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Definition
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.[1]
This phenomenon is observed across multiple disciplines and suggests a focus on the percentage that produces the majority of output.
References
- ^ American Marketing Association, AMA Dictionary.