# 80 20 Rule

> Discover the 80/20 Rule: Understand its definition and value, and learn how to apply this powerful principle to boost efficiency and results.

*Canonical: https://derrick-app.com/glossary/80-20-rule*

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80/20 Rule: The 80/20 Rule, also known as the Pareto Principle, asserts that approximately 80% of outcomes or effects come from 20% of causes or inputs.In digital marketing and sales automation, the 80/20 Rule helps businesses focus their efforts on the most productive areas. For example, a company might find that 80% of its revenue comes from 20% of its customers. By identifying and concentrating on these high-value customers, businesses can optimize their sales strategies and marketing campaigns for greater efficiency and effectiveness. Similarly, in data enrichment, the rule can guide which data attributes contribute most significantly to the desired outcomes, allowing teams to prioritize efforts that yield the highest returns. Understanding and applying the 80/20 Rule is crucial as it enables organizations to allocate resources, time, and energy more strategically, ultimately driving better results and increasing overall productivity.

## Example

Imagine a B2B software company analyzing their customer data discovers that 80% of their annual recurring revenue comes from just 20% of their enterprise clients. Armed with this insight, they restructure their sales team to create a dedicated enterprise account management division focused solely on these high-value customers. They implement personalized outreach campaigns with targeted content addressing these clients' specific pain points, set up quarterly business reviews, and develop customized product features based on their feedback. Meanwhile, they automate parts of their sales process for smaller accounts using digital marketing tools. Within six months, customer retention rates for their top 20% improve by 15%, and average contract values increase by 22%-all while reducing the overall sales team workload through strategic application of the 80/20 Rule.

## Related definitions

- [A B Testing](https://derrick-app.com/glossary/a-b-testing)
- [Abm Orchestration](https://derrick-app.com/glossary/abm-orchestration)
- [Account](https://derrick-app.com/glossary/account)
- [Account Based Advertising](https://derrick-app.com/glossary/account-based-advertising)
- [Account Based Analytics](https://derrick-app.com/glossary/account-based-analytics)
- [Zero Based Budgeting](https://derrick-app.com/glossary/zero-based-budgeting)
- [Account Based Marketing](https://derrick-app.com/glossary/account-based-marketing)