The 95-5 rule: most of your buyers are not buying

Origin

John Dawes at the Ehrenberg-Bass Institute wrote the paper for the LinkedIn B2B Institute in 2021 under the title Advertising Effectiveness and the 95-5 Rule: Most B2B Buyers Are Not In the Market (Right Now) [1]. The problem it addressed was a quiet one. B2B marketing had organised itself around the buyer who is actively looking, and had largely stopped asking what everyone else was doing.

The reasoning is arithmetic rather than measurement. Take a category where a firm buys once every five years, which is ordinary for a vehicle fleet, an enterprise system or a bank. One in five firms buys in any given year. One in twenty buys in any given quarter. The rest are out of market, and will stay out until their own cycle brings them back.

Dawes put it plainly: the rule is “a heuristic, not a fixed law” [1]. That caveat has been dropped by most people who quote the number since, and it should be put back.

What the evidence shows

Three bodies of work support the argument, and none of them is the 95-5 paper itself, which is a derivation.

Purchase cycles are long and buyers are mostly dormant. The Ehrenberg-Bass panel work across categories shows that buying is infrequent for most buyers of most brands, and that a large share of any brand’s buyers in a given year did not buy it the year before [2]. The 95-5 figure is a way of stating that for B2B, where the cycles are longer still.

Brand building outperforms activation over any horizon longer than a few months. Binet and Field’s analysis of the IPA Databank found that campaigns which built brand produced larger business effects than campaigns optimised for short-term response, and that the gap widened with time [3]. Their B2B follow-up for the LinkedIn B2B Institute found the same shape in business markets, with the additional observation that B2B spend was skewed hard towards activation [4].

Communication aimed only at buyers ready to act is addressing a twentieth of the opportunity, and competing hardest for the most contested twentieth.

Source: Dawes, J., Ehrenberg-Bass Institute for the LinkedIn B2B Institute, 2021. A derived heuristic, not a survey result. Brave New Media, 2026.

Memory, not persuasion, decides most purchases. When the 5 per cent do come into market, they do not start from nothing. They start from a shortlist held in memory, assembled during the long period when they were not looking. Romaniuk’s work on mental availability describes this as the brand being thought of in a buying situation, and shows that the brands with the most category-entry-point associations are the ones that get bought [5].

Put the three together. Most buyers are not buying. Spend aimed only at the ones who are reaches a sliver. Spend that builds memory among the rest is what determines who is on the shortlist when the sliver changes.

The challenge

The strongest objection is the one Dawes made himself: the number is derived, not observed. Nobody surveyed a population of B2B buyers and found 5 per cent in market. The figure falls out of an assumed purchase cycle, and the cycle varies enormously by category. A firm that renews a software contract every year has a very different in-market share from one that replaces a fleet every seven. The rule is right in shape and approximate in magnitude, and anyone quoting it to two decimal places has not read the paper.

The second objection is commercial. Performance marketers point out that the 5 per cent is where the revenue is this quarter, that it is measurable, and that a board does not pay bonuses on memory structures. That is true, and it is why the skew exists. The counter is not that activation does not work. It is that activation harvests a shortlist it did not plant, and that a brand which only harvests will find the shortlist thinning.

The literature is not split on whether long-term brand effects exist. It is split on the right ratio of spend, and Binet and Field’s own recommended split for B2B, which they put at roughly 46 per cent brand to 54 per cent activation, is a finding from the IPA Databank rather than a universal law [4]. Treat it as a starting point for a category, not a budget line to copy.

Where I see this go wrong

The budget is read off the funnel. The funnel describes the 5 per cent. A marketing plan built entirely from it will be a plan for the 5 per cent, with the 95 per cent appearing nowhere because they do not appear in a pipeline report. I see this in most B2B plans I am shown, and it is not a failure of intelligence. It is what the reporting tools make visible.

The 95 per cent are treated as a nurture list. Someone recognises the problem and the response is an email sequence. But the 95 per cent are not leads. Most of them have never heard of you, and the ones who have are not reading. What reaches them is advertising in the ordinary sense, repeated, recognisable, and uninterested in whether they click.

The rule is quoted as a measurement. It gets into decks as “95 per cent of your buyers are not in market”, with no author, no caveat and no category. It then gets argued with by someone who knows their category’s cycle is two years, and the whole idea is dismissed with the number. Quote Dawes, say it is a heuristic, and give your own category’s arithmetic instead.

I spent eight years in television, media and investment before I ran an agency, and television is the industry that understood this first. Nobody buying a car tonight saw the advertisement for the first time tonight. The advertisement was for the version of them that would buy in three years. B2B is only now relearning what broadcast knew in 1970.

What to do with it

1. Work out your own in-market share from your own purchase cycle. If buyers renew every three years, roughly 8 per cent are in market in any quarter. Write the number down and use it instead of 95-5.
2. Split the plan in two, on paper, with separate objectives. One half for the buyers in market: capture, convert, measure by pipeline. One half for the buyers who are not: reach, repetition, measure by recall and recognition.
3. Fund the second half even when it cannot be attributed. If you require every pound to show a lead within the quarter, you have decided to market only to the 5 per cent, and you should say so rather than drift into it.
4. Build for memory, which means distinctive assets, consistency, and messages tied to the moments buyers enter the category. See Distinctive brand assets and Mental availability and physical availability.
5. Stop measuring the long half with the short half’s instruments. Click-through on a brand campaign tells you almost nothing. Unprompted recall in the category tells you most of it.
6. Review the ratio annually against Binet and Field’s B2B findings [4], then set your own. Their 46-54 is evidence from a databank, not a rule for your firm.
7. When the 5 per cent arrive and you are on the shortlist, notice that the memory did it. The activation spend will claim the credit. Keep a record so the next budget round is honest.

If you run the company rather than the marketing

The decision this governs is the one about whether marketing spend that cannot be attributed to a sale this quarter is waste.

The honest answer is that some of it is, and the rest of it is the only reason you have a pipeline at all. The buyers who convert this quarter put you on their shortlist during months when they were not buying and you were not measuring them. If the spend that reached them in those months is cut because it showed no return, the shortlist empties on a delay of a year or two, and by the time the pipeline shows it the cause is forgotten.

Ask marketing for two numbers rather than one. What share of our buyers is in market this quarter, from our own purchase cycle, and what share of the budget is addressed to the rest. If the second number is near zero, you are running a business on a shortlist you stopped maintaining.

That is not an argument for spending more. It is an argument for knowing which half of the budget does which job, so that when a cut comes it is made on purpose.