The Five Percent Rule and Why it is Critical for B2B Content Marketing

May 3, 2023

How many of your target customers are ready to buy your solution right now?

Many people would say, “all of them.”

How come? Because they only target buyers who have shown that they are ready to purchase—often called “sales qualified leads”.

What’s wrong with that? Sounds like a solid strategy, right?

Not when you learn that only five percent of your buyers fall into that category.

In other words, among your target customers, nineteen out of twenty are not ready to buy.

This has profound implications for successful B2B content marketing.

Let’s explore.


The Five Percent Rule in B2B Content Marketing

The five percent rule states that, on average, only one in twenty members of your target audience will be “in market”, ready to make a purchase, at any given time.

A large majority will be at different stages in the buyer’s journey, including:

·      No current need (perhaps they recently purchased a solution)

·      Evaluating potential need (deciding whether to explore options)

·      Evaluating potential solutions (learning about their alternatives and how to properly compare them)

·      Waiting for a purchasing window (end of current contract, budget cycle, etc.)

The five percent rule has been cited by several different sources—including the Ehrenberg-Bass Institute and the LinkedIn B2B Institute—and is predicated on companies replacing many goods and services on average every five years.

This means that one in five companies will, on average, be looking for a new solution in any given year—or about one in twenty in any given quarter.

While this is clearly an empirical observation rather than a scientific principle and might therefore vary considerably from market to market and over time, based on market conditions, its precision doesn’t matter.

What matters is that a large majority of potential buyers aren’t ready to buy right now.

If your company only targets customers who are ready to buy, you are likely ignoring ninety-five percent of your target audience (or some similarly large percentage).

Let me explain why that matters.


Why the Five Percent Rule Matters

Buyers follow a predictable, albeit non-linear, journey from being entirely disinterested to becoming a customer.

The first stage is called the awareness stage and is where they wake up to the idea that they have a challenge worth solving.

Perhaps they realize that a piece of equipment is no longer serving its intended purpose or that a service provider is no longer meeting the company’s performance standards.

Whatever the situation, before leaping into purchasing something new, the buyer explores the idea and tries to answer the question, “Is this worth my time, effort, and investment?”

If they conclude that it is, the buyer will move into the evaluation stage.

This is where they explore potential solutions and figure out how to compare their options.

They are still not guaranteed to make a purchase, however, since one of their options is to live with the status quo.

Only when they have identified, evaluated, and compared solutions and concluded that one or more is worth purchasing will they move into the selection phase, where a deal can finally happen.

Many companies focus heavily on the selection stage, churning out salesy content and fishing for buyers who are ready to splash some cash.

But what happens to buyers in the awareness and evaluation stages that those companies ignore?

If you don’t win mind share, you might not be in the running for market share

While exploring their challenge and the available solutions, buyers pay attention to companies that provide them with relevant, helpful information.

Those companies gradually earn a special place in the buyer’s mind—something we call mind share.

Buyers entering the selection stage are much more likely to purchase from a company that they have encountered earlier in their journey—especially one about which they have formed a positive opinion.

In other words, mind share translates into market share at the selection stage.

Companies who ignore prospects that aren’t yet ready to make a purchase risk being left out when the purchase decision is eventually made.

If you don’t win mind share, you might not be in the running for market share.


Content for the awareness and evaluation stages should demonstrate transparency and earn the buyer's trust

B2B Content Marketing for the Ninety-Five Percent

Effective content for the awareness stage helps buyers to understand and quantify the challenge they are facing (the situation for which they might eventually purchase a product or service).

This includes examples of other companies facing and tackling the same challenge, as well as calculators for comparing the impact of not solving the challenge to the benefits of implementing a solution.

Effective content for the evaluation stage includes comparison guides to the various products available in the marketplace and tips on what to look for when selecting a solution.

Content for both the awareness and evaluation stages should be product agnostic

Note that this means your content for both the awareness and evaluation stages should be product agnostic.

Salesy material that overtly promotes your solution is premature at these stages and likely to cost you mind share rather than winning the buyer’s attention.

Your goal during these stages is to build trust with the buyer by demonstrating domain expertise, showcasing experience solving their challenge, and exhibiting transparency about when different solutions work best.

This is true even if you end up recommending another company’s solution instead of your own. Imagine how much goodwill that earns you with the buyer, and how likely they are to come back to you when they have a more suitable challenge to solve.

In summary, invest time and effort to produce content that attracts and engages prospective buyers while they are developing their understanding of the challenge and learning about potential solutions.

This will help you earn their trust and build mind share—implanting a short-cut to your company inside their brain that you can activate when they’re ready to make a purchase.


The Hundred Percent Rule – Times Two

Two more rules go hand-in-glove with the five percent rule:

·      One hundred percent of your buyers should continue to receive your attention (and content) after they make a purchase.

·      Content marketing plays an important role across the entire buyer’s journey—so you should be producing content for one hundred percent of your target customers.

The implementation stage of the buyer’s journey follows immediately after they have closed the deal.

At this stage, all they’ve purchased is expected value. Your task is to help them realize that value—and preferably more, so that their expectations are exceeded—with as little friction as possible.

Content for the implementation stage includes how-to guides, help videos, knowledge bases, chatbot scripts, and any other material you can offer that helps a buyer get the most out of the product or service you’ve sold them.

Producing content for all stages of the buyer’s journey—which includes the loyalty stage, in addition to the awareness, evaluation, selection, and implementation stages we’ve already discussed—is key to maximizing your customer relationships, earning their repeat business, growing account value, and tapping into advocacy marketing.

I covered each of these stages in more detail in my recent post on the buyer’s journey.


The Bottom Line

Don’t fall into the trap of focusing exclusively—or even mainly—on buyers who have shown themselves ready to purchase.

For most of them, it’s already too late to win their business.

Instead, pay particular attention to buyers in the awareness and evaluation stages of their buyer’s journey, where product agnostic content will help you earn trust and win mind share.

This will put you in a strong position to win their business once they’re ready to purchase, turning mind share into market share whenever your product or service is the right one to meet their needs.


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