Definition
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The Eighty-Twenty Principle (also known as the 80/20 Rule or Pareto Principle) describes a situation in which a disproportionately small number (e.g., 20 percent) of salespeople, territories, products, or customers generate a disproportionately large amount (e.g., 80 percent) of a firm’s sales or profits.
This phenomenon is observed across multiple disciplines and suggests a focus on the percentage that produces the majority of output.
See Also
Sales prospecting methods
Sales targets
Sales territory
References
- American Marketing Association, AMA Dictionary.