When cashflow is tight, and headcount is limited, it’s only natural for SME owners to focus on leads that promise quick wins. However, there’s a powerful marketing principle that often gets overlooked, one that can radically reshape how you approach customer acquisition and long-term growth: the 95/5 rule. In essence, it reminds us that only around five per cent of a given target market are actively looking to buy at any given time, leaving the other 95 per cent not yet in the market. For busy SME founders, it’s all too tempting to ignore the 95 per cent, but doing so risks missing the lion’s share of potential future business.
In this article, I’ll examine what the 95/5 rule is, why it matters for SMEs, and how you can strategically address both the immediate five per cent who are ready to purchase and the remaining 95 per cent who might buy in future (as long as you’ve laid the groundwork). By understanding how to cultivate a robust, sustainable pipeline that operates over both short and longer time horizons, you’ll be able to ensure that today’s marketing investments continue to pay dividends long after your immediate sales objectives have been met.
Recognising the 95/5 Rule
At the heart of the 95/5 rule lies the idea that most people in your total addressable market aren’t currently shopping for a particular solution. They might be entirely unaware they have a problem, they could be putting off purchase decisions until a future date, or they might have simply accepted subpar practices as “good enough” for now. Meanwhile, a small fraction, roughly five per cent, are actively seeking a product or service like yours. They’re comparing suppliers, checking online reviews, and gathering quotes. Naturally, these buyers tend to be the easiest to convert, and it’s unsurprising that so many businesses chase them.
However, the problem arises when you base your entire marketing strategy on that five per cent who are already in-market. It turns into a dogfight, with multiple competitors vying for the same tiny pool of ready-to-buy prospects. Costs escalate as you pour budget into pay-per-click ads or outbound campaigns fighting over the same leads. While there’s nothing wrong with targeting low-hanging fruit, SME founders should consider how to build a sustainable brand presence that also captures the attention of the much larger number of potential future buyers. Only by addressing both segments can you smooth out your sales pipeline, prevent dramatic peaks and troughs, and create a foundation for robust growth.
Why This Matters for SMEs
For any SME, resources, whether financial or human, are inherently finite. If you spend the majority of your time chasing an ever-dwindling pool of ‘ready to buy’ customers, you can very quickly deplete your marketing budget and team energy without making longer-term inroads into the untapped 95 per cent. Worse, you may end up becoming dependent on high-intent but expensive tactics, such as pay-per-click ads, in a fiercely competitive auction environment.
By contrast, deliberately investing part of your marketing efforts in appealing to and educating the 95 per cent delivers a far healthier, more predictable pipeline over time. If your name appears familiar when these individuals finally become aware of their problem, you’ll already have established trust. They’ll recall reading your blog posts, watching your explainer videos, or hearing success stories from customers in their own industry. The decision to engage your services at that critical turning point becomes a great deal easier when they’ve already seen proof of your expertise.
Moreover, SMEs are often praised for their agility, personal touch, and specialised knowledge. These strengths lend themselves particularly well to nurturing audiences that aren’t yet in-market. You can tailor educational content, share relatable stories, and respond more directly to questions than bigger, more bureaucratic competitors might. Over time, this personalised, considered approach can convert a seemingly indifferent audience into a robust base of informed, future-ready customers.
Tactics for Capturing the 5% in the Short Term
Despite the broader importance of long-term brand-building, there’s no denying that SMEs need sales. Immediate revenue may be the difference between hitting payroll or facing a cash crunch. Below are some strategies to address those prospects who are actively searching for your product or service today:
1. Search Visibility and Reviews
When buyers know they have a problem and are ready to solve it, they’re likely to conduct online searches and consult customer reviews. Ensuring that your website is well-optimised for relevant search terms, appearing in local directories (where applicable), and showcasing strong testimonials can make all the difference. Bidding on high-intent keywords can yield immediate leads, though it tends to be costlier. Still, it’s an avenue worth exploring for direct returns, provided you can track and measure your conversions.
2. Highly Targeted Ads
In addition to search, consider targeted adverts on social platforms frequented by decision-makers in your niche. Whether it’s LinkedIn for B2B services or Facebook for consumer-focused offerings, the ability to refine your audience by demographics, job titles, or interests ensures your messaging reaches those already seeking a solution. Keep your calls to action clear and immediate—emphasise quick results or straightforward offers.
3. Personalised Outreach
Nothing beats a personal approach when a lead is nearly primed to purchase. If you have a short list of well-qualified prospects, a thoughtful introduction message or phone call can prompt them to consider your offer. Avoid sending generic emails or using heavily templated scripts; demonstrate that you’ve done some research and understand their unique requirements. This approach is especially effective for more consultative services, where trust plays an outsized role in closing deals.
Nurturing the 95% for Future Wins
If all your attention goes to the five per cent who are poised to buy, you risk ignoring the majority who are not yet ready. By implementing strategies that foster goodwill and awareness now, you place your brand on the radar for when that 95 per cent finally become in-market. Below are some approaches to ensure you’re cultivating long-term relationships that eventually translate into sales:
1. Educational Content and Thought Leadership
People tend to follow brands that provide consistent value over time. Establish a blog, resource hub, or YouTube channel dedicated to explaining the ins and outs of your sector. Produce how-to guides, checklists, mini-whitepapers, or videos that address common pain points—particularly those that might not be recognised as urgent yet. By solving smaller problems for free, you stay memorable and signal that you’re knowledgeable in the field.
For example, if you run a local digital marketing agency, you could publish a short eBook on “Simple SEO Fixes to Improve Your Search Ranking in 30 Days.” While some of your readers won’t be in-market right now, they’ll remember that you helped them for free when they eventually reach a tipping point requiring professional assistance.
2. Consistent Communication
Engage your out-of-market audience through channels that don’t feel intrusive. Email newsletters, social media postings, and occasional direct messages all have their place. The key is consistency, not quantity. Focus on quality updates that educate, entertain, or provide behind-the-scenes insights. Be careful not to overload your mailing list with shallow promotional messages; mix in authentic success stories or share industry news and commentary.
As an SME, you can leverage your personal experience or that of your founders to convey a sense of authenticity, making your communications feel more personable than the templated, corporate approaches often seen from larger competitors.
3. Freemium Trials or Mini-Projects
In certain sectors, especially for software or specialised services, offering a freemium version or a bite-sized project can entice the 95 per cent to sample your offerings with minimal risk. A scaled-down trial, pilot programme, or a workshop that addresses one aspect of a larger challenge can gently transition them from “merely aware” to “partially invested.” Once they see your capabilities first-hand, you’ll be top of mind when they’re ready to roll out a more comprehensive solution.
Identifying When the 95% Become the 5%
Many owners worry that a nurturing approach wastes energy unless it eventually translates into a sale. The good news is that if you’re monitoring the right data points, you can spot when a seemingly uninterested prospect transitions into an in-market lead. This might show up as increased engagement with your website, multiple downloads of gated content, direct email replies, or detailed enquiries about pricing and features.
Make a habit of tracking how individuals interact with your content across platforms. Email service providers, for instance, can tell you who’s consistently opening messages or clicking through, and even which specific links they’re clicking. CRM systems can integrate this data into a single view of a contact’s journey, alerting you when a lead’s level of engagement takes a significant leap. Such indicators should trigger a more proactive, personalised approach, perhaps through a phone call to understand their current requirements or a bespoke proposal that addresses their newly discovered needs.
Balancing Short and Long-Term Marketing
One of the key pitfalls for SMEs is an overreliance on quick, reactive strategies that target those precious in-market leads. While this approach might yield immediate results, it can create a cycle of feast or famine if neglected for too long. When you invest in brand-building, thought leadership, and consistent communication, you set the stage for stable growth. Future prospects become pre-sold on your credibility before they even pick up the phone to enquire about your services.
Aim to allocate a sensible portion of your marketing spend to near-term lead generation—enough to keep revenue flowing—while designating resources to longer-term initiatives that cultivate awareness. In practical terms, this could mean dedicating 60 per cent of your budget to direct response and ads, with the remaining 40 per cent earmarked for content, brand-building, and nurturing campaigns. Over time, you might adjust that ratio if you discover that building a strong inbound pipeline reduces the need for expensive paid ads or direct outreach.
Whether you’re a small local business or a medium-sized enterprise with national ambitions, the 95/5 rule is a crucial reminder that focusing solely on buyers who are ready to purchase today isn’t enough to secure your future. The majority of your potential market is simply not there yet, and if your name doesn’t appear on their radar, you risk losing a vast pool of potential customers. By creating a balanced marketing approach—one that caters to the immediate five per cent and also invests in building credibility with the other 95 per cent—you can generate steady leads in the present while sowing the seeds for sustained growth.
No SME can afford to ignore short-term revenue. However, those that truly thrive are the ones that develop a loyal following over time, earn a reputation for expertise, and build a solid, recognisable brand. As your marketing consultancy partner, we believe in guiding businesses to address both the present and the future, ensuring that each marketing pound spent contributes not just to this quarter’s targets, but to the ongoing expansion and resilience of your entire enterprise.
