Marketing when your customers are not in the market

While attending Advertising Week in New York in the fall of 2023, there were some key insights presented that is valuable. The discussions shed light on key considerations for B2B companies, particularly emphasizing the 95/5 rule coined by LinkedIn’s B2B Institute. This rule highlights the importance of brand building and education, even when your audience isn't actively seeking your product or service.

The 95/5 Rule

At the heart of the discussion was the 95/5 rule, a principle that urges B2B startups to recognize that 95% of the time, their target audience is not actively in the market for their offerings. This insight challenges conventional marketing strategies and calls for a nuanced approach that extends beyond the typical product-focused campaigns. Businesses are advised to focus their advertising efforts not just on the immediate buyers but on the broader audience that may not be ready to make a purchase today.

At the core of the 95-5 Rule is the concept of "in-market/out-market," a shift that not only prioritizes the customer but also aligns closely with financial considerations. Unlike the traditional funnel that often categorizes buyers into stages, the in-market/out-market paradigm is both customer-centric and finance-centric. It encourages businesses to think in terms of current and future cash flows, mirroring the perspective of CFOs when evaluating sales performance.

The unconventional approach of reaching out to the 95% of the audience that isn't actively looking to buy in the short-term does not seem obvious to some business leaders. From a financial perspective, this strategy can be justified because by investing heavily in brand advertising that resonates with the out-market buyers, businesses are essentially investing in future cash flows. This forward-thinking strategy aligns with the financial principles that underpin the stock price of every public company.

Visualizing this as a “flipped funnel” in action provides a clearer understanding of how effective it can be. While it's key to allocate resources towards lead-generation efforts targeting the 5% of people who are actively in-market today, the magic happens when you invest more substantially in reaching the entire category through compelling brand advertising. This broader approach not only establishes brand presence but also creates resonance with future buyers, setting the stage for sustained growth and future cash flows.

Building Brand Awareness

Brand awareness and education are key components of B2B marketing strategies. Understanding that the majority of the year is spent outside the active purchasing window, startups are encouraged to invest in campaigns that foster brand affinity. This is particularly relevant for the awareness and education stages of the buyer's journey, helping to position the brand favorably when the time for active purchasing arrives.

Adapting to Longer Buying Cycles

The ongoing global challenges, including the pandemic and economic uncertainties, have introduced new considerations for B2B startups. This may lead to longer buying cycles, shifting the emphasis on continuous brand-building efforts. In a world where 99% of the time is spent nurturing brand awareness and affinity, companies must be agile in adapting their marketing and PR strategies to align with evolving market conditions.

Strategic PR and Marketing

Acknowledging the 5% of the time when active purchasing decisions are made, startups are urged to synchronize their PR and marketing strategies for impactful announcements. While the launch of new products or services calls for a bold and attention-grabbing campaign, the majority of the year can see a more nuanced, educational approach. By aligning campaigns with the flow of buyer behavior, businesses can maximize their impact and resonate with their audience.

What do B2B brands need to know now?

As the B2B landscape evolves, so must our approach to marketing and brand building. These insights highlight the importance of understanding the 95/5 rule and adapting strategies to the realities of longer buying cycles. By prioritizing brand awareness and education, B2B startups can create a lasting impact, ensuring their brand remains at the forefront when the time for active purchasing eventually arrives. Flexibility and strategic planning are key to navigating the complexities of the B2B journey today.

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