The Pareto Principle states that roughly 80 percent of the effects come from 20 percent of the causes. To put this into a business perspective, most of the time a smaller percentage of clients account for the majority of income. With this post, we’d like to help you find people who fit into this category using Facebook adverts and social analytics tools.
The Pareto Principle is named after Vilfredo Pareto, an Italian economist who published a study in 1896 to prove that 80 percent of the land in Italy is owned by 20 percent of the population.
Since then, from engineering to e-commerce it has been used in many fields as a rule of thumb, besides agriculture. And while the exact numbers may differ, many business owners are convinced that the majority of their income comes from a small group of clients.
In theory, if you could find people who have similar characteristics to this core group of customers and call their attention to your business offer, you could increase your revenues significantly.
If you are running a successful e-commerce site or an online service, finding your 20 percent and learning about its characteristics isn’t as difficult as it sounds. You have several tools at your disposal that can help you achieve this.
First of all, you can simply look at the data about purchases or subscriptions and collect the email addresses of those visitors who regularly purchase at your store, spend the most amount, or have been subscribing to your service for the longest time.
Once you create a list like this, you’ll be able to target users on Facebook who share similar characteristics to your most loyal customers.
For this to work, you’ll need to create a custom audience from the email addresses that you’ve collected. Here you can find a detailed description about how you can do that. When you’ve uploaded your list, create a lookalike audience from your custom one and target them with your adverts.
If you were able to compose the list accurately, this method will very likely bring the right kind of visitors to your site.
Of course, the more you know about your audience, the better your results will be.
There are many methods of researching your audience that you can apply in order to understand your most loyal customers on a deeper level. Among other things, you can create surveys, shadow your customers, and, of course, talk to them in person.
What you need to find out is exactly what kind of people they are, how they refer to your products, and what problems your service can solve for them.
Every little detail that you learn this way can make your website and your adverts more effective. For example, if you know what type of blogs your best customers visit and what topics they are interested in, you’ll be able to write much more convincing copy.
Or if you are aware of the expressions they use to describe your product, you can avoid targeting the wrong keywords and confusing your visitors.
Besides using traditional target audience research, there’s one more thing you can do to find out more about your visitors.
Install a Facebook Login on your site, and encourage your visitors to use it and sign into your site with their social media profiles when they need to provide data for purchases or subscriptions.
A Facebook Login will make the registrations on your site much more comfortable. And if you install it with a social analytics tool (like the one we developed), it will allow you to collect information about the likes, preferences, professional interests, education, and other attributes of your visitors, too.
The analytics tools, of course, won’t replace the surveys or personal meetings with your customers, but they can complement it. And, if you compare the data you obtain through logins with information about the on-site behavior and the purchase history of your users, you will have a much clearer picture of your 20 percent.
Finding your future customers
The methods we described above will, of course, only work if your site has been operating for a while and you have enough traffic to determine who your most loyal customers are, and what common attributes they have.
If you have a new website or just launched a new product, you won’t be able to identify your 20 percent this way. But there’s a method that can get you closer finding them, even in this case.
It is very likely that you have a general idea about what kind of people that your product or service is a good fit for. Create a small sweepstakes or a landing page, taking into account the characteristics of those people and add the Facebook Login and a social analytics tool to them like we described above.
Then use Facebook Ads Manager to target those people on the social network. So for example, if you believe that single women between the ages of 25 to 35 living in large cities and interested in fashion site updates will like your product, create a landing page and advertisements that talks to them directly.
Then promote your landing pages or sweepstakes for a couple of weeks and see what happens. If your assumptions were correct, the visitors are going to click on your call to action and log in to your site or app, revealing additional information about themselves along the way.
If your ads and pages underperform, you can always fine-tune targeting, or aim for a completely different group of consumers. You can repeat this process as long as you like. Sooner or later you it will help you find a perfect match for your new product.