How your category's growth rate changes who's actually in-market, and what it means for your budget.
The 95:5 rule says 95% of B2B buyers are out-of-market at any given moment. Ehrenberg-Bass developed it for stationary markets: stable categories where the pool of potential buyers doesn't change much year to year.
Dale Harrison showed what happens when it does. In growing categories, first-time buyers flood the in-market pool continuously. They don't have vendor preferences yet. They aren't on your retargeting list. And their share of the in-market pool grows as the category grows faster.
The 5% baseline also assumes buyers purchase in this category roughly every five years. Categories with shorter cycles have more buyers in-market at any moment, not because the category is growing, but because they turn over faster. A SaaS tool renewed annually operates in a different demand environment than a CRM replaced every seven years, even at identical growth rates.
The model also assumes the problem being solved is stable. In categories where AI is disrupting whether the solution category itself still applies, the effective in-market pool isn't purely a function of growth rate. The 5% assumes the problem is stable. What happens when the problem itself is in play?
Adjust the three inputs for your category. The outputs update in real time.
Based on research by Dale Harrison: "Category Growth Breaks the 95:5 Rule" (LinkedIn, 2026). Introduced in Open Folders: How markets actually grow →
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In-market %: Harrison's formula uses compound quarterly growth to derive the in-market pool. in-market = (25 / cycle) + ((1 + growth/100)^0.25 − 1) × 100. The baseline (25 / cycle) replaces Ehrenberg-Bass's hardcoded 5%: at a 5-year buying cycle, 25/5 = 5%, matching the original 95:5 rule. Shorter cycles raise the baseline; longer cycles lower it.
First-time buyers %: New entrants as a share of the total in-market pool. At 0% growth, all in-market buyers are replacement buyers. As growth rises, first-time entrants dominate. The buying cycle shifts the ratio: shorter cycles mean more replacement buyers relative to first-timers.
Budget reach: Peak reach occurs at a 50/50 split because performance marketing captures current in-market buyers while brand marketing reaches the next wave entering the market. The two pools are additive only when budget is split between them. Verified against Harrison's published data points: CRM at 13.4% growth → 8.2% in-market ✓; CRM at 90% growth → 22% in-market ✓; 100% growth → 24% ✓.
This model was introduced in Open Folders, a weekly newsletter on marketing science, measurement, and the gap between what the research shows and what teams actually do.