95% of your market is not buying today. Measure accordingly

Professor John Dawes of the Ehrenberg-Bass Institute put a number on something most people in B2B already sensed:

Up to 95% of people or firms are not in the market for many goods and services at any one time.

The arithmetic is unglamorous. If the average replacement cycle for a category is five years, then roughly 20% of the market is in play in a given year, and about 5% in a given quarter.

The measurement consequence is the part that gets skipped.

What your analytics can actually see

Your marketing analytics observes people who did something: clicked, submitted, called. That is, by construction, a view of the in-market minority. The other 95% generate no events, so they generate no data, so they do not exist in your reporting.

This produces a systematic distortion that has nothing to do with tracking quality:

Anything that works on the out-of-market majority looks like it does nothing. Brand building, category education, presence in places buyers are not currently transacting. All real, none measurable in a conversion-based system.

Anything that harvests existing demand looks spectacular. Branded search converts people who already decided. Retargeting converts people already considering. Both have excellent cost per lead because both are collecting demand somebody else created.

Optimise on conversion metrics alone and you will reliably shift budget from the first category into the second. It will look correct every quarter, and it will hollow out your pipeline over a horizon longer than your reporting cycle.

Why the pipeline thins later, not now

The 95% are not a lost cause. They are a queue.

Some proportion enters the market each quarter. When they do, they arrive with an existing set of brands they can recall, formed over the months and years they were not buying. Dawes again:

You need to advertise to people who aren’t in the market now, so that when they do enter the market your brand is one they are familiar with.

If you spent the last two years harvesting demand and building none, the people entering the market this quarter do not have you in their consideration set. That does not show up as a bad month. It shows up as a slow structural decline in inbound quality that gets attributed to the market, or to the category, or to competitors being aggressive.

What to do about the measurement gap

Not “stop measuring.” Measure differently in three specific ways.

Separate created demand from harvested demand

The single most useful cut. Split your channels into ones that reach people who did not know they needed you and ones that convert people already looking.

Branded search, retargeting and direct are harvest. Non-brand search, cold outbound, content that ranks for problem-shaped queries, most paid social, most events are creation.

Report them separately. Never let a blended cost per lead compare across the two, because harvest will win every time and the comparison is meaningless. They are different jobs with different economics.

Use first-touch credit

Already the right choice for other reasons, and this is another. First touch credits whatever brought a person into your world, which is usually a demand-creation channel. Last touch credits whatever they clicked once they had decided, which is usually harvest.

Last touch makes creation invisible. Since creation is what serves the 95%, last touch structurally defunds the thing that fills your future pipeline.

Track leading indicators that do not require a conversion

Since the out-of-market majority cannot convert, look at what they do instead.

Branded search volume over time. Genuinely the best cheap proxy available for mental availability. If more people are typing your name, more people know it. It is directional rather than precise and it is far better than nothing.

Share of non-brand impressions in your category. Are you present where people who do not know you are looking?

Third-party citation. Are you referenced by people who are not you? That is one of the few observable signals that you exist in a market’s awareness rather than just in its transaction logs.

Competitor movement in the same measures. Which is the competitive audit’s job. If your presence is flat and a competitor’s is climbing, that is a leading indicator of a share shift that has not reached your pipeline yet.

The connection to competitive intelligence

This is the strongest argument for auditing a market rather than only measuring yourself.

Your own analytics can only describe the sliver of the market that transacted with you. It has nothing to say about the buyer who compared you to two competitors and chose one of them, which is most of the decisions being made about you.

A scored competitive audit is one of the few ways to observe the part of the market your own instrumentation cannot reach. Not because competitor watching is intrinsically interesting, but because most of the decision happens in a room you are not in, and the audit is the closest available view of that room.

That is why the two data lanes exist together rather than separately: your own performance describes what happened to the 5%, and the competitive audit describes the conditions the other 95% will encounter when they arrive.

The honest caveat

The 95:5 figure is a well-founded generalisation, not a measurement of your specific category. Replacement cycles vary enormously. A business with an annual renewal has a much larger in-market proportion at any moment than one selling a ten-year capital asset.

Work out your own number. Take your average customer’s replacement or renewal cycle, invert it, and you have a rough in-market proportion. If it is 30%, harvest deserves a much larger share of your attention than if it is 5%.

The principle holds either way: the proportion of your market that your conversion metrics cannot see is a number you should know, because it tells you how much of your marketing effect you are structurally unable to observe.

The Dawes work is cited with its date and a link, alongside every other figure on this site, in the sources section.