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The Buyer Pyramid Explained And Why It Matters

The buyer pyramid describes the portions of the population that could be considered potential consumers for your business. In fact, of the entire universe, on average only 40% of the population is even in need or would want your service but only 3% are ready to buy.


So how is this relevant to your business?

There isn’t any single company working with unlimited resources, so the buyer pyramid helps your marketing team decide your targeted population size which determines your total marketing capabilities.  Once you understand your total in-market population size and their behavior on and offline you will be able to create an effective omnichannel marketing program. An omnichannel marketing program creates a cohesive marketing campaign across multiple marketing channels. 

90/10 Split

The split in this population creates two buckets. The bottom 90% do not need your service but might in the future. The great thing about the bottom 90% is that ⅔ of this population could be interested one day with ⅓ a prime candidate but not in need of your product or services just yet. For instance: Hot tubs. As a homeowner with stable income without very young children, I am a great potential customer to target. However, there just aren’t as many cool nights for me here in Florida as there are in a state like Michigan so it’s not something I’ve been thinking of purchasing. While it doesn’t matter what area of the world you are in, sore muscles and arthritis are great reasons to get into a hot tube so I fall perfectly in that “interested one-day” category as I age or the kids move out.

The other 10% of the population is doing the research and in the decision-making phase. This is where your inbound leads and the organic or direct website traffic come from. These are the people that are ready to make a purchase now or will be soon.

Breaking down the 10%

The tip of the pyramid equals 10% of the population, the people ready or near-ready to buy, and is the most cost-effective population to target with your media dollars. 

  • The top 3% of the entire population, are your active shoppers, in need of an immediate response to sale inquiries, and are ready to purchase immediately. These will be the first sales you will see when you start tracking your return on ads spend (ROAS).

  • The second tier of the top 10% is the top 7% that will likely purchase soon. These consumers are in your target market but aren’t actively searching for a solution at this time. There could be multiple reasons for this, including someone who is an active baker but already owns baking supplies or someone interested in purchasing a home but is actively working on saving for the down payment and fees.

Spending effectively

Unfortunately, there isn’t a program that works for every business, but there is a good rule of thumb. Go where your potential customers are! Everyone uses search engines. There are specific social media sites depending on demographic and business verticals.  Utilizing cross-device matching and contextual AI targeting focuses on people who are researching and reading about their specific need. 

Need help figuring out how many people are in your marketing funnel?  Contact the Diamond Media Solutions Business Development team, to help provide a comprehensive audience profile and strategic omnichannel marketing plan. This is a free service to get you started or boost your marketing strategy!

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