The 95:5 Rule: A guide for Growth Marketers

The 95:5 rule is a marketing principle stating that at any given time, only around 5% of your potential customers are actively looking to buy. The remaining 95% are not currently in the market. This means most of your audience isn't ready to purchase right now, highlighting the importance of long-term brand building rather than focusing solely on immediate sales.

For growth marketers—especially in B2B, where sales cycles are longer—understanding this rule is crucial. It helps you balance short-term lead generation with long-term brand awareness strategies.

Where Did the 95:5 Rule Come From?

The 95:5 rule was popularised by Professor John Dawes from the Ehrenberg-Bass Institute, a leading marketing research centre in Australia. Dawes' research found that most buyers aren't actively seeking to purchase at any given moment. Instead, they move in and out of the market based on changing needs, budgets, and circumstances.

You can read more about the original research in Professor Dawes' article, The 95:5 Rule.

How Is the 95:5 Rule Different From the 80:20 Rule?

At first glance, the 95:5 rule might seem similar to the 80:20 rule (also known as the Pareto Principle). The Pareto Principle states that roughly 80% of outcomes come from 20% of causes—for example, 80% of revenue often comes from 20% of customers.

However, the 95:5 rule specifically addresses buyer readiness and timing, not customer value distribution. It emphasises the importance of brand awareness and nurturing relationships with potential customers who aren't yet ready to buy.

Understanding 'In Market' and 'Out of Market' Buyers

To apply the 95:5 rule effectively, you need to understand two types of buyers:

• In-market buyers: These buyers are actively researching and ready to purchase. They represent roughly 5% of your potential audience at any given time.

• Out-of-market buyers: These buyers aren't currently looking to buy. They may have recently purchased, lack budget, or simply don't have an immediate need. They represent the remaining 95%.

Effective growth marketing strategies must cater to both groups. Short-term tactics can capture in-market buyers, but long-term brand-building activities are essential to stay top-of-mind with the larger out-of-market audience.

Criticisms of the 95:5 Rule

While the 95:5 rule is widely accepted, it isn't without criticism. Some marketers argue the exact percentages vary significantly depending on industry, product type, and market conditions. For example, fast-moving consumer goods (FMCG) typically have more buyers regularly in-market, whereas high-value B2B products may have fewer active buyers at any given time.

Critics also suggest the rule oversimplifies complex buying behaviours. Despite these criticisms, the core principle—that most buyers aren't actively purchasing at any given moment—remains valuable for strategic planning.

What Does the 95:5 Rule Mean for B2B Growth Marketers?

For B2B growth marketers, the 95:5 rule has several important implications:

• Long-term brand building: Invest consistently in brand awareness campaigns to ensure your brand is top-of-mind when buyers eventually enter the market.

• Balanced marketing strategies: Combine short-term lead generation tactics with long-term nurturing and educational content to engage both in-market and out-of-market audiences.

• Measurement and analytics: Track brand awareness and engagement metrics alongside immediate conversion metrics to gain a complete view of marketing effectiveness.

• Content strategy: Create valuable, educational content that positions your brand as a trusted expert, ensuring relevance even when buyers aren't ready to purchase.

For more insights, see this article on leveraging the 95:5 rule to your advantage.

How Growth Method Helps You Apply the 95:5 Rule

Applying the 95:5 rule effectively requires a systematic approach to growth marketing. Growth Method is the only work management platform built specifically for growth marketers, combining ideation, experimentation, and analytics in one centralised platform.

• Ideation: Our intuitive ideation system ensures your marketing ideas align with long-term brand-building goals. Ideas are automatically categorised, prioritised, and shared with your team for feedback.

• Experimentation: Growth Method helps you rapidly test and iterate marketing strategies. Experiments move through clear stages—building, live, analysing, and complete—to increase velocity and learning.

• Reporting: Our industry-leading reporting integrates seamlessly with analytics platforms like Google Analytics, Amplitude, and MixPanel, providing clear insights into brand awareness and conversion metrics. Impress stakeholders with professional, detailed reports that clearly demonstrate your team's value.

"We are on-track to deliver a 43% increase in inbound leads this year. There is no doubt the adoption of Growth Method is the primary driver behind these results." Laura Perrott, Colt Technology Services

Conclusion

The 95:5 rule is a powerful concept for growth marketers, highlighting the importance of long-term brand awareness alongside immediate sales tactics. By understanding and applying this rule, marketers can build sustainable growth strategies that effectively engage both in-market and out-of-market buyers.

Growth Method simplifies this process, providing everything you need to run an effective growth marketing function in one place. Ready to see how Growth Method can help your team implement the 95:5 rule? Book a call today.