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Pareto Principle and the Way It Improves Your Productivity

Do you ever wish that you have more hours in a day?

If so, you aren’t the only one that feels this way.

In fact, people often feel that they aren’t productive enough.

So, they resort to trying to cut down on mundane tasks.

However, it becomes frustrating when people don’t know how to do it right.

Furthermore, people often develop habits unconciously.

This can grow into habits that are difficult to get out of.

More often than not, improving productivity is easier said than done.

Hence, this is where the Pareto Principle can be very useful.

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So, What Is the Pareto Principle?

If you’ve never heard of Pareto Principle, it has another common name.

Instead, you may have heard of its alternate name which is the 80/20 rule.

Vilfredo Federico Damaso ParetoBasically, it states that 80% of your results can be attributed to 20% of your efforts.

The term Pareto Principle was originally coined by an Italian economist.

His name is Vilfredo Federico Damaso Pareto.

One day, Pareto noticed something odd when he was looking at his pea plants.

Only 20% of his plants generated 80% of the healthy pea pods.

His observation led him to discover something more important.

In Italy, 20% of the population owns 80% of the country’s land.

In fact, Pareto’s simple observation led to the creation of an important ratio.

Now, let’s explore more about this principle.

An Overview of the Pareto Principle

Pareto Principle

Looking at the numbers, 80% of your outcomes are the result of 20% of your inputs.

In other words, your outcome does not always equal to your input.

However, people who use this principle must keep in mind that the numbers do not matter.

It doesn’t matter what numbers you apply.

The 80/20 figure is simply a rough metric.

This essence of this principle is there are a select few things you do that accounts for the majority of your productivity.

Examples of the Pareto Principle

Here are a few common examples of the Pareto Principle.

  • 20% of the peas planted resulted in 80% of healthy pea pods
  • 20% of the world’s richest owns 80% of the wealth
  • 20% of employees are responsible for 80% of sick days
  • 20% of your clothes consist of 80% that you mainly use
  • 20% of customers generate 80% of the business revenue
  • 20% of your products create 80% of quality issues

Based on these examples, there are unlimited scenarios that we can apply the Pareto Principle.

Moreover, it can be applied in your personal or working life.

In fact, the Pareto Principle may have been manifesting in your life without you realizing it.

So, you will find this ratio applicable to many areas.

How Can the Pareto Principle Help Improve Your Productivity?

When trying to improve your productivity, here are some questions that you can ask yourself.

  • Which tasks are producing the most results for me?
  • Are the tasks I’m doing aligned with my goals?
  • Which tasks are not producing any results?
  • Which tasks can be automated?

Now that you have the answers to these questions, you can apply the Pareto Principle.

However, you shouldn’t immediately cut down your workload to 20%.

The Pareto Principle does not work effectively if you do it this way.

Instead, the Pareto Principle requires you to consider how you use your time carefully.

So, it is important that you identify what you spend your time on.

In this article, you will learn how to keep track of your productivity level.

Essentially, the message that the Pareto Principle wants to convey is you should focus on things that matter.

By doing this, you can greatly improve your productivity.

Additionally, you can keep your stress level in check.

More importantly, Pareto Principle highlights the importance of delegating tasks.

To do this, identify which the vital and trivial tasks.

In fact, vital tasks usually do not involve multitasking.

This is because it requires intense concentration.

Examples of vital tasks are brainstorming ideas for content, creating e-books or courses.

Meanwhile, the trivial tasks you spend on are usually easier than the vital tasks.

These tasks usually repetitive and requires a certain routine.

Consider outsourcing these trivial asks to a virtual assistant.

In fact, you would be surprised by how much time these mundane tasks take up.

By doing this, you can focus on the things that matter in your personal and work life.

It makes a huge difference.

Let&8217;s get into detail on how you can apply the Pareto Principle in different areas of your life.

Five Areas to Apply the Pareto Principle

There are different areas that you can apply the Pareto Principle.

In this article, we are going to focus on six areas that you will find the Pareto Principle useful.

  1. Personal productivity
  2. Job search
  3. Customer service
  4. Sales
  5. Marketing

Let’s get into detail on how the Pareto Principle can work in each of these areas.

1. Personal Productivity

In your personal life, there are multiple ways that you can apply the Pareto Principle.

Here are several main areas that you can work on using the Pareto Principle.

2· Food

If you’re trying to turn over a new leaf in your health with the new year, now is a good time to start.

One of the easiest ways to begin is by tracking your eating habits for a week.

By doing this, you can identify your eating pattern.

You would be surprised because many people find that they consume food that contributes little to no nutritional value daily.

3· Personal Relationships

Take a look at your social circle.

Over time, it’s easy to overlook how much effort you put into a relationship.

Hence, people often fail to assess the effectiveness of a relationship.

To use the Pareto Principle, simply assess the time and energy you spend in a relationship.

Then, compare this to the amount of satisfaction you receive.

From this, you can identify which relationships are valuable to you.

By doing this mental assessment, you can effectively eliminate toxic relationships.

Therefore, invest more time in valuable relationships and spend less time with toxic people.

4· Habits

Your productivity is highly relies on the little things that you choose to do every day.

Therefore, the habits you develop over time can affect your level of productivity.

Using the Pareto Principle, you need to identify your good and bad habits.

Be honest with yourself.

Figure out which habits bring positive results in your life and vice versa.

By listing them down, you can decide how to eliminate the bad habits.

Additionally, it can also be a good basis for you to create more good habits.

5. Job search

If anything, job searching can be a daunting task.

In fact, it includes a lot of researching and networking.

So, how can you prioritize them?

Based on the Pareto Principle, the best approach is for you to focus on what is most important.

In this context, you shouldn’t apply to every job advertisements you see.

Instead, identify the job requirements.

Then, ask yourself what are the returns you will receive?

Beyond just financial rewards, you have to consider other factors that lead to work satisfaction.

This can include a healthy working environment and opportunities for promotion.

If you are new to working, it will take some time for you to identify what works best for you.

Think about the returns you think are proportionate to your work.

Remember to do an industry survey of what is commonly offered too.

When researching for employers, don’t waste your time.

Identify which regions you want to work in.

Then, narrow your search to employers within those areas.

Additionally, don’t make the mistake of applying for every job that fits your disciplinary background.

Instead, take some time to read the job criteria.

Only apply for jobs that you believe you can provide value.

Some job applications will require you to have industrial experience.

Taking into account the Pareto Principle, just send in your application.

If you are confident of your skills, this can work out well for you.

In fact, this is the 20% that can make up 80% of your success.

Lastly, don’t underestimate the power of making personal connections.

Try to use at least 20% of your time to identify networking contacts that are beneficial for your job search.

5. Customer service

The power of customer service is often undervalued by businesses today.

In an Internet-enabled world, businesses have a lot to lose due to negative feedback.

By nature, negative experiences are easier to remember than positive ones.

The presence of social media, review sites and online forums make it important for businesses to be accountable for their operations.

Therefore, you can also utilize the Pareto Principle here.

If you work in the customer service department, look for the 80/20 distribution.

Are 20% of your offerings the reason for 80% of your complaints?

If this is the case, you must quickly identify which offerings are most problematic.

Focus on identifying the root problems with these offerings.

Then, take corrective actions.

Are 80% of your customer complaints coming from 20% of your customers?

In fact, there are instances where 20% of customers call more often than the other 80%.

For this group, your goal must be to understand the purpose of their calls.

If you find that the questions are repetitive, update your website’s frequently asked questions page.

Furthermore, you can suggest designing the customer support page to redirect to other alternative methods to obtain answers.

For example, encourage customers  to send in emails to the customer support department before calling.

Remember to state how many days it would take for the customer support to get back to them so they know when to expect an answer.

The key to effectively applying Pareto Principle in customer service is by tracking poor reviews and negative feedback.

Therefore, invest in tracking and monitoring tools that will help you gather this information.

By using the data collected, it is easier to identify which parts of your offerings are problematic.

Hence, this will provide you with actionable data so you can resolve the issue.

6. Sales

Ultimately, businesses have the same goal.

All of them want to make a profit.

The success of a business is highly dependent on the number of sales.

However, this task may be easier for larger companies.

This is because they have more resources at their disposal.

On the other hand, freelancers or small business owners will find making sales a lot harder.

Again, this is where the Pareto Principle comes in.

To effectively utilize the Pareto Principle, you must have some actionable data in hand.

As a business owner, you need to track important metrics to boost your growth.

Without actionable data, you can&8217;t identify which area to improve.

If you want to grow your business, statistics must be your best friend.

There are plenty of tools on the Internet that can help you to do so.

In fact, platforms such as Shopify and WooCommerce offer paid data tracking tools for business owners.

Applying the Pareto Principle, you must look for a correlation between the effort you put in your business and the sales you make.

This is where the actionable data you collected come in handy.

By identifying what led to the sale, you can strategize your marketing strategies better.

As e-commerce businesses often engage in multiple advertising strategies, having tracking tools will help identify which ones are most effective.

Granted, it will take some time for you to collect the data.

However, this is vital as it identifies what makes the most money for you.

With this data, you can invest more money in advertising strategies that are proven to bring in more sales.

In the Pareto Principle context, you can effectively enhance 20% of your best revenue-making strategies.

Therefore, you can streamline or eliminate the remaining 80% of your efforts.

7. Marketing

If you’re in the marketing department, there is a high probability that you wear many hats.

Hence, this makes it difficult for you to prioritize what matters the most in your marketing efforts.

Let’s start out by discussing about effective marketing channels.

There are countless of marketing channels that businesses can use out there.

Today, most businesses focus on 5 to 10 of these marketing channels.

By applying the Pareto Principle, we can say that 20% of your marketing channels contribute to 80% of the business revenue.

Where do most of your leads come from?

Focus on the channels that produce the most revenue for you.

Most importantly, the Pareto Principle states that 80% of your revenue comes from 20% of your customers.

So, you must invest more in retaining the customers from the 20% group.

Additionally, you must find more customers like them.

For example, you can identify from which marketing channels these customers originated from.

Furthermore, research the demographic and psychographic of the group.

Once you obtain all of the data, you can target them better.

Additionally, the Pareto Principle states that you should stop spending time on customers that spend very little.

Instead, you should focus your efforts on your best customers.

Furthermore, the Pareto Principle also states that 20% of your products makes 80% of the sales.

Therefore, utilize your sales data to identify the best selling products.

These products should be responsible for about 80% of the sales.

Once you have found the products, advertise and push them to your target customers.

Make the most out of your best sellers.

As you already know they are proven to sell, you will have a higher effort to reward ratio.

The Pareto Principle Is Not a Magic Trick

Indeed, the Pareto Principle has led to many astounding discoveries.

One can even say that these discoveries have significantly improved the way we live our lives.

As more people are trying to implement it in different areas of their life, one thing to keep in mind is that the Pareto Principle is not a magic trick.

Ultimately, it is a trend.

This means that it happens regularly.

More importantly, some businesses have been taking Pareto Principle too literally.

Regardless of where you want to apply the Pareto Principle, always use actionable data.

The best business decisions you will make will come from your analytics.

Don’t simply base your decisions on a principle.

Instead, back it up with actionable data.

Keep in mind that the Pareto Principle is not a one size fits all solution.

In your personal life, try and keep track of your habits over time.

Invest in good tracking tools that help you stay on top of vital data for your business.

By keeping track of vital data, you can assess your productivity level better.

While the Pareto Principle is good to guide your strategies, it should not determine your every move.

Remember that the path to success isn’t just through one road.

By adding your personal touch on the Pareto Principle, it can potentially change your personal and work life.

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