The Pareto Principle And Affiliate Marketing

The Pareto Principle and affiliate marketing are intricately linked. If you’re an affiliate it’s worth knowing about the Pareto Principle also known as the 80/20 rule. Vilfredo Pareto was an Italian Polymath whom the Pareto principle is named after. Pareto observed that 80% of the wealth in Italy belonged to about 20% of the population. But the Pareto principle shows that states that for many outcomes, roughly 80% of consequences come from 20% of causes.

Of particular interest for affiliates is that the 80/20 rule explains that 80% of the desired outcomes come from only 20% of activities. While this relationship while may not be exactly true in every situation and circumstance, it is the “power law” relationship is of interest.

As beginner affiliates there’s several things we will spend time and energy on. These activities might be things such as:

• Watching information videos
• Learning how to build a website
• Setting up your website
• Blogging or creating video content
• Setting up a sales funnel
• Setting up an email marketing campaign
• etc.

The Pareto Principle And Affiliate Marketing: Learning Versus Implementation

In the beginning there will be a lot of work simply studying, so you’ll be spending time without seeing an immediate financial reward. The beginning phase of affiliate marketing will likely be 90% of your time being spent on studying and learning. The other 10% of your time will be spent on setting things up.

These might be actions such as joining an affiliate program, getting your affiliate link and starting a promotion method. The rest of your time will be spent on watching training videos and if you’re following one, using a step by step setup process to build out the infrastructure of your affiliate business. (Sign up here to get started with a step by step program).

Once you have set up your affiliate infrastructure (sales funnel, product and affiliate links for example), you’ll need to focus on a marketing method. At this point you should switch from 90% learning and 10% implementation to 80% marketing and 20% learning.

As a beginner, it can be easy to get stuck in learning mode, thinking of it as progress. While it may be progress in a knowledge based sense, there’s no actual physical results from your knowledge until you start to implement that knowledge and start making progress “on the ground”. See also problems with affiliate marketing. Your marketing method is where the rubber meets the road and until you start to implement some kind of marketing, you won’t see any results in terms of sales.

The Pareto Principle And Affiliate Marketing – Failing Forwards

When you do start to implement a marketing strategy, whether it is blogging, video or paid marketing, you’ll likely experience some problems too. You can expect many of your advertising campaigns to fall flat, for instance.

Keep in mind this is the Pareto Principle working as you learn which strategies work for you and which don’t. It is here that you’ll probably experience the 80% of actions which don’t produce the outcome you want. If you’re lucky you will also experience some positive results (some of the 20%).

It is here where the majority of beginner affiliates will totally give up on affiliate marketing. But this is a big mistake. If only they stuck with it they would see that Pareto’s Principle is at play here. By sticking with it, and keeping going, you will discover the 20% of actions which give you the results you’re after. When that happens, you can “zone” in on those actions only, and discard the rest.

So lets look at an example assuming the Pareto Principle holds exactly to the 80/20 rule. You run several advertising campaigns most of which bomb and don’t produce any sales at all. Perhaps you have got your targeting wrong, or your campaign doesn’t speak to your customer avatar and their specific problem congruently. See also affiliate marketing customer avatar worksheet. But you stick at it and eventually an advertising campaign starts producing sales for you. 80% of your adverts didn’t work and 20% do! Now you can stop running the 80% and concentrate on the 20% which produce the outcome you want!

Testing And Measuring

Testing and measuring of advertising campaigns can be done to get to this point. But once you’re consistently producing sales with an advert, you can test and measure similar adverts with small changes, looking for better and better results each time.

This is known as split testing and it is used to measure one advert against a similar one over a number of visitors. After consistently running two adverts side by side and testing slightly different images or headings for example, an affiliate can determine which one is the best performer over time.

Let’s imagine that one advert produces 100 sales and the other one produces 150 over the same amount of visitors/clicks. You can see that the higher converting advert is obviously better. Now you’re in a position to spend more time and advertising budget on the best converting campaign.

Here’s an example of focusing in on the 20% of actions which brings about 80% of the results you want, or the Pareto Principle.

The Trouble With Affiliate Marketing

The trouble with affiliate marketing is that you won’t know which activities to focus on in the beginning. It can be quite frustrating trying various actions without any tangible results. This is one reason why so many affiliates will quit.

They try a few things, nothing works and they give up. However, for those who stick with it there are great rewards. Once you discover the 20% of actions which actually work and consistently drive your business forward, affiliate marketing can be very lucrative and allow you to make sales in your sleep!

There’s a 95% drop out rate among affiliates so it’s obviously not an easy path. Knowing the Pareto Principle and how to apply it to your business will help you get the focus you need to keep “failing” forwards until you hit upon a meaningful action which you can repeat on autopilot to build your business. See also why most affiliate businesses fail.

The Pareto Principle And Affiliate Marketing

80% of the outcomes you want as an affiliate (regular sales) come from 20% of the actions you take. So if you’re not making any sales yet as an affiliate the answer is to try another marketing method or another advertising campaign. Your product must be aligned with your customer avatar and you must communicate congruently throughout your marketing campaign, speaking in a language which is understood by your customer avatar.

Even with all your “ducks in a row” there’s usually some adjustments to make and learning to do. Most advertising campaigns don’t give you an immediate profit. But once you figure out a profitable campaign, you have effectively found the 20% of action needed to produce the 80% of outcomes you desire for your affiliate business.

Affiliates I’ve met through this online community have spent a long time testing and measuring campaigns long before they find a profitable one. This explains to some extent why 95% of affiliates quit. The 5% are the ones determined enough to keep going and trying new things consistently and for long enough to find that 20% they need to make it work!