Knowledge Paper 017 · Marketing Science
How Do Markets Really Work?
NBD and why almost every market is dominated by light buyers.
The short answer
Imagine lining up every customer in your market.
Put the people who buy most often on the left.
Put the people who buy least often on the right.
What would the graph look like?
Most people imagine something fairly even.
It is not.
Instead, it falls away almost immediately.
A tiny number of people buy frequently.
Most people buy only occasionally.
That shape appears again and again.
Soft drinks.
Coffee.
Beer.
Insurance.
Lawyers.
Advertising agencies (DON'T WE KNOW IT!)
Accountants.
Almost every competitive market follows the same pattern.
Marketing scientists call it the Negative Binomial Distribution.
Everyone else calls it the NBD Curve.
LOTS OF PEOPLE
A FEW PEOPLE
It is not really about mathematics.
The name makes it sound frightening.
Fortunately, the mathematics is somebody else’s problem.
The important bit is the picture.
The curve tells us something remarkably simple.
The Coca-Cola example.
Think about Coca-Cola.
You probably imagine millions of people drinking it every day.
Some do.
But a surprisingly large proportion of Coca-Cola’s sales come from people who buy it only once or twice a year.
At Christmas.
A barbecue.
The cinema.
A holiday.
A football match.
Most Coke buyers are not obsessed with Coke.
They are simply occasional buyers.
Yet together, they account for an enormous amount of business.
The same thing happens everywhere.
Replace Coca-Cola with almost anything.
A solicitor.
Most people do not need one this month.
An advertising agency.
Most businesses will not appoint one this year.
A kitchen company.
You might buy once every fifteen years.
A mortgage broker.
Perhaps three or four times in your life.
Every market looks different.
But the curve looks remarkably similar.
A few heavy buyers.
Lots of light buyers.
Evolution explains why.
This should not really surprise us.
Human beings have limited attention.
Limited money.
Limited time.
Limited memory.
We cannot become loyal customers of everything.
Instead, we spread our attention across hundreds of categories.
Most of which we enter only occasionally.
The NBD Curve is not a quirk of marketing.
It is what you would expect from human beings living in a world of limited resources and endless choice.
Why marketers get this wrong.
Most businesses spend their time thinking about existing customers.
Their biggest clients.
Their regular buyers.
Their loyal fans.
That is understandable.
Those people are visible.
They answer surveys.
They leave reviews.
They come to events.
But they are not the whole market.
In fact, they are usually the minority.
The future of most brands depends on people who hardly think about them at all.
This changes your strategy.
If most of your future customers are light buyers, your marketing has a different job.
It must be easy to notice.
Easy to remember.
Easy to recognise.
Easy to find.
Because when someone enters the market after months, or even years, you need to come effortlessly to mind.
That is why Mental Availability matters.
The hidden link.
The NBD Curve sits underneath many of marketing science’s biggest discoveries.
The 95–5 Rule.
Double Jeopardy.
Mental Availability.
Distinctive Brand Assets.
Low Involvement Processing.
They are all describing different parts of the same reality.
People buy infrequently.
Memory matters.
Growth comes from reaching lots of light buyers.
Not just selling more to heavy ones.
Why this matters.
Imagine you are running a small law firm.
Your existing clients are important.
But most businesses in your town will not need a solicitor today.
Or next month.
Or perhaps next year.
When they finally do, will they remember you?
The same is true for architects.
Recruitment companies.
Estate agents.
Accountants.
Marketing agencies.
The challenge is not persuading people every day.
It is being remembered on the one day that matters.
Common mistakes
Obsessing over heavy buyers.
They are valuable.
But there usually are not enough of them to fuel long-term growth.
Mistaking loyalty for scale.
Most markets grow through light buyers, not super-fans.
Ignoring people who are not buying today.
Today’s non-buyers are tomorrow’s customers.
Treating the NBD Curve as just statistics.
It is not really about mathematics.
It is about understanding how people behave.
The SignalWorks View
Most businesses imagine their market is made up of loyal customers.
It is not.
It is made up of ordinary people with busy lives.
People buying hundreds of different things.
People whose attention is constantly elsewhere.
Your job is not to become the centre of their universe.
Your job is to be easy to think of when the moment comes.
Because the biggest opportunity in most markets is not selling more to your best customers.
It is being remembered by everyone else.
The NBD Curve reminds us that markets are not made up of loyal fans. They are made up of ordinary people who occasionally need you. Your job is simply to be the brand they remember when that moment arrives.
Key Takeaways
- The NBD Curve shows that most markets are dominated by light buyers.
- Heavy buyers matter, but they are usually a small proportion of the market.
- The same pattern appears across products and services.
- Growth comes from reaching many occasional buyers.
- Mental Availability becomes more important than loyalty alone.
Frequently Asked Questions
What is the NBD Curve?
The NBD Curve describes how buying frequency is distributed in most markets. A small number of people buy frequently, while most buy only occasionally.
Does this only apply to consumer goods?
No.
The same pattern appears in professional services, financial services, retail, technology and many B2B categories.
Why is the NBD Curve important?
Because it shows why brands need to reach light buyers, not just focus on existing loyal customers.
Is this connected to the 95–5 Rule?
Yes.
The two ideas complement each other. The 95–5 Rule explains that most buyers are out of market at any one time. The NBD Curve explains that, even when they are in the market, most buy infrequently.
Further Reading
- Andrew Ehrenberg — Repeat Buying
- Byron Sharp — How Brands Grow
- John Dawes — research on buying patterns
- Ehrenberg-Bass Institute publications
Related Knowledge
About The SignalWorks
At The SignalWorks, we use evidence from marketing science and behavioural science to help organisations grow.
Because behind almost every successful brand lies the same simple truth:
Most of your future customers are not your biggest customers. They are the people who almost never think about you — until one day they do.