principle to seriously boost my efficiency.

If you are a newbie to the 80/20 Principle, that’s fine because as my Father also use to say “It’s never too late to make things right!”.

So the 80/20 principle (or Pareto principle as it is also referred to) was developed by the Italian economist Vilfredo Pareto in 1896. It was based on him concluding that 80% of the land in Italy was owned by 20% of the population. Since then, this principle has been found to apply as a simple formula for most areas of complex causes and effects, e.g. in science, economics, software & even sports.

However, what we are going to focus on is how this principle can be applied to your business and sales approach. So before we get started, here is how Richard Koch defined the 80/20 principle, he explained that the rule of 80/20 is “that a minority of causes, inputs or effort usually lead to a majority of the results, outputs or rewards”.


When taken literally, this means that, for example, 80% of what you achieve in your job comes from 20% of the time spent. Or that 80% of your profits may come from 20% of your products or 20% of your customers. While this rule might be based around statistics and come from the research of an economist, you don’t need to be an economist or an amazing statistician to be able to use this basic principle.

So, how does the 80/20 principle help?

Well, when you begin to apply this rule to yourself or your business, your eyes, may start to open. Your time is the most valuable resource you have, but how often do you find yourself doing tasks that don’t provide much value? Doing dishes, cleaning the house, or organising small menial tasks. If we reverse the rule, these tasks provide 20% of the output but take up 80% of your time. Let’s change that.
Hire someone to clean your house, hire a personal assistant to manage your schedule. While it may seem like it may be expensive to hire someone to complete this work, think how much it is costing you to complete those tasks yourself? You could spend that time more efficiently on billable time, or learning something new so that you can demand a pay rise. Begin thinking about having these activities being completed by outside parties, so that you can spend more time doing the tasks that help you provide your maximum output.

Now think about where 80% of your results have come from in the past, this could relate to anything relevant to your business, your own work output, your organisations profits. Once you start to apply this rule to yourself you can begin to unravel the power of using this knowledge. For example, if you’re a sales manager, you may realise that 80% of your teams sales comes from only 20% of your sales team. Now with this knowledge, you can begin to reward your team accordingly, rewarding only that 20%. Doing this may even increase their output, because you have now rewarded the sellers that are producing the majority of the results.

Use the 80/20 principle to fill your pockets!

Now that you are enlightened with the knowledge of understanding where the majority of the outputs come from, don’t let it go to waste. We have been using the 80/20 principle here in our office for quite some time, in particular when it comes to one of our most popular services, Rent-A-Marketer. Our Rent-A-Marketer service is all about providing the most valuable result at the lowest cost, exactly how Vilfredo Pareto would have wanted. We help our clients use our marketing automation system to maximise the number of leads they can generate. The service has proven to provide at least 80% of the results that a full-time marketing employee would provide at only 20% of the cost.

I’m going to finish off with another quote my Father used to say (he always had a quote or saying ready to go):


Leave a Reply

Your email address will not be published. Required fields are marked *