GK
MARKETING MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Eighty percent of sales will come from 20% of customers.
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For every 80 people who look at a product, 20 will buy it.
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For every 80 customers, 20 will be repeat customers.
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Eight percent of customers are only interested in 20% of available merchandise.
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Detailed explanation-1: -The rule is often used to point out that 80% of a company’s revenue is generated by 20% of its customers. Viewed in this way, it might be advantageous for a company to focus on the 20% of clients that are responsible for 80% of revenues and market specifically to them.
Detailed explanation-2: -The Pareto Principle in business refers to the way 80 percent of a given business’s profit typically comes from a mere 20 percent of its clientele. Business owners who subscribe to the 80/20 rule know the best way to maximize results is to focus the most marketing effort on that top 20 percent.
Detailed explanation-3: -Customer Success Pareto Principle The potency of 80/20 is that 20 percent of a group is responsible for 80 percent of the sales. So, if you can retain customers or make them more than one-timers, the chances of revenue earned is more. For example, 20 percent of repeat customers are responsible for 80 percent revenues.
Detailed explanation-4: -When applied to sales, the 80/20 rule (also called the Pareto Principle) means not only that 80 percent of your sales will come from 20 percent of your customers but also that 80 percent of your sales will come from 20 percent of your sales force, according to Pinnicle Management.