In B2B marketing, few concepts are as significant yet as misunderstood as the 95-5 rule. Originating from research conducted by Professor John Dawes at the Ehrenberg-Bass Institute, the rule highlights a critical truth: at any moment, only 5% of your target audience is actively searching for a product or service, while the other 95% are not in the market. This reality poses both a challenge and an opportunity for marketing leaders. How do you engage the 95% who aren’t ready to buy, while still appealing to the 5% who are?
The answer requires rethinking traditional demand generation strategies. Instead of focusing solely on immediate sales, successful businesses take a longer-term approach. This involves nurturing future buyers while still capturing those who are ready to purchase now.
The Myth of “Always-On” Buyers
Many marketers mistakenly believe that buyers can be persuaded to purchase at any time, provided they receive enough engagement. In reality, most of your audience (the 95%) is not currently looking for your product, no matter how persuasive your marketing may be. This doesn’t mean your marketing is ineffective—it simply reflects the natural cycle of B2B purchasing decisions. Buyers will only be ready to make a decision when their specific needs and circumstances align.
Recognising this fact is crucial for those tasked with driving growth. By concentrating only on the 5% who are in-market, you risk losing out on the larger opportunity that lies in the remaining 95% who represent your future customer base.
How the 95-5 Rule Impacts Demand Generation
The 95-5 rule forces businesses to rethink how they approach demand generation. Here’s what it means for your strategy:
- Engaging Future Buyers: The 95% of potential buyers not currently in the market are your future growth. This means your marketing efforts should focus on building relationships and maintaining brand visibility so that when these buyers are ready to purchase, they think of your business first. This is where brand marketing becomes essential—it ensures that your brand stays front-of-mind over the long term.
- Capturing Immediate Demand: While the majority of your market isn’t ready to buy, there’s still the 5% who are. Performance marketing helps you target those actively seeking solutions. Tactics like paid search, retargeting, and account-based marketing (ABM) can help you capture this existing demand.
Balancing both approaches is the key to making sure your marketing efforts deliver value now while also building a pipeline for future growth.
Applying the 95-5 Rule in Demand Generation
To apply the 95-5 rule effectively, you need a dual approach: one that builds brand awareness for the 95% and another that captures immediate demand from the 5%.
1. Long-Term Brand Building (for the 95%)
For the 95% who aren’t ready to buy, the goal is to build familiarity and trust. You need to ensure they know who you are well before they’re ready to make a purchasing decision.
- Content Marketing: Create educational content that addresses broader industry challenges, positioning your brand as an expert rather than focusing on selling. Examples include blog posts, whitepapers, webinars, and social media content that engage and inform your target audience.
- Category Entry Points (CEPs): These are the triggers that prompt a buyer to think about your solution. By identifying and focusing on various CEPs, your marketing will be ready to activate when the buyer enters the market.
- Thought Leadership: Regular contributions to industry debates and discussions help your brand stay relevant and visible. Speaking engagements, podcasts, and publications help to cement your reputation as a trusted voice, ensuring your brand remains top-of-mind when the 95% eventually become in-market buyers.
2. Demand Capture (for the 5%)
For the 5% who are actively looking for solutions, your goal is to capture their attention and convert them into customers. This requires a different set of tactics focused on high-intent buyers.
- Search Engine Marketing (SEM): Paid search campaigns allow you to target buyers actively searching for solutions, ensuring your product or service appears when they need it most.
- Retargeting: For those who visit your site but haven’t converted, retargeting is an effective way to keep your brand in mind, prompting them to return when they’re ready to take the next step.
- Account-Based Marketing (ABM): Personalised marketing campaigns for high-value prospects can increase your chances of converting them. Align your efforts with their specific needs to ensure a higher likelihood of success.
Why the 95-5 Rule Is Essential for Long-Term Growth
The 95-5 rule highlights an essential reality: while immediate sales are important, long-term brand equity is critical for sustainable growth. Focusing solely on the 5% who are ready to buy today means missing out on the 95% who will become your future customers.
A successful demand generation strategy targets both groups. Capture the demand from buyers ready to purchase, while building a pipeline of future customers who will trust your brand when their time comes to buy.
At VictoryWorks, we help businesses create demand generation strategies that balance short-term results with long-term growth. Understanding and applying the 95-5 rule is key to staying competitive in today’s ever-changing market.