The Pareto Principle states that for many events, roughly 80% of the effects come from 20% of the causes. In business, this principle is often referred to as the 80/20 rule, and it suggests that 80% of a company’s sales come from 20% of its customers.

It can be applied to many other areas of business, such as marketing, where it suggests that 80% of a company’s sales come from 20% of its marketing efforts.

The Pareto Principle is a useful tool for identifying areas where we can get the most return on investment. For example, if we want to increase sales, we should focus on the 20% of customers who generate 80% of sales.