Reach is growing, but enquiries are not. Or performance campaigns used to bring sales, but each new enquiry costs more and more. Often there is a single cause: the business only talks to people who are ready to buy right now. The 95/5 rule in marketing explains why that is not enough and where sustainable growth comes from.
Where the 95/5 ratio comes from
The idea was formulated by researchers at the B2B Institute, LinkedIn’s think tank, together with scientists from the Ehrenberg-Bass Institute. Their conclusion: at any given moment, only about 5% of potential customers are actively looking for a supplier. The remaining 95% are not choosing anything right now, but over time some of them will also come to buy.
The model originally described B2B markets with long deal cycles, but its logic applies to many categories where people buy infrequently: appliances, furniture, cars, insurance, education, B2B services.
- A small “hot” part of the market is already comparing options and is ready to pay.
- A large “cold” part is not searching yet, but is forming attitudes towards brands that will shape its choice later.
The danger of focusing only on quick sales
If all the money goes on “buy now” advertising, the company competes for a small segment alongside all its competitors. The cost per contact rises, and most future buyers never hear of the brand. When these people develop a need, they will remember those who kept reminding them of themselves all along.
That is why companies that think several years ahead invest in three things:
- awareness, so the brand is known before it is needed;
- emotional connection, so people feel warmly towards it;
- regular presence, so competitors do not push it out of memory.
The winner is not the loudest, but the one people think of first when demand appears.
How to build the rule into your strategy
Split the budget between two tasks
One part works on making the brand memorable, the other on capturing existing demand. Display advertising may not produce a click today, but the person has seen the brand, understood how it is useful and will come back when the time comes. The exact ratio depends on the category, the length of the purchase cycle and the business’s stage of development, and it should be tailored rather than copied from someone else.
Get onto the shortlist
When a need arises, buyers usually recall only a handful of brands. If you are not among them, you have lost before prices are even compared. To secure your place on that list:
- define your brand platform and stick to it;
- use display formats and video;
- maintain a single, recognisable visual style across all channels.
Work towards the future choice
Marketing to a “cold” audience is not about persuasion, but about influencing a decision the person will make months from now. Useful content and consistency help your name come up first at the right moment.
What this means for the Tajik market
The rule is relevant both for local companies and for international brands operating in the country. The market here is compact, and competition for attention is high: the same people see advertising from many players. Working only with the hot segment means constantly fighting over a small group of buyers.
A sensible model is a flexible strategy: ongoing work on awareness plus performance campaigns at moments when demand rises, for example in season or during promotions. To learn how the measurable part of this combination works, read our article on performance marketing and how it differs from conventional advertising.
The bottom line
The 95/5 rule is not a fashionable theory but a practical guide. If a brand talks only to the 5% who are ready to buy today, it misses almost the entire market of tomorrow’s customers. A media strategy will help you strike a balance between long-term growth and current sales; SKY Central Asia develops one as part of its strategy practice.
Leave a comment