Pareto Principle: The Insight of Ramadan 2018 that We Need to Know

It all started with peas.
Back in over a century ago, precisely in 1906, an Italian economist named Vilfredo Pareto discovered that 20% of the pea plants in his garden produce about 80% of the crops each year.

As an economist, the invention then attempted to apply to a larger scale with a surprising calculation: 80% of Italy's land is owned by 20% of the population and about 80% of total revenue in Italy is received by 20% of population.
In the end, Pareto also makes a prediction: that for every event, approximately 80% of the results come from 20% cause.
It became very popular when it proved to be quite accurate when implemented on various occasions, including:

80% of the company's profits are generated from 20% of consumers.
80% of road accidents are caused by 20% of motorists.
80% of product warranty claims filed by 20% of customers.
80% of tax revenues come from 20% of the population.
80% of schedule delays arise from the 20% chance of delays.
80% of diseases are caused by 20% trigger factors.
80% of applications or software installed only 20% are used.
20% of employees contribute 80% of their performance
20% of system failures cause 80% problems.
and so on and so on.

This is what we then know as the Pareto Principle or the 80/20 Rule.
However, please note that the Pareto principle is not a definite natural law whose value is always like that and can not be changed at all. This principle is just an observation that can explain well about how every thing in the world is not evenly distributed. Knowing it, we can see things brighter, change strategy and work out to maximize the output of almost every thing.
And of course, there are a variety of ideas and applications developed from the Pareto Principles that we can find in business books or more generic articles on life or self-development, particularly in matters related to productivity.

But before you poke around to find out more, let me take you to something closer, something that can be linked with this principle and the title of our article: Insight Ramadan 2018.
You and I, we all know if Ramadan is a harvest momentum for almost all areas of business and retail in Indonesia in general. Especially in the realm of online, quoted from news site Detik, Shopee released data mentioning there is a 40% transaction surge in Ramadan year 2017 ago when compared with the period January-April in the same year. Recorded no less than 300,000 transactions are recorded every day and predicted to increase in 2018.
There are at least 3 reasons that can explain this phenomenon:

There is an additional time after the meal, while ngabuburit and wait time tarawih
Purchasing power increased due to THR
Culture is all new when Lebaran arrives that is in our society
So as a businessman, seller and entrepreneur online, you also have to prepare from now to face Ramadan who will soon visit. It is suspected that this is the greatest chance you have in this year to boost sales.
Based on the Pareto principle, Ramadan, coupled with the year-end and harbolnas period (all three of us assuming a share of about 20% of the time a year) could have an 80% impact on all your achievements during 2018.
Furthermore, by using the same principle, you can also apply it to other important factors in order to welcome Ramadan this year.

1. Maximize Products / Services

First, maximize your product or service. The trick is to make a list of all of them and take approximately 20% of the top salaries, for example there are 10 then select 2 the best. Most likely it has 80% contribution to your turnover. By paying more attention to the 20%, you can increase your 80% overall results.

2. Maximize Resources

Second, maximize your resources. If you have a marketing team, admin, cs or whatever the name is, look at the 20% of the most productive because it could be they who have 80% of the job contribution or closing order. Give rewards to these people to trigger to be more productive again and make it a role model for others.

3. Maximize Time

Third, maximize your time. For a businessman, marketing plan is the most important thing than any other. Porsinya approximately 20% of the entire process that occurs from a sale. Of course you can save a lot of time by just paying attention to that 20%. And if you give more tempo there, then the resulting 80% impact will also be greater.

The point is if you want to maximize what can be achieved in the upcoming Ramadan, you should make the best possible preparation and as possible as of now. Remember the word Winston Churcill, failed to plan is to plan failure.

Lastly, in closing let me end this insight using the Pareto principle once more. My prediction, from 80% of readers of this article there will be only 20% who follow it up in real way.

The rest may not believe it, confused or wondered: since when peas can waste time so uselessly?

Welcome to the month of Ramadan!


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