The 95:5 rule is the new 60:40 rule
How does B2B marketing work?
That’s a fun question, but here’s an even more fun question:
How do B2B marketers think marketing works?
What if we were to tell you that: (1) many B2B marketers have a wildly inaccurate understanding of how marketing works, and (2) as a result of that fundamental misunderstanding, many B2B marketers are setting themselves up to fail?
Spoiler alert: that’s what we’re about to tell you!
How marketers think marketing works: The 5:95 rule
Many B2B marketers seem to think that marketing works through persuasion, ‘pushing’ buyers down a funnel by explaining the product benefits. According to our surveys, 95% of B2B marketers expect to see significant sales within the first two weeks of a campaign. And that’s a reasonable expectation, if you believe that ads convince buyers to purchase products.
How marketing actually works: The 95:5 rule
So how does marketing actually work, you ask?
The exact opposite way.
Such is the conclusion of our new research with Professor John Dawes of the Ehrenberg-Bass Institute. According to Dawes, only 5% of B2B buyers are in-market to buy right now. That means 95% of the buyers that you reach are out-of-market and won’t buy for months or even years. And, contrary to popular belief, you cannot persuade the buyer to go in-market because they already have what you’re selling and won’t need a newer version any time soon.
Marketers don’t move buyers in-market – buyers move themselves in-market based on their needs. For example, if an IT manager just purchased a brand new cloud computing solution yesterday, then that need is gone, and there’s nothing a B2B marketer can do to generate an immediate sale.
So what can we do?
Give up? Focus on the 5% who are in-market? Ignore the 95% who aren’t?
No. Marketers should focus on the 95% – the out-of-market buyers.
Effective marketing increases future sales in future buying situations. How? By increasing the probability that the brand comes to mind when the buyer goes in-market. Simply put, the brand that gets remembered is the brand that gets bought. You can’t push buyers down a funnel, but you can, to quote Professor Jenni Romaniuk, “catch buyers as they fall”.
The 95:5 rule is a such a simple observation that Dawes never even bothered to write it down before. But this simple observation has profound implications.
Read the full article in Marketing Week.
