How well do you follow the 80/20 Rule?

[abostonboy]

There is a rule called the 80/20 rule in business. Known as the Pareto principle it basically states that you make 80% of your income from 20% of your sales. Looking at affiliate sales, it's about right. Take a bank - probably 80% of the money in a bank is from 20% of the investors.

A more formal definition, "The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that, for many events, 80% of the effects comes from 20% of the causes."

So, how much does it apply to you? Do 20% of your tgps make 80% of your sales. Do 20% of your sponsors make 80% of your income?

If so, what are you doing about it? Are you working that 80% that makes 20% and try to "bump" it to a higher %?

Or do you just not see it as a valid rule?

[RottenRay]

So, how much does it apply to you? Do 20% of your tgps make 80% of your sales. Do 20% of your sponsors make 80% of your income?

If so, what are you doing about it? Are you working that 80% that makes 20% and try to "bump" it to a higher %?


Yes, I do pay attention to this - I track statistics by site and joins.

No, I don't necessarily try to "bump" the 80% that simply uses bandwidth, except for making sure that ALL of it has a plethora of links.

I do work harder at the 20% - I try to "re - present" models or episodes that score, and try to send more traffic to programs that convert instead of trying to "reach the gate" with programs that don't.


Pareto gets a bit squishy when applied to the complex biz of promoting porn sites, for a number of reasons...

Tour pages change - a sexy hot seller one week is often replaced by a "not so" the following week.

General "bent" is involved. For example, when K-Fed makes headlines, tour pages with someone who looks a bit like K-Fed might close more sales.

An especially hot model who appears simultaneously on several sites is almost a no-sale - seen too many places at once.


An interesting note:

Read "Paradox of Choice" by Barry Schwartz. I feel there is a strong tie between consumers being inundated with a plethora of choices and Pareto.


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