One of the best ways to identify what Juran calls the "vital few" customers, is...

Dr. Joseph Juran, a renowned quality management expert, introduced the concept of the “vital few” and the “trivial many” in the context of quality improvement. Let’s explore this further:

The Pareto Principle (80/20 Rule):

The Pareto Principle, also known as the 80/20 Rule, states that approximately 80% of effects arise from 20% of the causes. In other words, a small percentage of factors contribute to a large proportion of the overall effect.

Juran applied the Pareto Principle to quality issues, emphasizing that 80% of problems are created by 20% of causes2.

The principle gets its name from the Italian economist Vilfredo Pareto, who observed that a relative few people held the majority of wealth (20%) back in 1895. Juran extended this concept beyond economics to various aspects of quality management.

The “Vital Few” and “Trivial Many”:

Juran coined the terms “vital few” and “useful many” (or “trivial many”) to describe contributors to a common effect:

Vital Few: These are the critical few factors that account for the bulk of the effect. They are highly influential and deserve special attention.

Useful Many (Trivial Many): These are the remaining factors that contribute to a smaller proportion of the effect. They are less impactful individually.

In the context of customers, the “vital few” represent a small group whose needs and requirements significantly impact business outcomes.

Identifying the “Vital Few” Customers:

To identify the “vital few” customers, organizations can use techniques such as:

Pareto Analysis: This method involves analyzing data to identify the most significant contributors. By focusing on the critical few customers, companies can allocate resources effectively.

Sales Analysis: Examining sales data can reveal which customers generate the highest revenue. These high-value customers are likely part of the “vital few.”

Individual Attention: The “vital few” customers deserve personalized attention. Their specific needs, preferences, and feedback should be addressed individually.

Customer Satisfaction Surveys: While customer satisfaction surveys are valuable, they may not directly identify the “vital few.” However, they can provide insights into overall customer sentiment.

In summary, Juran’s classification system emphasizes that the “vital few” customers require special attention due to their significant impact on business success1. Organizations should prioritize these customers to enhance overall quality and performance.

References:

1: Quesba: According to Juran’s classification system, customers who…

2: LifeQI System: Joseph Juran - Founder of many of the key quality management programs