The 95/5 Rule: A Better Way to Think About B2B Marketing

Why Most of Your Market Isn't Ready to Buy (and What to Do About It)

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Here’s a reality that most B2B startups get wrong: at any given time, about 95% of your potential buyers aren’t actively looking to buy. They won’t be swayed by clever marketing or sales pitches because they simply aren’t in the market right now.

This is the 95/5 Rule, a principle developed by Professor John Dawes at the Ehrenberg-Bass Institute, that should fundamentally reshape how you think about B2B marketing.

Understanding the 95/5 Rule

The 95/5 Rule captures a fundamental truth about B2B buying: Most of your potential customers aren’t actively looking to buy at any given time. While the exact numbers vary by category, typically:

• Only about 5% of potential buyers are actively evaluating solutions

• The other 95% are “out-of-market” but will become buyers sometime in the future

• You can’t artificially accelerate when buyers enter the market—they do so based on their own needs and timing

Let’s look at how to apply this rule to your business.

How to Calculate Your Market’s Numbers

There are two key metrics to understand your market’s buying patterns:

1. Annual Purchase Rate

This tells you how many customers will buy in a year. For example:

• If companies change providers every 4 years on average

• Then roughly 25% of your total market will purchase over a year

• This means about 6% are actively buying in any given quarter

This annual metric helps set realistic growth targets and pipeline goals.

2. In-Market Percentage

This shows how many buyers are actively evaluating solutions right now:

% In-Market = (Decision Window ÷ Inter-Purchase Period) × 100

For example:

• Inter-Purchase Period: 48 months (4 years between vendor changes)

• Decision Window: 3 months (typical evaluation period)

• Calculation: (3 ÷ 48) × 100 = 6.25% in-market at any time

The key insight isn’t the exact percentage—it’s understanding that marketing must serve two distinct audiences:

1. The smaller percentage who are actively buying now

2. The much larger percentage who will buy in the future

Want to go deeper on this? Dale W. Harrison talks a lot about this on LinkedIn. Here’s an image from one of his posts:

How This Impacts B2B Marketing Strategy

This reality fundamentally reshapes how B2B marketing should work:

1. Traditional Funnel Thinking Is Obsolete

You can’t reliably “move” prospects through awareness to purchase. Buyers enter the market when they have a need, not when your marketing reaches them. The goal is to be remembered when they naturally enter the market.

2. Brand Building Becomes Critical

The brand most easily remembered when buyers enter the market often wins. Success comes from building memory links that activate when buyers eventually need your solution.

3. Growth Takes Time

There’s a natural ceiling on how many buyers you can acquire in any period. Sustainable growth requires playing the long game, i.e., today’s brand building creates tomorrow’s pipeline.

How to Apply This at Your Startup

Here’s a simple framework for implementing the 95/5 Rule:

1. Balance Both Types of Marketing Activities

Demand Capture (targeting the 5%)

• Target audience: Customers currently searching for a solution you offer

• Focus: Informing potential customers of solution benefits and differentiation to create consideration

• Success metrics: Leads, pipeline, and closed won revenue

• Example activities: SEO, Paid Search, Outbound sales

Demand Creation (targeting the 95%)

• Target audience: Customers who ARE NOT yet searching for a solution you offer

• Focus: Generating awareness and affinity for your category, brand, and/or product/service

• Success metrics: NOT leads. Instead, measure success with initiative-specific KPIs (Ex. ICP social impressions, podcast downloads, etc.)

• Example activities: Community, speaking engagements, organic LinkedIn, podcast, direct mail

2. Build Effective Memory Links

The key is creating associations between your brand and the triggers that cause buyers to enter the market:

• Identify the top pain points that typically cause buyers to seek solutions like yours.

• Create content explicitly addressing these trigger points.

• Maintain a consistent presence in the channels where your audience spends time.

• Focus on building brand awareness with buyers before they actively enter the market.

Real-world example: Matt Lerner shared a story about a clever locksmith in San Francisco who placed stickers next to locked gates leading into apartment building courtyards that said “24-hour locksmith service” with his name and number. Instead of wasting money on generic billboards or ads, he positioned his message at the exact moment and location where someone would need his service. This is an excellent illustration of building memory links that activate when buyers enter the market.

The most effective B2B marketing applies this same principle: Directly associate your brand with the triggers that cause people to enter the market for your solution.

3. Set Realistic Expectations

When planning your marketing approach with the 95/5 Rule in mind, it’s crucial to set realistic expectations:

• Understand your market ceiling: A single campaign can only influence the buyers in the market at that moment. If only 6% of your market buys quarterly, your immediate growth goals should reflect this reality.

• Focus on account progression: Rather than fixating solely on lead counts, track how accounts move through awareness, interest, consideration, and selection stages. As Kyle Poyar notes in his unified GTM metrics article, what matters is “ultimately reaching the right people and turning them into customers.”

• Balance short- and long-term metrics: Track immediate conversion metrics for demand capture (5%). For demand creation (95%), measure brand awareness and engagement over time, recognizing that these efforts build tomorrow’s pipeline.

The locksmith example I mentioned illustrates this perfectly. He didn’t try to accelerate when customers entered the market. Instead, he positioned his message to be there precisely when buyers naturally developed a need.

Implementing the 95/5 Rule: A Simple Framework

To put this into practice:

1. Calculate your market’s numbers:

   • What’s your category’s typical purchase cycle?

   • How long is the average buying process?

   • What percentage is likely in-market now?

   • Example: If your typical purchase cycle is 4 years and the buying process takes 3 months, approximately 6.25% of your market is in buying mode at any time

2. Audit your current marketing mix:

   • What portion targets active buyers vs. future buyers?

   • Are you building lasting memory links?

   • Where are the gaps in your approach?

3. Adjust your strategy:

   • Rebalance resources between demand capture/creation

   • Update success metrics to reflect both strategies

   • Build processes to maintain a consistent presence

   • Establish baseline metrics to track improvement over time

The Bottom Line

The 95/5 Rule isn’t just theory. It’s how B2B markets work. While investing heavily in reaching buyers who won’t purchase for years might seem counterintuitive, that’s exactly what successful B2B brands do.

Your job isn’t to “create demand.” It’s to ensure your brand comes to mind when buyers naturally enter the market. Start building those memory links now, and you’ll create a sustainable engine for long-term growth.