Understanding the 95:5 Rule: A Paradigm Shift in Marketing
Audio-Blog Player. Select gear icon to change playback speed.
What Most Businesses Overlook
Picture the bustling world of small businesses—cafés, boutiques, local gyms. Each one hustles to grab attention, vying for the fleeting chance to win over a customer today. But here’s a truth that few pause to consider: most of your audience isn’t buying today—not because they don’t care, but because the timing simply isn’t right.
This is where the 95:5 Rule reshapes everything. It’s not about chasing the quick sale or the instant conversion. Instead, it’s a shift in perspective—a focus on staying visible and relevant to the majority of your potential customers, even when they aren’t actively in the market. Why? Because one day, they will be.
Did You Know?
The 95:5 Rule, while popularized by Professor John Dawes from the Ehrenberg-Bass Institute in recent years, has roots in older marketing concepts. Marketing experts have recognized for decades that only a small percentage of potential customers are ready to buy at any given time, with some discussing similar ideas as far back as 25 years ago!
The 95:5 Rule: A Quietly Transformative Idea
At any moment, only 5% of your potential audience is actively searching for what you offer. The remaining 95%? They’re out-of-market—not ignoring you, just not ready yet. And it’s this majority that holds the key to long-term success.
Tending to these 95% is like nurturing seeds beneath the soil. They may not bloom today or even tomorrow, but with consistent care—providing value, building trust—you position yourself as their first choice when the time comes.
This isn’t just an idealistic notion; it’s backed by research. The Ehrenberg-Bass Institute, a global leader in marketing science, emphasizes the importance of brand awareness for future sales. They’ve shown that when buyers finally enter the market, they gravitate toward brands they already know. And who do they know? The ones that stayed visible and relevant.
Why Most Businesses Get It Wrong
Here’s where businesses stumble: many funnel their efforts into flashy, immediate sales tactics—“Act Now!” discounts and one-time offers. These campaigns may capture attention from the 5%, but they often alienate the 95%. It’s the equivalent of harvesting fruit while ignoring the need to water the trees.
And here’s the thing: those overlooked trees will bear fruit—but only for brands that cared for them all along. The businesses that consistently showed up, even when there was no obvious reward, reap the benefits when their audience is ready to act.
Does the 95:5 Rule Ever Shift?
While the 95:5 Rule provides a valuable framework, it’s not set in stone. Several factors can nudge the percentages:
- Seasonality: Industries like retail or hospitality see spikes in active buyers during holidays or vacation seasons. For example, in December, the ratio might shift to 80:20 for gift shops as holiday shoppers rush in.
- Product Type: High-frequency purchases like groceries or everyday essentials naturally have a larger share of in-market buyers compared to big-ticket items like cars or home renovations, where the 95:5 balance holds steady.
- Pricing: Luxury brands often operate in a world where their “95%” remains aspirational, waiting for the right moment to buy. Meanwhile, budget-focused brands might experience a higher in-market percentage due to lower financial barriers.
These nuances emphasize the importance of tailoring strategies—not abandoning the 95:5 framework, but adjusting its application based on your business context.
The Real Power of the 95:5 Rule
When you focus on building relationships with the 95%, you’re not just marketing; you’re planting the idea that your brand is a trusted resource, a reliable guide, and the obvious choice when the time is right.
Consider this: a local bookstore, nestled in a neighborhood, could easily try to compete on price or convenience with online giants. Instead, they host book clubs, offer personalized recommendations, and engage their audience with weekly staff picks. Over time, they’ve not just sold books—they’ve created a loyal community. And when those readers think about their next purchase, they’re not typing “Amazon” into their search bar; they’re heading to that bookstore.
What Can You Do Today?
Shifting your mindset to the 95:5 Rule doesn’t mean ignoring the 5% who are ready to buy. It’s about balance—serving immediate needs while laying the groundwork for future success.
Here’s where to start:
Engage with Storytelling: Share what makes your brand unique—your mission, your challenges, your wins. People connect with stories, not just products.
Provide Value Without a Sales Pitch: Create content that informs, entertains, or inspires. If you’re a fitness studio, offer quick tips for better workouts or recipes for post-gym meals.
Stay Consistent Across Channels: Whether it’s social media, emails, or local events, make your presence felt. Familiarity builds trust.
Long-Term Wins, Not Just Short-Term Gains
The 95:5 Rule isn’t about flipping your strategy overnight. It’s about playing the long game—about being there for your audience consistently and authentically, so when their needs change, you’re not just an option; you’re the first choice.
And here’s the most important takeaway: the seeds you nurture today will become the harvest of tomorrow. What are you planting?
