You can apply the 80/20 principle to any aspect of your business, from negotiating to targeting marketing efforts.

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Now you know how you can apply the 80/20 principle to narrow your product range and increase profitability. But what about all the other areas of business?

Luckily, the 80/20 principle is so versatile that you can use it in virtually any area or function of business to increase the likelihood of success.

For example, negotiations are an important part of any business, whether it’s with customers, suppliers or partners.

Typically in a negotiation, the points to be discussed are often well prepared in advance, but there are far too many of them. An 80/20 analysis would probably reveal that only a few of the points actually really matter to your company, so you should focus on winning them rather than trying to argue for all points to go in your favor.

Another example of putting the 80/20 principle to use is in targeting your marketing efforts. If some 20 percent of your customers generate 80 percent of your business, you should concentrate on identifying them and convincing these customers to keep buying.

After you’ve identified the customers, ensure their loyalty by providing outrageously great customer service. Then, when you’re developing new products or services, solely target this 20 percent. This will allow you to increase your market share while selling to these same customers.

For example, consider Nicholas Barsan, one of the top real estate brokers in the United States, who earns over $1 million in personal commissions each year. Over a third of this amount comes from repeat customers who resell their houses, so clearly his focus on keeping his best clients happy is a profitable strategy.

It should be clear by now that the 80/20 principle has near-universal applications in any business.

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