I am frequently startled to find how often, when doing an analysis of a company’s sales figures, that they hold to the Pareto Principle (named after Vilfredo Pareto, a 19th. Century Italian sociologist, economist, and philosopher) which states that 80% of sales come from 20% of the customer base. I am also amazed at how many businesses acknowledge the fact that their sales reflect the Principle but they just accept that fact; few businesses use that information to advantage.

Knowing who those customers are that populate that top 20% can have a meaningful impact on your growth and profitability if you develop strategies and tactics that use that information:

· Create activities to strengthen the relationship so those important customers don’t defect to the competition. Examples of these activities could be “Customer Appreciation” events, personal visits if appropriate, lunch or breakfast meetings, special incentives or discounts to these special customers, special services such as free gift wrapping or expedited order fulfillment.

· If you can identify second-tier customers with potential for purchasing more from you, develop activities designed to maximize how often and / or how much they purchase such as limited-time offers given when they make a purchase to give that customer an incentive to return quickly. You can change their buying habits and elevate their customer status.

· If your current customers are buying as much from you as they can then your strategies should be centered on creating a larger customer base and focusing your marketing and advertising on the task of creating new customers with special offers or incentives for first-time buyers.

Knowing the impact of the Pareto Principle on your business is the first step towards developing a marketing plan and activities to increase your business based on your knowledge of your customers’ buying patterns. Knowledge is power. The more you know, the more you can tailor your events, sales, and offers to specific customers or specific segments of your customer base. Use what you know about your customer’s sales patterns and the 80 / 20 rule to increase key-customer satisfaction and your sales.

Larry Galler advises executives, professionals, and businesses to extraordinary achievement. Sign up for his free newsletter at http://www.larrygaller.com. Address questions and comments to larry@larrygaller.com