The 80/20 Rule in Growth: Why Chasing Everyone Means Catching No One
Discover how applying the 80/20 Rule in growth strategy helps you focus on high-value customers, boost retention, and drive ROI. Stop chasing everyone and start scaling smarter.
The biggest lie in business growth? That your product is for everyone.
Spray-and-pray is dead. Focus is sexy. And, let’s be real (profitable).
It’s Week 3 of my Digital Transformation & Change Management program by BCG, and the theme is human-centered design. One idea hit like a cold plunge in the morning:
You can’t design for everyone. There are always trade-offs. Trying to please all is the fastest way to delight none.
That’s where the Pareto Principle, or better known as the 80/20 Rule, becomes your north star.
In growth, 80% of your revenue often comes from just 20% of your customers.
The rest? Noise. Distraction. Burned budget.
Your job isn’t to chase the crowd. Stop being everything to everyone.
It’s to find your core. Nurture it. Obsess over it.
Focus is the new growth hack. And it’s wildly underrated.
1. Not All Customers Are Created Equal (And That’s Okay!)
Let’s kill the myth of equality. In reality, a small percentage of your customers are doing the heavy lifting. They’re not just buying more; they’re telling their friends, sticking around, and coming back for more.
Think of them as your VIP section who drive revenue, referrals and repeat purchases.
So, how do you find them? Two growth-grade tools:
RFM Segmentation
Recency: When was their last purchase?
Frequency: How often are they buying?
Monetary: How much are they spending?
LTV Estimation
Estimate the lifetime value of each user:
Plot their retention curve based on how long they stick around.
Multiply that by their average spend over that time.
This isn’t data science for fun. It’s data science for focus.
Once you know who your MVPs are:
Prioritise them like your business depends on it (because it does).
Personalise their experience like a five-star concierge.
Redirect your marketing spend, creative muscle, and retention strategies to this top tier.
💡 Key Takeaway:
“Trying to please everyone is a shortcut to pleasing no one.”
Serve your stars. Let the rest orbit.
2. Market Size vs. Unmet Needs: Choose Depth Over Breadth
Here’s a hard truth most growth hackers avoid:
Big markets are sexy but stupid if they’re saturated.
Everyone wants a slice of the "mass market" pie, but few realise that the pie is overbaked, overpriced, and overcrowded.
Instead, flip the funnel:
Find the Niche with Pain (and Money)
Zoom in on high-intent, underserved groups.
Love, Bonito didn’t try to become a global Zara overnight. They built a cult following by solving one deep problem: fashion that fits the Asian female form. A narrow problem. A massive following.
Kopi Kenangan didn’t try to take on Starbucks head-on. They zoned in on Indonesia’s growing middle class craving affordable, consistent, grab-and-go coffee, and built a tech-enabled chain to deliver just that.
Use the Market Opportunity Matrix
The formula for ROI gold:
High Unmet Needs × High Willingness to Pay = 💰💰💰
You're not trying to win a popularity contest. You're solving real problems for people who care.
💡 Key Takeaway:
“Depth scales faster than width.”
Start narrow. Dominate. Then expand with leverage, not desperation.
3. Personalisation Is the New Mass Marketing
Want to know the most powerful growth lever that’s underused?
Feeling seen.
Once you identify your top 20%, don’t treat them like the rest. Treat them like they matter—because they do.
Roll Out the Royal Carpet
Invite-only offers
First dibs on new products
Tailored content journeys
Surprise gifts just because
Loyalty isn’t bought. It’s earned through thoughtful touchpoints.
Predictive Analytics = Superpower
Use AI and machine learning to identify high-potential users early.
Someone who refers 3 friends in 7 days? Likely a future whale.
Someone who binge-uses your product in Week 1? Roll out the welcome mat, stat.
Retention = Rocket Fuel
Still obsessing over CAC? Shift your lens.
A 5% increase in retention can drive up to 95% more profit.
Retention compounds. Acquisition leaks.
💡 Key Takeaway:
“80/20 isn’t just about efficiency. It’s about empathy.”
You’re not scaling numbers. You’re deepening relationships.
Final Thoughts: Focus Is the Ultimate Flex
Let’s be clear. Growth isn’t just a popularity contest anymore. It’s not about who has the most followers, impressions, or viral moments.
It’s a resource allocation game.
And the house always wins when you know where to place your bets.
The winners?
They don’t obsess over being liked by everyone.
They double down on the right ones, the customers who stay, spend, refer, and evangelise.
Growth doesn’t come from being louder. It comes from being sharper.