Creating a First Call Advantage: Applying the 3% Rule

Apr 26, 2010 | Brand Differentiation, Branding Strategies

The 3% Rule is like the 80-20 Rule.  It’s a rule of thumb to understand your customers’ buying cycle.  The goal is to understand your customers’ buying habits to position your brand as your customers’ first call when they’re ready to buy.

The 3% Rule

At any given time only 3% of your market is buying.  These are the companies calling for proposals, requesting demos, and engaging your sales staff.  Most lead generation programs focus on these active buyers, but what about the 97% of customers that aren’t buying today?  By segmenting your market into buying groups you can develop marketing programs to engage each group.

Let’s define the Buying Segments:

3% are Active Buyers. They have a need, they have made a commitment to change, and are actively shopping for vendors.  They want to make a purchase decision in the next 90 days.  These are sales leads.

7% Intend to Change. These are passive buyers.  These companies might respond to a well timed cold call or marketing campaign, but otherwise they aren’t being proactive in their buying efforts yet.  They are simply talking about it internally, but haven’t gone out shopping for options.

30% are Irritated, but not enough to change. These companies have a pain or a problem with their current solution, but have other priorities at the moment.  Until this issue becomes a priority, they won’t buy.  This is a frustrating segment, because sales people waste countless hours trying to sell to companies that aren’t ready to buy.

30% are Content, and definitely won’t change. These companies may have recently purchased another solution, they may be too small, or they may not be feeling any pain.  Either way they aren’t buying right now.  Any sales or marketing message will fall on deaf ears with this group.

30% are Not Interested in you, period. Basically these companies are never going to choose you.  These are possibly customers you don’t want, or companies that don’t want you.  Don’t sweat it.  Just recognize that this dynamic occurs, and you can’t be all things to all people.

Applying the 3% Rule

The 3% Rule provides context.  It provides a point of view to segment marketing programs to engage customers based on their place in the buying cycle.

For example, content marketing is a very effective platform for engaging non-buyers in the Irritated or Content buying segments.  You can use blogging, podcasts, email newsletters and other forms of valued content to engage your market whether they are buying or not.  This allows you to build trust, rapport and relationships with your customers long before they are ready to buy.  When the time is right, they will call.

On the other side, when targeting the top 10%, Active and Passive buyers, search marketing is extremely effective.  The first place people look when they need to find a product, service or vendor is the Web.  Make sure your brand comes up first in all the major search engines, and you are clearly in their path of search as they go to market to weigh their options.

The 3% Rule helps you go beyond traditional lead generation programs, and develop marketing strategies that engage your total market.  The goal is to establish you brand and customer relationships so companies call you first when they’re ready to buy.

Are you engaging all segments of your market?  Do you use Buying Segments in your marketing?  If so, share your thoughts and how it’s working.

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Jeremy Miller

Top 30 Brand Guru

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