You don’t have to look far to stumble across a company that has seen its once-stellar growth evolve to a point where the customer base stagnates. While business seemingly remains steady, the number of customers simply isn’t growing. Is the market saturated? Of course not!

So why does this happen, and how can you begin to predict when an organization will hit that point of sluggish inactivity? In short, how can you develop an accurate and independent evaluation of how big your company can be, and remove the barriers to help you get there?

I.D. your audience

Most organizations can have its customers identified by one of three characteristics: 1) New – goes without saying, those purchasing for the first time, 2) Expansion – those customers looking to add on licenses or more services; and 3) Churn – either those who don’t renew in a subscription-based model, or those who don’t renew support or other contracts in a traditional sales model.

Each one of these customer groups is just as important as the next. So identifying your audience is the first step in preparing how to approach them. Every cloud-based organization should take an inventory of the specific internal and external variables that are impacting the sales pipeline. Specifically, this inventory should begin by asking a few simple questions about the current customer acquisition process…

1. How many new customers are you adding on a monthly/quarterly basis?
2. How many of your customers are expanding their services?
3. How many customers are you losing?

Start by asking: Who are my best customers?

While the “numbers and figures” member on your team may have a different way of measuring these stats, the fact is that identifying customer personas can help match the characteristics with value for your organization. I have found that there is not one specific way to segment this audience. However, with some analysis, you should be able to build a profile for the buyers of your solutions, listing your typical champion’s title, industry, use cases, and applicable feature set. By understanding your key consumer’s habits, profession, daily online activity, etc., you can better understand how he or she might react to your product and marketing efforts.

Avoid that tempting thought to use that imposing ‘size of first deal’ as an indicator of future success. At Clarizen – as with most SaaS businesses -, we often experience situations where the first deal size is small, but the customer continues to expand their use of the toolset as the value is proven. We have found this model eases the customer into our solution and eventually he or she finds more value in the product in the end.

Chart patterns, identify issues

As you break your customers into segments, it can be helpful to chart their acquisition, expansion and churn. Fairly quickly, you’ll begin to see patterns. Your goal? Find customer segments with strong acquisition rate, and a low churn rate. This process can also help you identify issues: say you gain 200 customers from your IT persona, but experience a very high churn rate. Some quick analysis should help you identify why. Are you positioning your product incorrectly, so that customers are expecting something different? Is your product missing features that are critical for this particular customer type? Once you sort out the causes, you can take action to either stop targeting this segment, or fix the problem so that the churn rate can be reduced. You can also chart the same data relative to expansions.

By understanding these dynamics, you can begin to assess the customer lifetime value or CLTV, and intelligently and predictably identify the customers you want to target. You can then go through your funnel from A to Z, pursuing customers who fit each targeted profile while identifying those you may want to defer.

Retool your marketing

From each defined profile, you can then retool your marketing program to ensure you are providing the right content, messaging and offers so as to attract the right customers. An online marketing model provides crucial tools to focus on these desired prospects. Make sure to consider and optimize:

• Search keywords
• Online ad expressions
• Landing pages
• Lead nurturing
• Website
• Social media channels
• Sales processes and sales tools

You can also re-evaluate personnel, and make sure you’re hiring the right people with the best experience and skills to handle your ideal customer. Personas will also ensure you have a clear vision for ongoing product development to ensure your solution fits the market requirements. Finally, this knowledge will help identify the right partnerships and integrations that you may need to provide your customers with a complete solution to suite their needs.

By taking these steps, you should have a framework for not only predicting the potential of your company, but also a robust and repeatable methodology to continue fueling growth.

About the author

Avinoam Nowogrodski is the CEO and Co-Founder of Clarizen, bringing over 20 years of experience in sales, engineering and business management to Clarizen.