The Pareto principle states that roughly 80% of results come from 20% effort.
The Minimal Viable Product or MVP is a good example of how the agile movement has applied the 80/20 rule. It works, at least as long as the missing 20% is not the equivalent of the last section of a bridge that would have got us to the other shore.
However, be careful when applying Pareto to a new service design. A service designed to make 80% of the customers happy with 20% effort runs a risk of ignoring a basic marketing maxim.
1 unhappy customer = 6 unhappy experiences
Many marketing studies prove that a customer with a bad service experience shares their experience with more people than a customer with a good experience.
Here’s an example. Let’s assume that we have five customers – four with a positive and one with a negative service experience. The four happy customers take the good service for granted, but the dissatisfied customer tells it to five friends. This means that one happy customer equals one positive experience and one unhappy customer equals six not-so-great experiences.
The calculation – more effort, more results
With our 20% effort we got 60% negative experiences! Following this 1:6 experience ratio, we could further calculate we need 97% to be happy customers to ensure 80% positive experiences.
If you want to give Pareto a positive user experience, remember this: put in more effort.
About the author
Menno Huijben is a Senior Executive at Sofigate and a concept owner of Business Technology Transformations and Data Leadership.
Menno is interested in the realm of decision-making in business, especially where a data-driven mindset meets intuition and experience. His motto is ”Don’t forget the Human Factor!”