Ehrenberg-Bass: 95% of B2B buyers are not in the market for your products
The vast majority of B2B marketing messages could be falling on deaf ears, with up to 95% of businesses not in the market for most goods and services at any one time.
This deceptively simple fact has a profound implication, according to the Ehrenberg-Bass Institute’s Professor John Dawes, author of the latest instalment of a major new study carried out for the LinkedIn B2B Institute.
According to the report, companies change their providers of services such as banking, legal advice, software or telecoms around every five years. This means that only 20% are in the market for those services in a given year and just 5% in a given quarter. The other 95% are not in the market at all.
“If I’m chasing clients in commercial banking then it’s useful to realise that in any given year only one in 10 of them will be looking to appoint a new bank or switch their lead bank. In a quarter or a month, it’s a tiny proportion,” says Dawes. “The cycle happens over quite a number of years.”
Global head of the LinkedIn B2B Institute, Jann Martin Schwarz agrees that the power this insight is not that it’s a complicated proposition, but a far-reaching one.
“It is the case that a lot of companies haven’t fully realised yet that most people are not in the market for any product at any given time. You need to target them with a long-term lens,” says Schwarz.
There aren’t that many business clients that will say ‘You know what, I’m comfortable signing a contract with a company that I’ve hardly ever heard of before.’
Professor John Dawes, Ehrenberg-Bass Institute
This insight relates not just to targeting marketing messages more effectively, but also to broader strategies. Dawes says the report’s findings prove that advertising mainly works by building and refreshing memory links to a brand – rather than by directly driving sales. This means when customers are in the market they remember brands which have advertised effectively in the past, and usually over a long period.
Read the full article in Marketing Week.