The 95:5 Rule: Why B2B Growth Starts Long Before the Purchase

The conventional wisdom of B2B marketing often hinges on capturing immediate demand: the right message, the right time, the right lead.

However, research shows we may be placing our focus in the wrong place.

Professor John Dawes, of the Ehrenberg-Bass Institute, is challenging the status quo with the simple yet transformative idea that 95% of your potential buyers aren’t in the market right now.

This concept, dubbed the 95:5 Rule, elucidates that only about 5% of your target customers are actively looking to buy at any given time. The remaining 95%, while present, are not yet ready to buy.

Consequently, a marketing strategy solely focused on immediate demand risks overlooking the growth opportunities inherent in this larger, yet dormant, segment.

In this article, we’ll break down all the takeaways from John’s discussion on the Attributed Podcast.

The problem: The “now” obsession in B2B marketing

Marketing teams are under constant pressure to generate leads that immediately convert.

This environment fosters an over-reliance on bottom-funnel tactics (paid search, retargeting, and aggressive sales outreach), all directed at the limited 5% of buyers currently in-market.

This 'now' obsession presents a significant challenge: if you only market to buyers when they’re ready to purchase, you’re competing in an uphill battle.

Every competitor is fighting for the same limited pool of prospects, driving up acquisition costs and reducing differentiation. Worse, if a potential buyer has never heard of your brand before their buying process begins, your chances of making a sale are slim to none.

The solution: Build brand memory before the buying window opens

The solution to navigating this is proactively building brand memory before the window of active purchasing opens.

According to John, B2B brands should invest in reaching all potential buyers long before they enter the market. Instead of focusing solely on capturing demand, companies should create it by building familiarity, trust, and top-of-mind awareness among that crucial 95%.

How to market for the 95%

So, how do you apply the 95:5 Rule in practice? Here are four ways:

1. Stop measuring marketing by immediate sales results

One of the biggest mistakes marketers make is judging their ad spend by how much revenue it generates in the short term.

But as John points out, that’s fundamentally flawed. If only 5% of buyers are actively looking, then 95% of your marketing efforts will have a delayed impact.

If sales can’t be the only metric for evaluating marketing effectiveness, then what should B2B marketers measure? According to John, brand awareness and mental availability are critical indicators of future sales growth.

If there are potential buyers out there who basically know nothing about us they have almost zero chance of buying from us.

Brand health metrics such as unaided brand recall, category entry points, and distinctive brand assets should be continuously monitored.

Additionally, tracking the percentage of total potential buyers reached over time gives insight into whether your marketing is setting you up for future success.

Read the full article in Dreamdata.