There are many different ways to apply the 80/20 rule. The law states that roughly 80% of the effects come from 20% of the causes.
80% of your business comes from 20% of your customers or products. 80% of your new ideas come from 20% of your employees. 80% of revenue comes from 20% of your marketing.
But the sad news for small businesses, or big businesses that don’t fit into the “biggest” businesses category is that less than 20% of companies make up more than 80% of marketing dollars that are spent each year. The figure is probably closer to this (based on no research):
90% of ad dollars are spent by 1% of companies worldwide. Check out this chart, for instance.
So how are small businesses supposed to compete? How are you supposed to get the word out when you’re battling budgets 100, 1000, or 1000000 times the size of yours?
The answer is simple, be creative and make every dollar count. Marketers that manage large budgets fall into the trap of thinking that large budgets mean they don’t have to track every dollar. Spending more means more success, for them.
We know that’s not the truth, and that smart marketers can overcome disadvantages in the size of their budgets.
Still, it’s daunting.