The bigger the business, the more complex the buying committee, the more difficult to navigate the buying process and the longer the sales cycle.
The 95:5 Rule is a heuristic published by Linkedin's "The B2B Institute" that provides a North Star for improving Enterprise B2B GTM execution.
"The time between purchases for many goods and services is quite long. Corporations change service providers such as their principal bank or law firm around once every five years on average. That means only 20% of business buyers are ‘in the market’ over the course of an entire year; something like 5% in a quarter – or put another way, 95% aren’t in the market. The 95% figure is not meant to be a precise rule. We’re using it as a heuristic to get the idea across that the vast majority of businesses, for a large proportion of products, are not in the market in particular time periods."
- Prof. John Dawes of "The B2B Institute"
Considerations + tactical recommendations:
1. Establish a buyer relationship before they enter the 5%, an inside track
2. If you wait until the buyer goes in-market, you're at a competitive disadvantage to your competition that invested in building awareness and a relationship with the prospect when they were previously in the 95%
3. Marketing should focus on the 95% to generate future sales
4. Think of the 95% as 2 segments - those most likely to convert to the 5% within 90 days and everybody else - and develop Ideal Customer Profiles (ICPs)
5. Calibrate your investments between these 2 segments via branding (25%) and demand generation (75%)
6. Optimize the 5% by investing in improving the buyer journey, putting leading edge sales tech stack in place including Conversation Intelligence, Coaching Software + Relationship Intelligence
7. Ensure your Sales team are consultative sellers who crush your narrative, have a deep understanding of your value proposition, points of differentiation, competitive landscape, ICPs jobs to be done etc
8. Within 6 months, benefit of investing in the 95% should include faster + more successful sales cycles with the 5% as you'll have the inside track
9. Compress the sales cycle via wedge offerings, product led growth strategies or the equivalent to make it easier for a buyer to say yes, faster
10. Balance Market Development with Market Penetration as it’s more cost effective to expand a relationship vs establish one from scratch
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