Category Archives: 5. Profitability and ROI

Blog articles in this category include everything touching on the topics of returns on investment and profitability.

Pareto’s 80-20 Rule & Profitability

80% of Profits may come from 20% of Customers, but sometimes 80% of Losses come from a Different 20%.

(Copyright PR Loyalty Solutions, 2011)

Vilfredo Pareto was an Italian economist who observed that 20% of the Italian population in the early 1900’s owned 80% of the land.  From this developed what today is called the Pareto Principle or the “80-20 Rule”, where frequently about 80% of a result is accounted for by 20% of some factor.

Today, it is a commonly accepted belief that about 80% of sales for a typical business come from 20% of its customers.  Continue reading