Traditional Marketing is Broken . . . Understanding Pareto’s 80/20 Law

by Stan Phelps on November 14, 2009 · 0 comments

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I just uploaded a new presentation to Slideshare.  Here is a synopsis of the presentation:

  • It talks about how traditional marketing is broken and the need to flip it on its head.
  • It discusses Pareto’s 80/20 law and how it applies to traditional marketing.
  • I put forth the Phelps 80/20 corollary on traditional marketing.
  • It examines the flaw of focusing the majority of your marketing efforts on the purchase funnel.
  • It discusses the poor ROI from traditional marketing and the revolving door effect.
  • It introduces the idea of flipping traditional marketing by focusing on your current customers.
  • It talks about the three benefits of putting your customers first: reduce attrition, increase satisfaction and loyalty.
  • I define the concept of marketing lagniappe as the means to provide added value.
  • It shows the net effect: new customers become repeats, repeats customers become occassionals, occassional customers become frequents and frequent customers become evangelists.

Check it out.  I’d be interested to hear your thoughts on Pareto’s Law and the concept of flipping the funnel.

Marketing Lagniappe – “Pareto’s Principle – Flipping Traditional Marketing on its Head”
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