I regularly find myself reading about the Pareto principle in productivity literature. Generally, it's quoted as '80% of the results come from 20% of the work', or more popularly, '80% of the sales come from 20% of the customers'. A particular offender of this line of thinking is Tim Ferris, who spends a lot of the four hour workweek recommending that people drop the 80% of time they spend on work and take the financial hit of 20% loss of sales (he says at lot of other things, but this is simple an aspect I'm having trouble with).
Here's my issue.
Let's say I'm a normal everyday salesman, working 40 hours and selling $1,000 worth of stock a week. I find out which 20% of my customers are providing 80% of the profit and I ignore all others. I now find myself working 20% of the hours (so 8hours a week) and selling $800 worth of stock. Yay!
One year later, I decide to look again at my customers, and pick out the 20% of the remainder that are providing 80% of the remaining value. Again I drop the 80% of customers I decide I don't need. If the Pareto Principle is a genuine thing, I should now find myself working two hours a week for $640.
Next year I do the same again and I'm now working for just over 20 minutes for $512.
I realise I have time to get my old job back and start again except, this is clearly getting silly. Have I misunderstood something? Or is this one of those times where a scientific observation is being invoked in name only to make an unrelated point?
Okay, I don't think I was very clear - (althought @jay's answer appears to cover) - I wasn't asking what the advantages were, or suggesting the method - I was asking if the Pareto principle as generally quoted is in any way related to the Pareto principle as it was formulated and should be used. (For example, I wouldn't have been suprised by an answer which said "The Pareto principle was formulated for countries/companies/fruit, and thus does not make any sense to overgeneralise to a list of jobs"