Only 5% of your market are ready to buy

It might seem like a worrying thought: in the world of B2B marketing, only 5% of your potential audience are in market. The rest might not be ready for months, or even years, and most of the time they might not even know who you are.

But rather than being a challenge to overcome, this knowledge could actually open up more opportunities, as Andrea Linehan, CMO of Zai, shared with us on a recent appearance on the CMO Diaries podcast.

Now available in written form below for you to enjoy!

What does the 95:5 ratio mean in B2B marketing?

Hi, Andrea. Welcome back to CMO diaries. We're talking about the 95:5 ratio in B2B marketing.

Basically, it's a way of re-thinking how we talk about prospects, how we talk about who our marketing’s aimed at, and how we set long-term marketing goals. So, before we get into that, let's define the 95:5 ratio.

I might start off with how this is incredibly topical for me and my team at the moment. We've recently gone through a major merger, and I actually spent a few weeks in Australia before Christmas, meeting with the team just to get to grips with the market there.

We really wanted to start work on the 2022 strategy for us to expand into multiple markets with a pretty ambitious and aggressive expansion plan. So, I really had to think about how we were going to really hit the ground running and be as effective as possible with the budget that we had. I was doing research, just to understand what the market dynamics are at the moment.

What had COVID done to behavior and intent? And, with people working from home, what did that mean from capturing data? What’s changed that we need to address in our strategy? We've all heard about that 60:40 rule, and we're all gonna live by it. But I was quite shocked to come across a superb article by Peter Weinberg, and John Lombardo, who wrote about the 95:5 route.

It states that 95% of your buyers are not ‘in market,’ meaning that they're not out there searching for your product or solution. This is because they just haven't either been made aware of the pain point that they have, or they're not even sure that it's a pain. Or they've just accepted that there isn't a solution out there.

So, we go to our boards and leadership teams, and we say, “Look, here's the size of the market, we've sized the market, here's the opportunities, but actually, there's only 5% of that market that is willing to have a very active conversation with you right now.”

Now, obviously, this is very specific to B2B. And, in particular, I think it's more prevalent for those higher-value projects and more strategic projects, but it was a major eye-opener. And I know you and I have chatted a bit about this, because you came across similar research, but we're just in a slightly different metric.

There are a few different sources state that 97% of your prospects aren't ready to buy. But, at the end of the day, what it is is that the vast majority of your prospects and target audience aren't ready to buy. That's going to take a real rethinking of how you target your marketing.

A lot of B2B marketers focus on pushing people through the funnel, when, in actual fact, the vast majority of the audience is not ready to even enter the funnel, to begin with. The funnel’s not even on their radar. It requires a bit of rethinking about where you're focusing your marketing and where you're targeting your marketing.

The advice that we've gotten from these articles and from this research is that you need to focus on the majority rather than minority. That small percentage already knows who you are. They're pretty much sales-qualified at that point. The focus is on building your reputation as opposed to building your presence. Put yourself ‘top of mind’ among a large chunk of people. They're not ready to buy, but they could be raised in their mind in the future.

Exactly. It's about nurturing all of those ‘out of market' buyers before they move ‘in market.’ You don’t want to wait for them to get to that awareness stage all on their own. We’ve got to be thinking about impacting future sales in future buying situations. The only way to increase the probability of that is to make sure that your reputation, your brand, and your expertise comes to mind immediately the moment that buyer goes in market.

Actually, there are two very different approaches that would be required. You want to nurture those out of market buyers, but at the same time, you want to nurture your in-market buyers.

Just because they're in the market, doesn't mean that they're going to automatically buy from you. There's still a mountain of work to go through with getting shortlisted in the first place and then ultimately winning the contract. I've split those up into account-based marketing and inbound marketing. When you're looking at both of those strategies, account-based marketing is far more effective for that 5% of in-market buyers.

But then, for everybody else, that's where the good old inbound marketing strategy comes into play. It is all about thought leadership and reputation and developing awareness around problems and pain points. It's a much longer tail approach.

But what you really want to focus on is how to get both of those strategies working in tandem. It’s gonna need resources, budget and people in order to keep both of those strategies going at the same time. But ultimately, it is a really smart combination.

ABM for the short-term, what about the long-term?

Definitely. Because with ABM, you're sort of looking at the immediate needs of people who are ready for your product right there. Whereas, with the inbound marketing approach, with this targeting of the 95 percentile, you're planting seeds. You're thinking about the long term development for the company, and you're setting up sales prospects that might not happen for months or even years.

But it means that when they do become ready to be your customers, you'll be the first person they think of. That's the ultimate goal. Are you thinking of years-long sales cycles, or are you setting things up for a few months in advance?

It has to be both, right? We're working off quarterly and annual targets, really aggressive ones. If you don't set the foundation for the following year, you're just going to spend every single year chasing your tail, trying to meet short term targets all the time. And that's just not scalable.

That's what leads to burnout. That's what leads to exhausting budgets and not getting any kind of feasible return on investment for what you're doing with your marketing budget. They'll always both be alive.

I think it'll really depend on how the inbound marketing strategy starts to mature, as we start to see a natural flow of business coming through. It’ll probably take 12 to 18 months to really start to see some return on that. And we’ll only know then, once that return is coming in, how much we can pull it back on our ABM approach.

It's a little bit of a ‘wait and see.’ Having both strategies underway at the same time means that we've diversified our approach enough that if for any reason one isn't successful, we do have the other. You should never put all your eggs in one basket. You and I both know, as well as all your marketing listeners, this is incredibly complex. There are so many strings that need to be pulled and such an orchestration of effort into making even one of those strategies successful. So, having two of them going in tandem, that’s going to be even more of a challenge.

Orchestration is definitely the right word. Having these two strategies running in tandem is going to be difficult for the marketing department to get their heads around. But, you've also got to get aligned with other departments as well.

Selling long-term goals internally

A lot of our readers are thinking, “Oh my god, they want us to go to our CROs. They want us to go to the heads of sales and tell them to take the foot off the gas, or off lead gen for a little bit, we're gonna focus on stuff that might not even happen for years and years.” While the CRO is saying, “No, no, we need those leads now!” Was that something that you had to get over with setting up this approach? Or was it a natural way of moving into things?

Well, one of the ways I had to sell this internally was actually referred to as ‘account-based experience.’ Now, this is not something I coined, and I can't think of the guy's name who used it for something recently. It's about the evolution of ABM to a commonplace experience. Because actually, for that to be a really effective strategy that really builds business value, it needs everybody who's involved in the customer journey to be wholly aligned on it.

It has to be cradle-to-grave planning, or, if you're so lucky, cradle to infinity planning. The problem with ABM is that it has marketing in the name. So, then it's the marketing people's job. If you remove the word marketing, and put it in an experience, it then becomes a much more inclusive strategy. What we're doing at Zai is exactly that.

I'm very fortunate in that we've got a super sales, account management, and customer experience team. They're innovative. They're very excited about ways to do it and about the cooperation. So, I'm pushing an open door anyway. I know that's not always the case in a lot of companies. But I prepared in case there was any pushback on the ABM approach to just, well, rebrand, and do what we do best as marketers, positioning something based on what we know.

If you don't mind, we're going to shamelessly plug our other show, because we did actually discuss ABX on that. If anyone's interested in account-based experience, check out the ‘Forget ABM, you should be thinking about ABX’ episode with John Miller on CMO Convo.

That's where I actually picked it up.

ABM and inbound marketing working in tandem

Let's go back to the practicalities of setting up these two approaches working in tandem. How do they work in tandem? You talked about having the long term inbound marketing feeding into the ABM. Do you have a system in place? Or is that something that will happen later?

No, we have a very robust system in place thanks to HubSpot. I am a major evangelist of HubSpot and the capabilities that it gives us. We’re able to run both of those strategies congruently using HubSpot. We're integrated into Salesforce, and, thankfully, we’ve got an all-singing, all-dancing marketing technology set up.

This just allows us to do it in a very scalable, automatable way. If we weren't able to automate and be really process-oriented in how we run both those strategies, it wouldn't be feasible. We would just be running around like headless chickens. We do everything with a very organized, project management approach.

And then we have everything running through HubSpot. It just allows for me, in particular, to be able to just take an eagle view approach on both of those strategies as they are happening, while the teams feel that they can easily skim in and out of both strategies and know some of the efforts that are being put into one strategy or complementing the other.

They’re trying to, wherever possible, to make sure that we're getting a bang for our buck, because that's how we’re going to make our budget work for us. A marketing's team's budget can oftentimes be finite. You’ve got to make sure that you can get as much bang for your dollar as possible.

Let's talk about resources. This kind of approach would require for a lot of B2B organizations, a bit of reallocation of where their resources are going. What types of inbound marketing are you focusing on? You mentioned thought leadership. What does that look like? Is it blog pieces? Is it your standard content marketing, where you're doing more demos, or a more creative approach?

Yeah, absolutely. Everyone on the team, whether it’s content marketing, the design team, the digital team, the acquisition team, everybody is looking at their specialty and their expertise and thinking about what ABM means for their particular area.

There are tactics for around design, for instance, that you can use. Our senior designer has already put a strategy together on how he can use ABM-based experience. How he can use it through design, so we're really taking the strategy and going all the way with this.

That then is informing each of the individual roadmaps, sprint plans, and overall annual plan for each of these different disciplines within the teams. Everybody can see how all the threads come together.

It makes it so much easier for cross-collaboration. I’ve definitely been very fortunate to have an incredibly talented, smart team. I just need to give them the seed of the idea and they just disperse it and come back with even better and bigger ideas around how their particular area can contribute to the strategy.

We're being very specific around the areas that we want to build thought leadership in, because otherwise you end up skimming the surface. Whereas to be a true top leader, you need to have deep knowledge and expertise, and for it to be consistent. And so, eventually, thought leadership obviously feeds into your vision, your brand and your reputation.

And with that, it has to be consistent and familiar. We know that somebody needs to see an ad several times before it even resonates. It’s the same with thought leadership around a particular topic. If Zai wants to have a clear association with a topic, we're going to have to be delivering those insights and opinions for a significant amount of time before it really lands and sits with someone.

When someone wants to know something about a particular topic, they know that Zai’s blog is the place to go. It's no different than what HubSpot did. It took them a long time to become the key go-to place for marketers to get everything marketing strategy and execution related. It takes time.

Definitely. It's doing it in a way that's memorable as well, because there are so many competitors out there. You've got to stand out in the way you present your thought leadership activities and any kind of inbound marketing.

Making your brand memorable

Brand has got to be a big part of these long term projects, because you want it to be top of mind when people are thinking about certain subjects. And the best way to do that is to have a strong, powerful brand. We got into quite a lot of branding talk in our last episode. Do you want to expand on how the brand is setting you up to go with these kinds of activities, and these kinds of strategies?

Yeah, definitely. Even though we hadn't had an impact on the ABM or ABX strategy officially at that time, one thing we did know is that in the sea of sameness that is most tech companies these days, there was no way we were going to be cookie cutter.

There's a very typical uniform method that goes along with Fintechs. You can see them a mile away. We were already making that decision last year. We launched our brand Zai last November. And we're still very excited and thrilled to see that it does stand out. But the design element of it is only one part of it.

It's also going to be exciting to see how we're showing up in the digital world and elsewhere. Obviously, SEO is a major component of it. The interesting thing about SEO is, because you're relying on people searching for things, everybody ends up in their own echo chamber, searching for things that they're already familiar with or know about.

You're trying to position yourself as a thought leader, as someone who's coming up with newer ways of thinking. You're trying to have that combination of familiar things that people are actually going to invest time to read about, but you also want to be layering it with additional insights.

Actually, that's really what helps brands and companies stand apart as thought leaders. It’s getting that combination right. It's really hard. It really takes a lot of finesse. Our content marketing teams are set up, thanks to our head of content marketing, in much more of a newsroom type setup. And we're really looking at the quality of content from the lens of that combination. But it takes a lot of effort and smarts to go into that.

How much influence do you have as a CMO on the direction that the content takes? Do you trust them completely?

I absolutely trust them completely. With me being a T-shaped marketer, I've come up the content and brand track. So, just by virtue of the excitement, I guess I'm working on that particular area, because it was my bread and butter coming up. I do get very involved, but it's for the enjoyment of it.

But they've absolutely got full control. My head of content comes from a media background. They’ve taught me a lot about how to approach the production of content, and looking at it through a very different lens. I would have been very focused on the technicality of it and what we're trying to achieve in terms of measuring SEO and things like that.

We've really now pushed the envelope on the entertainment part of our content. I don't mean entertainment in a funny way but in terms of educational, interesting pieces. We're only scratching the surface. We're still a new enough brand. We have a lot left to do. But that's definitely an example of how we're going about it.

As you say, it's a way of making things memorable as well, which is why you need these long-term strategies. You don’t want to be an educational piece that’s just all bullet points That's not going to stick in your mind. You might remember the facts, but will you remember where the facts are from?

People remember things more if they've enjoyed it. There’s more of an emotional connection to it, a bit of a serotonin boost. That, again, is going to take a bit of rethinking from B2B brands, particularly in the SaaS space, where a lot of marketing is very, very features driven.

Is this kind of long-term approach possible in that kind of space? Those very fast-moving environments where product developments can rapidly change the product you're selling? Can you have those kinds of long term goals in those kinds of environments?

You absolutely can, because it's more important that people get that serotonin fix from the author. Maybe they trust that brand, company, or the team to produce quality, interesting insights.

As the market’s moving really fast, they can trust that the author is able to move along with it. I think that's probably the difference between people appreciating and enjoying a piece of content. It goes back to that consistency also, consistency of quality.

People get exhausted by having to learn how to read somebody's content. But even something as simple as that, knowing that they can come and you're following a consistent format, it still takes effort.

That effort/reward equation needs to be balanced in their favor, because that's what kicks in for your dopamine hit. You're enjoying something, and it hasn't involved a lot of effort. That's the adoption ratio as well.

That's what happens with products and services. The lower the effort, the higher the return on enjoyment. Equally, if you’re solving a problem, or reducing a pain point, people are going to come back for more. The very same is true of content.

That's definitely a formula where we don't have an Excel sheet. You can’t just tick all of these boxes to achieve this. My team knows that inherently. And it's because they've come from journalistic backgrounds and storytelling backgrounds that they know that it's so much more than the words on the page.

B2B marketers have been told for many years that it needs to be highly targeted. The ABM movement came out of a desire for marketing to be highly targeted. But if you're thinking about mass-market appeal, just talking about this 95%, you can't really be too targeted, you've got to do sort of like a mass appeal piece, don't you? Or can you do highly specific niche topics to appeal to these types of audiences?

You got to do both. The highly targeted approach yields results, there is no doubt about that. But again, all that ends up happening is you just end up as a company in an echo chamber. You’re making assumptions about who's going to be interested in your content.

If you're not always pushing the envelope a bit and creating target lists for people that perhaps you wouldn't normally go after, adding a little bit of randomness to your list, you’re not going to branch out. A bit of organized randomness maybe. It’s a case of ‘let's just see what happens.’

If you don't get into other people's peripheral vision, they're never going to go looking for you. You're going to be limiting your own market. A way to make your market bigger is to create interest, but you’ve got to get in front of people first.

And if they're not looking for you, you have to get in their line of sight. But it's also about the cross-pollination of topics, for instance, and finding really smart threads that you can link to different target markets.

We know that we can serve a market, but our content just can't broach that topic and really service them with what they're searching for. How do we find a thread to get into their search results without just being completely random with what we're talking about?

I'll give you a perfect example of how we're getting ourselves in front of newer audiences. We sponsor a show. It's called The Innovation Show. It's a podcast. The host mostly interviews authors. it could be anything. It might be someone who's authored around the future of blockchain, or it could also be around behavioral science.

The only thread that goes through it is the talks about innovation, not just in business, but in politics and in economies and in markets and in different communities and all lots of different ways. You've got a really broad audience. We sponsor that.

We can least get ourselves in front of these people who are looking and obviously really hungry for new, interesting information. So, there are lots of ways that you can break out of the echo chamber. That's one of the ways that we're doing it.

When does the 95% become ready to buy?

How do you know when someone has moved into the 5%? How do you know that that's happened? Is it just them putting their hand up and saying, “Hey, I'm ready to buy?” Or are there some other indicators?

To me, the 5% are active in the awareness stage and the consideration stage. Those typical stages that we're all familiar with, to me, that's when the 5% are active. In that awareness stage, the buyer becomes aware that they have a problem, or they see an opportunity, and they begin to research about it. They're looking to more clearly name and frame and understand their problem or their opportunity. They're searching for this particular content.

So, if they then come across our content that happens to define that particular problem or opportunity, and they download it, or they engage in it, they are able to mark that intent. We have them immediately.

Then they're in some kind of buying cycle. Once you've identified them, it's a bit easier then to see them or watch them or nurture them along those other stages. The key bit is when they move from the outer market to in-market piece. That's where you gotta catch them. Once they're out there researching and you don't make their shortlist of the ones that they want to research, they forget about you.

People don't have the luxury of time to research deeply. They just want to move things along really quickly. They have to try and convince many within their business to go along with it. And it's a painful exercise. So, people just want to get through it as quickly as possible. So, you've a very short window to make sure that you're on that shortlist at the start of that journey.

And that's where having the memorable brand comes into play. If you're a memorable brand, you're more likely to appear on that shortlist that people might have.

And this is where human bias and behavior comes in. A lot of the time, you know before that even final three companies which you’re going to go with. A decision has already emotionally been made by a lot of people on the journey. And depending on how stringent your procurement processes need to be, the emotional decision might not have as much influence, but in a lot of places it really does.

80% of research is done online before they even get near contacting a company. So, you need to make sure that you've satisfied all of their concerns, not just that person's concerns, but the stakeholders that are behind them. You need to make sure their concerns have all been addressed. And, really, by the time they're getting in front of you, they just want to make sure what you've said on paper tallies with what you're going to tell us verbally in a live meeting.

Awesome. There's probably quite a few of our readers, particularly ones with maybe quite demanding CROs and CEOs, are thinking "There must be a way to speed up the process of moving from the 95% to 5%". Do you think there is a way to do that? Is there a way to sort of speed things up?

You can't force people to move into markets. We know that. But what you can do is make problems and opportunities. Make them aware of problems and opportunities because they're only going to be prompted to move into buying if they realize that there is a need to and so writing content around problems that are very specific to their business is key.

We know a lot of people will just get on with their job. They're hyper-focused on what they're working on. So many people complain that they don't have time to take a step back. Look at the bigger picture, investigate what's going on in their sector, both in their own country and globally. They don't have that time.

But if you can solve for that by doing the heavy lifting of that research, and alerting them to what's going on in their industry, then we can have a solution in place. Otherwise, we're going to become uncompetitive, or we're going to lose out on a market that you pointed out to them. For me, that's realistically the only way that you're going to influence them moving into markers.

If they're not searching for how do you get those solutions in front of them? Does it require a bit of outbound marketing? Is it about some paid placements to get them in front of them? Where do we get those?

Yeah, it's a mixture. It's about finding those sweet spots. There’s never gonna be just one channel or one approach, it has to be all of these things working in tandem. Again, it goes back to that thread piece.

If you're trying to get in front of people who are really not looking for you, you're gonna have to make assumptions. You’re gonna have to have the time and effort and budget to be able to actually interview customers to understand what they're actually searching for.

Then you can weave in those problems and potential opportunities into the things they are searching for. That's how you get it on their radar. But it gets way too expensive to force it in front of them through outbound marketing. It's just not scalable. There are much savvier ways to do it.

Golden rules of the 95:5 ratio for B2B marketing

We probably could talk about this all day, but it might make sense for us to pick up on this conversation again, maybe in a few months when you have this strategy running for a while and we can talk about how it's developed over time. But for now, let's sum everything up with your golden rules for how to approach this 95:5 ratio.

First one, you have to take the time to educate people on what to do, and the effort that will be involved to make it happen. Because once you have that, then you have cooperators rather than blockers. That's definitely the first first piece of it.

And the second one is about the setup. Like I said, we'd already been a lot of the setup for inbound marketing strategy, so it could easily pivot to an account-based experience strategy. But I would go nowhere without my marketing technology stack. Use Asana for project management, HubSpot for product distribution.

The third one is about the inbound strategy. With the inbound, it just comes back to the content piece. It's about trying to stand out from that sea of sameness. It's easier said than done. And people don't bother to do it, because actually, it takes a bit more effort and time. But if you hire writers and storytellers they just inherently look at research and then what they put down on paper is very different.

Maybe more formulaic content writers put a bit more emphasis on the SEO side of it, and less on the actual quality and experience of the read. And I do think with the advent of data and an emphasis on measurement for absolutely everything, it's become keywords first and then just build a story around the keywords. And that really takes away from the quality and the enjoyment of the reach. So, you need to find that balance.

How are you laying the foundation for the long-term? Do you need advice on how to build marketing strategies for both sides of the 95:5 ratio? Join the conversation on the CMO Alliance Community Slack channel!

The 95/5 rule: only 5% of your market are ready to buy - what do you do?

Will Whitham