Pareto is an analytical decision making tool based on the 80/20 rule. The Pareto principle revolves around the fact that 80% of a task can be completed by completing 20% of the work, or that 80% of problems to fix are caused by 20% of underlying issues. In Marketing we can use this theory to consider that 20% of the customer communications could lead to 80% of the desired response, or that 20% of your product portfolio could yield 80% of a sales target.
Pareto Prerequisite: To use the Pareto Solution in Orbit, your FastStats system must be running the Q2-2020 release or later
A Pareto chart contains a column chart and a line graph. The column chart shows our values in descending order to identify the best sellers or the best buyers. The line graph shows the cumulative percentage, or rolling total as a percentage to enable you to easily identify percentage thresholds.
Orbit includes two types of Pareto analysis - a Category level and an Banded Pareto - enabling you to answer questions such as: Which are the top product categories that equate to 80% of my sales, or Who are the top 20% of my spenders?
The Category Pareto allows you focus on mainly transactional data to identify, for example top selling product categories or most popular booking destinations. By defining a Category variable and a numeric variable, the resultant Pareto chart will sort descending by category based on the numeric value defined. The line chart will then show you a cumulative percentage total based on your numeric value so that you can quickly select those categories which bring you most success. You can then add these to a User Filter or create an Audience.
Tooltips display the discrete and cumulative number of records in each category, the cumulative proportion of all records and cumulative proportion of all categories.
- You can select between an Ascending or Descending view
The Pareto chart shows whatever ratio occurs in the data, not necessarily 80/20
See Category Pareto
The Banded Pareto allows you to focus on identifying your top customers based on a numeric variable. You can use this option of Pareto to understand, for example your top spenders based on a revenue variable, or your top complainers based on a number of complaints variable. Again, the rolling total percentage will allow you to select the percentage of people you wish to focus on by allowing you to add to a Dashboard Filter or even create an Audience.
See Banded Pareto
Where to find it?
To add either Pareto tile to a Dashboard, firstly put the Dashboard in Edit mode, add a tile. From here navigate to the Solution tab in the Visualisation Library and select which Pareto type you wish to use.
Using the Pareto Chart
In this example destinations are sorted descending by profit and a cumulative percentage of profit has been added as a secondary axis - we can see that our most profitable destinations are the United States, Germany and France.
Using Pareto as a Filter
Clicking on any column will auto-select all the higher value categories to the left, allowing you to apply them to a User Filter to filter the Dashboard, or use that filter to then go ahead and Create Audience.
Here the secondary axis has been selected to find 80% of profit. By selecting the node on the secondary axis, United States, Germany and France are highlighted sand you can now apply them to your User Filter.
- Clicking Add to filter will apply a filter to the whole Dashboard.
You can add or remove categories as required. Select or deselect the categories and choose Update Filter to apply the updated categories to the User Filter.
- Pareto filters are shown in a separate PARETO filter section if you have added any other filters, you can Delete just the Pareto filters using the delete icon
- To clear a Pareto filter, select the Clear Pareto Filter option on the chart or delete the filter from User Filters
When categories have been applied to a Filter, the Filter will name the Categories selected. If data changes and these categories are no longer the top performing, the filter will need to be updated by selecting the categories again. Where an Audience has been saved using the Pareto filter, the data will not currently update automatically.
Understanding Pareto Filters
As well as applying the selected categories as User Filters, any selected categories will also affect the display of data in the surrounding tiles. This will allow you to add other tiles to understand, for example, the profit acquired from these destinations, the seasonality of the sales of products, the best selling regions that make up a percentage of your profit or the type of holiday which is most frequently booked for the top performing destinations.
You can update or decrease the percentage value or the number of categories selected, so that patterns in the data can be explored.
If User Filters are added from other tiles on the Dashboard, all tiles except for the Pareto tile will be affected. The Pareto tile will remain in its original state, showing the value and categories based on the Dashboard Filter only.
View Underlying Data Grid
If the option to Show Underlying Data Grid was selected when the tile was set up in the Visualisation Editor, then a grid icon will be displayed in the bottom left of the tile.