The Pareto rule in business runs according to Pareto’s principle. Vilfredo Pareto made some important contributions to economics; particularly in the study of income distribution, and the analysis of individual choice.

The principle states that 80% of outcomes can be attributed to 20% of causes. In business this means that you should focus on the 20% of activities which have the greatest influence on the outcome you desire. Knowing what these activities are is the first step towards using the Pareto rule in business.

If you can’t measure something you can’t improve it. But what do you measure in business? You must measure activity and how it relates to outcomes. In the affiliate marketing business this is done through tracking. Before you are able to track the actions which lead to online sales, you must first take some action. This might involve running adverts, creating content or generating leads in some other way.

Pareto Rule In Business & Affiliate Marketing

With affiliate marketing, a large portion of your activities can amount to nothing. As a beginner in affiliate marketing this can be a tough pill to swallow. But as you gain experience you’ll discover that some actions are leading to sales. Once you uncover those actions you are performing which lead to you making an online sale, you’re in a far better position to work on your business using Pareto’s principle.

Until you get to this point, you can often work for a long period of time and see nothing for your efforts. But don’t forget in these difficult times that once you have “cracked the code”, you can simply rinse and repeat. Previous efforts can work towards generating commissions over time. Affiliate marketing gets easier the longer you do it, knowing how to apply the 80/20 rule. At first it can be very time consuming and you get little for your efforts in tangible rewards. As you gain experience and knowledge, things get easier.

Pareto Principle Example

For business sales, 20% of a company’s customers are responsible for 80% of the sales. 20% of the employees are responsible for 80% of the results. For project management, many managers have noted the first 20% of the effort expended on a project yields 80% of the project’s results. Therefore, the 80-20 rule can help managers and business owners focus 80% of their time on the 20% of the business yielding the greatest results.

In affiliate marketing, you can spend a lot of time initially building content, blogging or uploading videos. If you track your sales, over time you’ll start to see where you sales are coming from and therefore be better able to spend your time accordingly.

In business, remember that 80% of your results comes from only 20% of your efforts. By focusing on the 20% which has the greatest effect on your business, and spending less time and energy on the 80% of efforts which are less effective, you can learn to be more efficient in generating a greater outcome.

Pareto Rule In Business – Summary

The 80-20 rule, also known as the Pareto Principle, asserts that 80% of outcomes result from 20% of the causes for any given event. In business, a goal of the 80-20 rule is to identify inputs that are potentially the most productive and make them the priority.

In affiliate marketing the same is true. An affiliate should endeavour to determine which actions are the most valuable to repeat on a consistent basis for the maximum possible benefit – to maximise sales.

Learn more about affiliate marketing with a free video series. Click on the image below for access.

See also affiliate marketing mindset for more on affiliate psychology.