Virtually every business seeks to increase its profit from customers, but few business executives realize that a universal principle governs their customer profitability. They may be applying the 80/20 rule to sales, quality control, investing, production, or other business functions without realizing that the 80:20 ratio actually summarizes the Pareto distribution of inputs to outputs. According to his equilibrium theory of relationships, stability is reached when inputs in the top 20 per cent generate 80 per cent of the outputs while inputs in the bottom 80 per cent generate 20 per cent of the outputs. Recently mathematicians confirmed that the Pareto distribution is as universal as the normal "bell-shaped" distribution, but is log linear and predicts results, rather than probabilities.
Elizabeth Kruger has taught at the Thunderbird School of Global Management and several other colleges, as well as developed and sold MapWise(R) perceptional mapping software for correspondence analysis to marketing researchers around the world. Kruger also worked with business students to establish collegiate chapters of the American Marketing Association and Rotary International and used worldwide data to substantiate Maslow's Hierarchy of Needs and Ricardo's Comparative Advantage Theory.