When you use a Pareto analysis, you are taking information and grouping it into similar categories. You then rate the information in importance and that will tell you which area(s) you need to work on first. For example, let’s say you were given the task of improving customer service ratings by 15% over the next quarter. How are you going to begin doing this? The Pareto Principle says that 20% of your efforts result in 80% of the results. So if you want to get the most return on your investment, how do you determine what that 20% should consist of?
Let’s start by looking at the results that you’ve been given. Imagine that you have the information in following Figure from a series of customer service surveys that customers completed last quarter:
At first glance, you might say that the third complaint, “Staff members don’t know the information customers need” should be your priority since it had the most complaints. But let’s see if that would be the most effective.
Examine the complaints to determine which ones are related. You might end up with a list like this:
• Customer Response and Courtesy – 37 (Items C and D)
• Order Fulfillment – 31 (Items E, F, and H)
• Return Policy – 6 (Item G)
Now by examining the results you can see that you would have the best results if you focus on customer response and courtesy, followed by the order fulfillment process. By prioritizing your efforts on these two areas, you’ll be responding to 68 out of 95 of the complaints received, or nearly 72% of all complaints.
