November 24, 2025
The 95–5 rule is a marketing concept suggesting that only around 5 percent of buyers are “in-market” and ready to purchase at any given moment, while the remaining 95 percent are not actively shopping. The idea gained traction because it offers a simple explanation for the importance of long-term brand building: if most of your future customers aren’t buying today, your brand needs to stay memorable so they think of you when they eventually are.
What often gets overlooked is that the rule was never presented as a universal constant. It originated from research in B2B categories with long buying cycles, where companies switch providers rarely. As the idea spread, it began to be applied much more broadly than intended—sometimes without any consideration of whether a given category’s buying behavior actually resembles the conditions the rule was based on.
Understanding where the 95–5 concept came from—and where it doesn’t apply—is essential for sound decision-making. What follows is a closer look at how the rule works, why it matters, and why taking it literally can lead marketers in the wrong direction.
Stop Treating the 95–5 Rule as a Universal Law
The 95–5 rule has become one of the most widely cited ideas in marketing. It’s often used to justify rigid budget splits, siloed teams, and heavy long-term brand investments. Somewhere along the way, a context-specific heuristic turned into a supposed law of marketing physics.
It’s worth resetting the conversation.
The rule originated at the Ehrenberg-Bass Institute as a way to explain buying dynamics in B2B markets with long interpurchase cycles—categories such as legal services, banking, and consulting. In these industries, companies tend to switch providers infrequently. If a business changes law firms every five years, then roughly 20 percent of buyers are in-market in a given year, or around 5 percent per quarter.
The math behind the idea is simple:
Proportion in-market = Time period / Average interpurchase time
The point was never that every industry has only 5 percent of buyers ready to buy. The point was that when a small proportion of buyers are actively purchasing at any moment, brands can’t rely solely on short-term activation. They need marketing that builds memory structures so they will be recalled when those buyers eventually enter the market.
Problems arise when the 95–5 concept is treated as universal. Interpurchase times vary dramatically across categories:
Shift the replacement cycle and the proportion shifts with it. Apply the formula literally and the numbers can be made to say almost anything. Shrink the time window enough and any category becomes a zero-percent in-market category. Stretch it and almost any category looks like a constant churn of demand.
This is why using the 95–5 rule to justify strict brand–performance splits is flawed. The rule tells you something about buyer availability, but nothing about team structure, budget allocation, or strategic design. It also assumes brand and performance operate in opposition, when they’re actually two points on a spectrum. Brand investment improves future conversion efficiency; activation captures current opportunity. They reinforce each other.
The takeaway is straightforward: the 95–5 rule isn’t wrong, but it is a heuristic. It’s a useful way to explain long-term demand generation in slow-moving markets—but it’s not a universal ratio, and it shouldn’t dictate how marketing organizations are built.
Marketers should adopt the spirit of the idea—most demand exists in the future—without treating its percentages as immutable. The real advantage comes from understanding your category’s true buying cycles, your customers’ behavior, and the role your brand plays across both short- and long-term horizons.
When the nuance returns, so does the strategy.