Now that you’ve discussed, how to use the 80/20 principle to narrow your product range and increase profitability, let’s explore its versatility in various aspects of business. The 80/20 principle is incredibly adaptable and can be applied to almost every area of business to enhance the chances of success. Take negotiations, for example, a crucial aspect of business dealings. In negotiations with customers, suppliers, or partners, an 80/20 analysis may reveal that only a few points truly matter. Instead of trying to win every point, focus on those that are most significant for your company.

Another application of the 80/20 principle is in targeting your marketing efforts. If a small percentage of your customers generate the majority of your business, concentrate on identifying and retaining them. Ensure their loyalty through exceptional customer service. When developing new products or services, direct your efforts toward this vital customer segment. This approach allows you to expand your market share while continuing to serve these valuable customers.

Consider Nicholas Barsan, a top real estate broker in the United States, earning over $1 million in personal commissions yearly. He derives a significant portion of this income from repeat customers who resell their houses. Clearly, his focus on keeping his best clients satisfied is a profitable strategy. By now, it should be evident that the 80/20 principle has nearly universal applications in any business, making it a valuable tool for achieving success.