Intelligence-driven, scalable insights for onboarding, adoption, retention, and revenue growth.
Understand your customers interactions with your product and make informed product success decisions.
Bring efficiency, add scale, and connect user behavior to personalized actions.
Define and track onboarding by phase, user progress, account, and portfolios.
Identify, monitor, and execute timely account expansions with real-time reports and indicators.
Proactively identify at-risk customers and prevent churn using automation, early warning insights, and more!
Optimize product usage by monitoring in-depth user data and receiving actionable insights
Improve decision making and actions for enhanced outcomes.
Get a complete view of your customer and all their moving parts.
Create the right scoring system for your organization.
Deliver consistent customer experiences and repeatable success.
Increase your productivity real-time, automated alerts.
Create groups across accounts and users.
Drive adoption, upsell and cross-sell using extensive product data.
Reach out to groups of customers when you need to.
Create surveys to get timely feedback from your customers.
Automate your actions, alerts, surveys, and more.
Create and track tasks across teams.
Create alert rules that are flexible.
Manage, analyze, and optimize your customer interactions.
Proactively uncover key insights and receive data-driven recommendations for your team.
Transcribe your calls and catch key phrases used by customers to trigger actions.
Get status updates, warnings, and extensive reports at the right time so you can make effective decisions.
Create, monitor, and automate comprehensive Playbooks for every scenario.
We aren’t just any Customer Success platform. We have the insights, imagination, and technology that others don’t.
Our core values, team, and community
Come work with us!
Get in touch anytime.
Employee success drives customer success.
Don’t miss an episode of the Customer Success Intelligence Podcast
Our annual survey captures the current state of CS Intelligence and automation.
Resources for new and seasoned Customer Success teams.
Still undecided? We can help!
Features and SDKs you can integrate into your apps.
Resources and insights straight to your inbox.
The Pareto Principle (80:20 rule) in Customer Success represents that 80 percent of your revenue is from 20 percent of repeated customers or loyal customers
Chances that you may have heard about the 80:20 rule or the Pareto Principle are high. The Pareto principle is also called the law of the vital few. The idea is- 80% of the effect is produced from 20% of the cause of the event.
In 1906, Vilfredo Pareto from Italy made an observation that nearly 80 percent of Italy’s land was owned and controlled by nearly 20 percent of the population. This finding led him to explore other countries where he noticed similar situations. This principle has then been applied to various spheres like software, business, marketing, and more. In marketing, the Pareto principle says that 80 percent of your sales are represented by 20 percent of your customers. If companies break free from this, they will increase profits.
So, how does this fit with Customer success? What is the Customer Success Pareto Principle? That is what we will find out in this post.
A well-known customer success law, the Pareto principle says that repeat customers generate revenue that is nearly 16 times more efficient than one-time customers. 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. Their revenue efficiency is 80/20 = 4.
For 80 percent of one-time customers, the contribution to the revenue is 20 percent. Their revenue efficiency is 20/80 = 0.25
This stresses on the importance of customer retention and customer loyalty. Customers have the power to maximise profitable income and minimise the misuse of investment and assets. Here are some points every company must consider before making any decision.
Number of Customers: How many customers constitute the 80 percent and how many the 20 percent? This will be useful in determining if the customer base is increasing or shrinking.
Locations: Knowing where your customers are located also helps. This helps understand the potential for growth in specific geographic locations.
What do they buy: Understanding what customers buy and why is also helpful. This will improve profit outcomes.
Every customer contributes to the market share. The size of the organisation is what affects the market and helps find scope for investment. It is important to keep the Pareto principle in mind while not faltering on keeping customers retained.
Customer support is integral to any business. The need to ensure that customers are satisfied is important for any business. As per the Pareto Principle, nearly 80 percent of customer complaints are about 20 percent of products or services. This means if one analyses which products or services are causing problems- the chances of sorting these customer service issues are higher. By keeping the 80:20 rule in mind, you can also focus on how customer service personnel address a customer complaint. This way we can understand what aspects of the customer service need to be altered.
To make sure customers get the revenue as per the Pareto Principle, there needs to be a revenue shift. A loyalty rewards program will help shift revenues to more stabilised sources. This will map for revenue increase in an 80-20 distribution.
The Pareto Principle for customer education says that focusing on 20 % of your product that 80 percent of users will realise.
80/20 is highly successful for businesses and organizations. Find out which 20 percent of your products are contributing to 80% of sales or profits. Keep improving on the marketing, sales, and development of these products. You can amplify the sales of these products to get better profitability. Compare how data looks and draw insights from it.
Of your repeat buyers which 20% are responsible for 80% of repeat purchases? Re-connect with them. Consider finding out what made them leave. Focus on nurturing your relationship with them. Which states or nations do most of your sales come from? Does it make up 80%? Of the region? Improve marketing efforts there.
It can mean that 20% of your customers account for 80% of complaints. It can mean that 20% of product features cause 80% of the program bugs.
Vital Tasks20% Attention80% OutcomeThese are vital tasks that are necessary and vital for the success of the business.You can focus 20% of time on making sure these tasks are done in a right manner.This will lead to 80% of outcome due to their importance.
Before anything, it is important to define user types. With knowledge of different user types, we need to train CSMs to understand and track them. This will help customers get an idea of the unique aspects of the product.
Customers have a lot of things in common. You can always find threads that run through them making them similar. Find out the 20% use cases in almost 80 percent of customers. This will help engage with customers, understand their goals and objectives behind using the product or service. When we understand their motivations, they will stick to guide users along.
Use the Pareto Principle here- find out the 20% of cases where 80% of customers need help. With the information that will address these issues, CSMs need to help. CSM communication is a scalable way to help customer respond better to various situations and make better use of products.
To apply the 80/20 rule in customer success, you need to create the right content. There is no need to create a lot of content. It should be minimal and possible to leverage across the company. Good blogs, marketing videos, knowledge articles, and documentation will help customers get the information they need.
The next way is to understand and define user roles. Understand what each role needs to do and deliver accordingly. If you align user outcomes with product, you can make sure training is optimised for outcomes.
The Pareto Principle is powerful and can be applied to any business. The 80/20 rule can be applied to any business to understand profitable income, market share, geographic coverage, and overall costs. This will help understand opportunities for growth and productivity. Applying the 80:20 rule for customer success will save a lot of time, effort, and resources. However, it is not a method to explain or come to an analysis about an event. It helps us understand what should be focused on for better yield, improved growth, and impact on end goals. This will help identify what aspects of the business are not at their full potential and why. Using the Pareto Principle in Customer Success will help identify how to optimise customer success operations for overall business growth.26
Published 17 Mar 2021, Updated 1 Jun 2021
Do you wish to learn the difference between a customer success manager...
17 Aug, 2022
Are you aware of the difference between QBR and EBR? If not, check out...
16 Aug, 2022
What are the best strategies for leveling up your business? Let us try...
11 Aug, 2022
Sign up for SmartKarrot’s newsletter.
See how SmartKarrot can help you deliverwinning customer outcomes at scale.