Table of contents
Definition of pareto’s law
Pareto’s Law, also known as the 80/20 rule or the Pareto Principle, states that roughly 80% of effects come from 20% of causes. For marketers, that usually means around 80% of revenue or results comes from about 20% of customers, products, or channels — so the fastest way to improve performance is to find that 20% and focus on it.
An example of pareto’s law
Here is an example of how it works:
Growth Method, a SaaS company, analyzed their customer base and found that 80% of their revenue came from just 20% of their clients. These top clients were primarily large enterprises that required more advanced features and dedicated support. On the other hand, the remaining 80% of clients, mostly small businesses, contributed only 20% of the total revenue. This distribution of revenue aligns with Pareto’s Law, demonstrating the 80/20 principle in action.
How does pareto’s law work?
Pareto’s Law works by helping marketers identify the most significant factors that contribute to their success. Also known as the 80/20 rule, it states that 80% of the results come from 20% of the efforts. In marketing, this means that a small percentage of customers, products, or marketing channels are responsible for the majority of the revenue and growth. By focusing on these high-performing elements, marketers can optimize their strategies, allocate resources more efficiently, and ultimately achieve better results with less effort — the same underlying goal as tracking a single North Star Metric rather than spreading attention across dozens of vanity numbers.
Pareto’s Law vs other prioritisation frameworks
Pareto’s Law is often confused with prioritisation frameworks like ICE or RICE, but they solve different problems. Pareto’s Law is a retrospective observation about where value already sits; prioritisation frameworks are prospective tools for scoring which new ideas to work on next. The table below shows how Pareto’s Law compares to the frameworks and models it’s most often mentioned alongside.
| Framework | What it measures | Time horizon | Best use |
|---|---|---|---|
| Pareto’s Law (80/20) | Concentration of value among causes or customers | Historical / retrospective | Focus resource on the highest-value 20% of customers, channels, or products |
| ICE | Impact, Confidence, Ease of an idea | Per experiment or sprint | Fast, general-purpose prioritisation of an experiment backlog |
| RICE | Reach, Impact, Confidence, Effort | Per quarter or roadmap cycle | Comparing ideas that reach very different audience sizes |
| 70-20-10 Rule | Budget or resource split across proven, emerging, and experimental work | Ongoing / cyclical | Allocating a marketing budget or innovation resource across risk levels |
| 95:5 Rule | Share of your audience actively in-market to buy right now | Ongoing / cyclical | Balancing brand-building with lead generation |
Pareto’s Law pairs particularly well with Parkinson’s Law: once you know which 20% of work actually drives 80% of your results, tightening the deadline on that work (rather than letting it expand to fill whatever time is available) compounds the efficiency gain.
Expert opinions and perspectives
Here are how some of the world’s best marketing and growth professionals think about pareto’s law.
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“Pareto’s Principle, or the 80/20 rule, is a powerful concept that can be applied to many aspects of business, especially marketing. By focusing on the 20% of customers who generate 80% of your revenue, you can maximize your marketing efforts and increase your profits.” - Philip Kotler
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“The Pareto Principle is a reminder that not all customers are created equal. In marketing, it’s essential to identify and prioritize the 20% of your customers who are responsible for 80% of your sales, and then tailor your marketing strategies to meet their needs and preferences.” - Seth Godin
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“Pareto’s Law teaches us that in marketing, it’s not about trying to please everyone, but rather focusing on the key 20% of your audience that drives 80% of your results. By understanding and catering to this core group, you can achieve greater success and efficiency in your marketing efforts.” - Gary Vaynerchuk
Questions to ask yourself
As a modern growth marketing or agile marketing professional, ask yourself the following questions with regard to pareto’s law:
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How can I identify the 20% of marketing efforts that are generating 80% of the results and focus on them?
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Which 20% of my customer base is responsible for 80% of my revenue, and how can I better serve and retain them?
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What are the top 20% of marketing channels that drive 80% of my traffic and conversions, and how can I optimise them?
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Which 20% of my marketing tasks are the most critical and high-impact, and how can I prioritize them effectively?
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How can I eliminate or delegate the 80% of low-impact marketing activities to free up more time for high-impact tasks?
See how this topic is trending on Google Trends here: https://trends.google.com/trends/explore?date=all&q=pareto%27s%20law
About Growth Method
Growth Method is the agentic marketing platform for B2B teams: plan your strategy, ship campaigns, and learn what works, all in one place, for people and agents. Pareto’s Law is a good reminder of why that discipline matters — most campaign ideas won’t move the needle, so the real advantage comes from finding the 20% that will and giving them proper focus, instead of spreading a team thin across everything on the backlog.
That’s the loop Growth Method is built around: hypothesise, plan, launch, and analyse campaigns against your own goals and first-party data, so the high-impact 20% surfaces from evidence rather than guesswork, and your next campaign is chosen because it’s likely to work, not because it’s next in the queue.
Get started to see it in action.
Frequently asked questions
What is Pareto’s Law?
Pareto’s Law, also known as the 80/20 rule, is the observation that roughly 80% of effects come from 20% of causes. In marketing, this typically means 80% of revenue comes from around 20% of customers, products, or channels.
Who coined Pareto’s Law?
The underlying observation comes from Italian economist Vilfredo Pareto, who noted in 1896 that roughly 80% of land in Italy was owned by 20% of the population. Management consultant Joseph Juran later popularised it as a general principle and gave it the name “Pareto’s Law” or “Pareto Principle”.
How do you apply the 80/20 rule in marketing?
Identify which 20% of your customers, products, or channels generate roughly 80% of your revenue or results, then allocate more budget, attention, and resources to that high-value segment rather than spreading effort evenly across everything.
Is Pareto’s Law always exactly 80/20?
No. The 80/20 split is a rule of thumb, not a fixed law of nature — the real ratio in any given business might be closer to 70/30 or 90/10. The core idea that a minority of causes drive a majority of results is what matters, not the precise numbers.
What is the difference between Pareto’s Law and the ICE or RICE framework?
Pareto’s Law is a retrospective observation about where value is concentrated among existing customers, products, or channels. ICE and RICE are prospective scoring frameworks used to prioritise which new ideas or experiments to work on next. They solve different problems and work well together.
How does Pareto’s Law relate to the 70-20-10 rule?
Pareto’s Law describes where value already sits (80% of results from 20% of causes). The 70-20-10 rule is a forward-looking resource allocation model, splitting budget or time across proven, emerging, and experimental work. Teams often use Pareto’s Law to identify their proven core, then apply 70-20-10 to decide how much further budget that core deserves.