Vilfredo Pareto, an Italian engineer and economist, came up with the Pareto Principle or the 80/20 rule. The pattern of predictable imbalance stems from his discovery that 20% of the population own 80% of the wealth 80%

1. AI to Improve Vilfredo
Pareto’s 80/20 Rule
KPI Fire

2. Vilfredo Pareto, an Italian engineer and economist, came up with the Pareto Principle or the 80/20
rule. The pattern of predictable imbalance stems from his discovery that 20% of the population own
80% of the wealth 80%
The use of this basic analysis is as a guide for improvement. It helps focus on things that have the
biggest impact and examine the influence of various factors.
The 80/20 Rule Applied to Improve KPI
Using the 80/20 rule eliminates the time wasted in marketing activities. It can save businesses time
and money.
All businesses have to do is assess the results of their digital marketing efforts and determine the 20%
that perform the worst. Once they get rid of these, it will improve their performance.
It will not, however, always be 80/20. There are possibilities of the results being 90/10, 85/15, or
even 99/1. These are acceptable, as the principle is all about the predictability of imbalance and that
the results are rarely 50/50, in which 50% of causes produce 50% of results.

3. Driving Profitable Innovation Beyond Conventional Analytics
As AI and machine learning continue to transform analytics, there is a chance that future algorithms
may improve and redefine how organizations use the 80/20 rule.
The Harvard Business Review shares three ways to do this.
Smart Paretos: Data, in large volumes and wide varieties, make algorithms smarter. These
eventually become digital networks the turn into Pareto platforms transforming vital variables into
new value.
Super Paretos: This is where the vital few become the “vital fewer.” Digitally slicing and dicing the
data create training sets for smart algorithms.
Supra-Paretos: This is where data becomes more granular and algorithms can process complex
patterns more efficiently.
With smarter algorithms in place, the need to implement the Pareto principle becomes even more
vital.

4. Sources:
https://hbr.org/2017/02/ai-is-going-to-change-the-8020-rule
https://www.kpifire.com/
http://www.investopedia.com/terms/p/paretoprinciple.asp
https://born2invest.com/articles/4-digital-marketing-analytics-secrets/