# Marketing Fundamentals – Two Numbers To Live By

by on May 27, 2012

Perhaps the most important of all marketing fundamentals is the Pareto Principle, and you should love the eponymous little Italian who first observed it and thank him nightly as you drift off to sleep snuggled up next to your teddy-bear.

Why?

Because the Pareto Principle, also known as “the 80/20 Rule” and “The Law of the Vital Few” encapsulates THE two most important numbers in this or any other universe: 80 and 20.

It essentially sums up a general principle that in any system a majority of the outputs are a function of a minority of inputs, with the split often being 80/20 (meaning 80% of the outputs come from just 20% of the inputs).

## It is perhaps of the most powerful of ALL marketing fundamentals

• 80% of your sales come from just 20% of your  marketing.
• 80% of your profits come from just 20% of  your products or services.
• 80% of your problems come from just 20% of  your customers or clients.
• 20% of your clients or customers are responsible for 80% of your profits.
•  … and we could go on and on.

Now the numbers might not be exactly 80/20 (they might be 60/40 or 70/30 or even 99/1) but they ARE there.

For example, looking at my wife’s blog and the statistics for the past month:

• People have found the site with a total of 5828 keywords and keyphrases.
• The TOP keyword is responsible for 1017 of those visits (8.1%)
• The top 10 keywords are responsible for 3035 of those visits (24.2%). At this point we’d say it’s a “24.2/0.172 rule”, meaning about a quarter of the traffic comes from under two-tenths of one percent of the keywords!
• What’s more, the TOP keyword gets more than 15 times as many hits as the 10th one.
• If we look at all 5828 keywords we find the first 1166 – 20% – pull in… ta daa… 79.99% of the traffic (and I promise I didn’t know what the exact numbers were until I just bashed them out on the calculator as I was writing this).

## So, what’s the easiest and best thing I can do?

1. Increase traffic to the most popular keyword? Or…
2. See if I can somehow increase the traffic to the others by a factor of 10 or 15 or more and get them up to scratch?

Now, a few things can happen to skew the stats here, which is why I want you to understand this is a “mature” blog well established in its niche with a good penetration of the general keyword theme.

Obviously if it was a brand new blog ranking highly for “French Military Footwear from the 18th Century” the numbers would be small and the stats probably meaningless.

But these numbers are statistically meaningful: in that time the blog got 12,526 visits from the search engines alone.

I can rely on these numbers to predict the future with a great deal of confidence.

Sarah’s blog is not unique or different from your website in this respect. If you use Google Analytics or something similar and you actually take 30 minutes every morning to LOOK at the wealth of information it makes available, you’ll start to see these kinds of numbers, too.

And when you know where your strong points are, you can start pushing and prodding in the right places.

BONUS: don’t make the mistake of thinking because this is a blog or a website and your business is offline it doesn’t apply to you: it DOES.

Even if you’ve got people coming in off the street, or you get all your business through referrals (like I do) or you have an ad in the local rag that’s actually working, you’re going to find 80% of your business comes from 20% of the sources.

And while it’s worth looking at the underperforming areas just to see if there’s something obvious you’re not doing (or are but shouldn’t be) in the main it’s better to play to your strengths not your weaknesses.