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PARETO'S PRINCIPLE & WEBSITES 

Understand Pareto's Principle, Websites' Statistics, and Be on Your Way to Utilizing Your Collected Website Data.

You need to implement a bit of statistical analysis in order to maximize your ability to tailor your website to best serve your visitors.  Understanding how Pareto's Principle (sometimes called Pareto's Law) applies to website traffic can help:

Pareto's Principle & Websites: Background     Pareto's Principle Websites Background

In 1906 a man by the name of Vilfredo Pareto made an observation. He observed that 80% of all the land in Italy was owned by only 20% of the people. He then went on to observe other areas where the 80% and 20% seem to hold. Later individuals picked up on his ideas and codified the principle as the Law of the Vital Few, with some even calling it Pareto’s Law.

Pareto’s principle is far from a law that always holds true.  However, the 80-20 ratio pops up often and sometimes in the most unexpected places.  Whenever the principle proves itself valid, many actions can be guided by the expected results.  It is a generally accepted rule in business, for example, that 80% of a business’ sales will come from 20% of its clients.  Because of this, every good business will do their best to serve the specific needs of that 20% in order to improve financially.

Pareto's Principle & Websites: Traffic Trends     Pareto's Principle Websites Trends

Pareto’s Principle holds true for most websites when it comes to traffic that visits the site.  These approximate numbers are a good benchmark for any new website:

80% of a new website’s traffic will come and go quickly, usually in less than 5 minutes.
20% of a new website’s traffic will stay longer than 5 minutes.

With such a benchmark, you can evaluate your Website Data Collection to see if you are at least where you should be regarding the time your traffic spends on your website.

An interesting thing about Pareto’s Principle and website traffic is that the principle seems to hold within the top 20% as well.  In other words, about 20% of the top 20% will be your “elite” traffic.  This elite traffic will be those people who spend a lot of time on your website.  This top 4% will spend an hour or more on your website.  This elite traffic is tremendously valuable.

Pareto's Principle & Websites: Practical Steps     Pareto's Principle Websites Steps

So, how does understanding Pareto’s Principle and how it applies to website traffic effect what you do?  It can and should guide your marketing efforts and provide feedback about the value contained within your website.  Let me explain:

 

You should be doing everything you can to be Getting Website Traffic.  And, with Pareto’s Principle in mind, you should be doing everything you can to bump up traffic into each more important category.

 

First, increase your overall traffic. Implement a SEO Strategy. Get more people to your website. This increases the base numbers you have to work with. This is good.

 

Second, do your best to figure out what keeps people on your website for 5 minutes or more. Employ Marketing Principles to grab their attention, keep them interested, and serve them with valuable content. In other words, keep them reading. The more they read, the longer they stay on your website. The more they stay, the more trust you build by giving them beneficial content.

 

Third, make sure you have a 4%. You should use a Content Development Plan and have a lot of good, original, relevant content written before you publish. It should take people days to read everything on your website. If someone can read all your material in a brief visit, why should they come back?

Pareto's Principle & Websites: The Target     Pareto's Principle Websites Target

Ultimately, you want to make a good enough impression on a visitor that they bookmark your website and return again and again (and, of course, make your Tab Icon pretty!).

 

Analyze your collected data.  If you have greater than 80% of your traffic bolting after just a few minutes, work harder on catching their attention.  Maybe you are missing some of the Components of a Business Website.  Do what you have to in order to keep them on your website longer (but don’t trick them or use annoying methods like pop-ups as those tactics are counter-productive)

 

Keeping your traffic on your site for 5 minutes is hard.  Most traffic “bounces” on and then right off again.  For those that do stay, be sure to convert as many as you can into the 4% elite, and keep them there.  That means you have to be continually producing content for your website.

 

Making your way into a person’s bookmark list is a huge accomplishment.  That individual is much more likely to become one of your elite 4%.  It has been reported that the average internet user visits twelve websites every day.  It is hard to break into this group for any website.  If you get bookmarked, you will likely get re-visited.  Then, you’ll have more opportunities to serve and profit.

Pareto's Principle & Websites: Conclusion     Pareto's Principle Websites Conclusion

Pareto’s Principle can help you understand the numbers a little better.  After all, what good is website data if you can’t use it for anything practical?  Keep the principle in mind when you evaluate your numbers.  If you see an 80% from 20% relationship, figure out why and then use that understanding to guide your actions.

 

Another statistical principle you can benefit from understanding is The Long Tail Principle.

 

 

Copyright © 2010, Issachar Knowledge, LLC: Pareto's Principle Websites

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