The Pareto Principle, aka the 80/20 rule, is named after Italian economist Vilfredo Pareto (the dude in the picture) who in 1906 found that 80% of the land in Italy was owned by 20% of its people. Ok, but why is it called a principle? Well, he carried out surveys in other countries and found that the 80/20 distribution occurs frequently. Nowadays in business, this principle is a common rule of thumb, for example, in general, 20% of customers represent 80% of sales, 20% of time spent produces 80% of results… you get the gist.

If you apply the Pareto principle to a bar chart, the result will be values plotted in decreasing order of occurrence, organized from left to right. As a result, the chart clearly illustrates which factors have the greatest impact and what problems need the most attention, making them extremely useful in a variety of situations.

When to use the Pareto principle in a chart?

• When analyzing survey frequency data.
• When there are many items, and you want to focus on the most significant one.
• When analyzing broad issues by looking at their specific components.
• When sharing your survey data with others.

The Pareto principle is without a doubt a necessary tool for you to know better. That’s why we’ve made it very simple for you to create your own. Want to learn how? Click here.