Why does B2B customer growth plateau?
Short answer: growth flattens when the thing that got you here quietly stops working and nobody notices, because revenue keeps arriving from customers you won two years ago. The usual causes are a small set: you stopped doing what built the early momentum, you kept every function on one person’s plate, churn started eating new business, you stopped listening to customers, or the whole pipeline sits on referrals you cannot control.
Five reasons growth flattens, and what each one costs you
| Cause | What you see | What it costs |
|---|---|---|
| Complacency | Same activity, weaker results | The compounding you already paid for |
| Doing everything yourself | Nothing moves without the founder | A ceiling equal to one calendar |
| Untracked churn | New logos, flat revenue | Every new deal replacing a lost one |
| No longer listening | Roadmap driven from inside | Relevance, slowly, then all at once |
| Referral dependence | Pipeline you cannot forecast | Control over your own growth rate |
Here is each one in detail, how to spot it early, and what to do about it.
You’ve been doing everything right. You’ve grown your customer base, increased your revenue, and built a team of rock stars. And then it happened. Your B2B Customer Growth has plateaued and you don’t know what to do next. If this sounds familiar, read on. This post is for you!
On some level, we’re all seeking growth. More buyers, more revenue, quicker innovation, distribution, or service, larger inventory, more locations—the list goes on and on.
But in business, growth is more than something you just hope for to happen, and it can always result in more problems than anyone expects. It is something that must be well-planned.
You must plan for the right kind of growth and the inevitable stumbling blocks and challenges that will inevitably follow.
To be honest with you…You will run into a roadblock at some stage, no matter how careful the preparations and strategies are.
It’s an event or a moment in a company’s progress that’s referred to as an inflection point by growth-minded individuals in the business world. After that, things will have to change in some way.
If you are currently experiencing a plateau in customer growth, there are some things that you can do to help avoid this problem. In this article, we will review what might be causing the issue and how to take action on it.
The Paths to B2B SaaS Growth
There are many ways to grow a business, and there are many reasons why your growth may slow down or stop.
You may broaden your service area, form an alliance or partnership, license your product(s), sell your business as a franchise opportunity, pursue lucrative government contracts, diversify your product line, partner with another company, pursue a new target market, launch an e-commerce website, significantly increase your marketing, and so on.
Each option has its own set of advantages and disadvantages, which you should be aware of, anticipate, and be ready to deal with.
One important thing we must say here is that, when choosing a strategy, don’t choose a particular one simply because it worked for someone else or because it’s currently generating a lot of buzz in the industry. It needs to be right for you because as you already know, growth takes time and effort.
However, choosing and implementing a strategy for growth is just one part of growing your business. It also needs to be monitored and measured.
Why is this important?
Because, without it, how will you know if you stop growing? For example, if you’re measuring increased revenue and it stops growing, that’s a pretty good indicator.
But…
Knowing is only half of the battle.
The question is: Why did your growth stop, and how can you get it going again?
Hard question to answer, isn’t it?
Luckily for you, we covered 5 common reasons for growth plateau, how to identified them and how to fix them.
Let’s start with the first:
1. Complacency
Complacency is a business killer.
It can happen at any moment, anywhere, and on any scale. The owner, the CEO, the manager, the supervisor, the marketing department, the production line, the delivery drivers, the mailroom, and everywhere else.
It’s unavoidable. When you first start out, you want to succeed at whatever company you’re launching. You fantasize about reaching a certain number of buyers or a certain amount of MRR or ARR. You put in a lot of effort to get there, and then the wonderful day comes when it all comes true.
You’ve done it. You’re finally there: SUCCESS! Congratulations are due! Absolutely amazing feeling, right?
But then what? Do you ease up a little bit? A lot? Slacking off is tempting after all that hard work…
And the pressure to succeed has been lifted from your shoulders…
Okay, stop right there!
This is exactly how you fall into a complacency trap!
Too many people fall into this trap without even realizing it…
It starts with one person granting themselves permission to slacken their standards and soon spreads like cancer through the company before anyone notices anything amiss.
How to Identify It?
The first thing to ask yourself is whether you’ve recently hit a milestone of any sort. The last time I remember feeling complacent was when we reached that target and just let things drift for a while, not realizing the impact it had on our company until it was too late.
Next, examine yourself as well as your partners and employees. When a company is over-managed but under-led, complacency emerges. Is there someone in your company who is:
- Disengaged? You need to be invested and excited about the work.
- Waiting to be told what to do? People who are complacent don’t take charge of tasks or projects, preferring to wait for instructions.
- Stopped learning? They don’t take advantage of professional growth opportunities or funds because they believe they already know what they need to keep doing their jobs as they are.
- Not thinking for themselves? They don’t ask questions, make suggestions, or do something other than what is asked or requested of them.
- Cutting corners? Work is completed as fast and with as little effort as possible. It lacks details, suggestions, and collaboration.
- Disgruntled? Anyone who is unhappy with their current job or status will not give their best.
- Apathetic? We need to be passionate about what we’re doing in order to keep going and improve.
- No longer a risk-taker? These people make a difference in the world. They challenge the status quo. You must be one, and you must surround yourself with those who are. Calculated risks elevate a good idea or business to greatness.
If you answered yes to any of these questions, it’s likely that your sluggish growth is due to complacency.
What to do about it? Read on.
How to Fix It
Once identified, complacency can be defeated.
You need to set short, mid, and long-range goals that are achievable with a strategy in place for reaching them. Keep an eye on the progress of these efforts by monitoring and evaluating what is working or needs tweaking as appropriate based on results seen so far. When you finally hit those long-sought-after points, know – or immediately start planning -the next ones!
To get there quicker, make sure everyone in the company is aware of the goals, strategies, and channels for sharing their own ideas and suggestions.
In management, lead your employees, but don’t micromanage them. It diminishes their value, causing frustration and a culture of doing the bare minimum because there is little motivation or opportunity to go above and beyond.
If you notice complacency in an employee, sit down with them and have a conversation. Oftentimes this problem can be solved in just one conversation. Ask the person how you could help get them back on track so that their work is as good as or better than when they were hired!
“If you put good people in bad systems you get bad results. You have to water the flowers you want to grow.” – Stephen Covey
2. Doing It All By Yourself
Entrepreneurs and small-business owners may have to perform multiple roles at first due to necessity, but a growth mentality means hiring experts – or outsourcing – to fill the more challenging roles as the company develops.
Failure to do so almost always results in a waste of time and effort, which can put a stop to growth. It’s impossible to juggle an infinite number of balls without losing any.
How to Identify It
The easiest option is to ask yourself whether you are doing too much on your own. Answer it honestly.
If you don’t want or can’t do that, break it down and look at a few key areas:
- Finances and accounting: Any business, regardless of size, must keep track of expenditures, revenue, taxes, and payroll, among other things. Is this something you’re doing on your own? If you answered yes, and you’re not a qualified accountant or financial wizard, you’re probably wasting a lot of time doing something that someone (or someone) else might do in a fraction of the time (and with fewer errors).
- Administrative tasks: The intricacies of running a company could be distracting you from expanding it. Scheduling, data entry, supply chain management, and other tasks can consume your time, leaving you unavailable and tired to perform other, more important tasks
- Marketing: You may be educated or naturally gifted in this field, or you may not. Many companies would fail if they do not have a dedicated and experienced marketer spreading the word. It takes so much time and effort to do everything and educate yourself at the same time. There’s no way around it.
- Communication: Are you the one who answers the phone, responds to emails, handles complaints, and monitors social media channels? If you’re serious about growing, it’s time to stop.
In general, we can tell when we’ve taken on too much, but admitting it when it’s your business, can be challenging.
Do you have enough time to complete the tasks at hand to the best of your ability? Do you resent or hate any of the responsibilities you have? Do you get irritated at work? Have you forgotten to look after yourself?
If you answered yes, you are doing too much.
How to Fix It
Get help. Hire more full-time or part-time employees who are qualified or experts in the fields you need off your hands. If you can’t afford it right now, consider digital options. It’ll still cost you money, but not nearly as much as an actual employee’s salary and benefits.
For almost everything you’ll need, there are tools, SaaS providers, and freelancers available.
Check this out:
- Accounting and Financing – take a look at QuickBooks Online or Freshbooks. Here are some links you may find valuable: Freshbooks vs Quickbooks, online HR and payroll tools.
- Administrative – consider a virtual assistant service.
- Marketing – if currently, you can’t hire a marketer or outsource to a marketing agency, you may need to keep doing this yourself, but there are plenty of resources that make it easier and more automated. Try Mailshake for cold emailing, Buffer or Hootsuite for social media scheduling, curating, and tracking, Quuu Promote for content promotion, and more.
- Communication – Use a digital help desk like ZenDesk or Help Scout, and/or set up a chatbot on your website and social media channels.
- Find a freelancer to do some or all of these tasks for you on platforms like Upwork and Fiverr.
- There are also task-specific sites and services available, such as 99Designs for graphic design. Simply perform a Google search and choose one that appears to be suitable.
3. Not Tracking Churn and Working to Reduce It
As you already know it’s a lot cheaper to retain an existing customer than to acquire a new one.
Acquisition costs can be 5-7 times higher than retention costs, not to mention the fact that current customers are 50% more likely to try new products than new ones, buy 90% more often, spend 60% more per transaction, and produce 23% more revenue and profitability.
Despite this, only 18% of companies emphasize retention, while 44% emphasize acquisition.
Are you one of them?
How to Identify It
Statistically, you’re likely in the acquisition group.
And you are probably aware of how many new customers, new orders, and new subscriptions you’ve acquired during a set period of time. It’s Business 101.
But you can tell right now whether you’re keeping track of churn and trying to minimize it (when a customer stops buying or doing business with you). So…are you?
It’s either a ‘yes’ or a ‘no.’ If ‘yes,’ great. But it probably needs more focus and attention. If ‘no,’ start today. Seriously.
How to Fix It
Every company experiences churn, but as the saying goes, what gets measured gets managed.
The first step is to start tracking and measuring your customer churn. How many people leave in an average month, quarter, or year? What is your churn rate?
The churn rate, defined as the number of churned customers divided by the total number of customers, should be less than 5%. Most of the time, anything over 10% should be the reason for concern.
Once calculated, you can easily see if it falls within the acceptable range (0-5%) or is getting to be a problem (especially if you see a month-over-month or year-over-year increase).
To reduce your churn, you must show your current customers how much you value them.
How? Try these:
- Listen to them. Ask for feedback, send out surveys, run polls and user testing, and more. Ask what they like about you, what they see as your weaknesses, what can be improved, products or options that’d love to see you offer, and so on. Listen closely and make sure to implement things they’ve said.
- Improve your onboarding. How easy is it for your customers to originally sign up, get access to new features/products, and keep coming back for more?
- Put the customer above all else. Demonstrate that you care more about them than their money. Set up anniversaries and birthday emails to go out automatically. Reward the most loyal customers with points, discounts, or free stuff. Negative reviews and complaints should be handled quickly and positively.
- Follow up with churned customers. Find out why they left or switched to a rival if nothing else.
Think about this: if you reduce your churn by 5%, you’d be able to increase profits by 25-125%! How’s that for growth?
4. Stopped Listening and Innovating to increase your B2B SaaS Growth
Once you stop listening to your customers, the industry, and the competition, you are in danger of becoming irrelevant.
Take BlackBerry, for example. They were the ones who invented the smartphone and ruled the industry with an iron fist. For a while, at least. However, as a result of their success, they stopped listening. They assumed their smartphone was a finished product that would never go out of style. Ohh, how wrong they were…
Customers wanted touchscreens, and bigger screens, and better cameras, and more. But BlackBerry refused to listen or adapt as the market evolved. New competitors appeared, such as the iPhone, who was obviously listening and innovating.
And then BlackBerry’s market share began to shrink. It seemed like such a good idea to start listening and innovating again, but it turned out that by then they were too far behind the competition so any efforts weren’t enough. The last time I saw someone with one of these phones was well over a decade ago.
How to Identify It
It’s easy to think we’ve made it when success is all around us.
But, without listening, our successes will fade away and disappear like the morning dew on a field of wildflowers in springtime.
The truth is…
If you haven’t introduced any new products or services – or updates to existing ones – in the past few months (or more), then you have stopped listening.
If you haven’t introduced any new products or services – or updates to existing ones – in the past few months or more, you’ve stopped listening.
Remember: There’s always room for improvement and new demand.
Businesses grow via innovation. Innovation arrives via listening. Simple as that.
How to Fix It
Easy: start listening.
Ask questions about yourself, your employees, and your customers. What are the emerging industry trends, what are your customers asking for that you don’t currently offer, and how do you streamline and improve employee efficiency?
The advice is simple: ask and listen. Go directly to the source, make yourself available for conversation. It’s not enough to guess or speculate; you need an answer that comes from people who know what they are talking about.
Make yourself available. Plan round tables with your team and partners, and show up. Make arrangements for customer focus groups and attend them. Have established ways for people to contact you – email, social media, live chat, whatever – and be available. Reach out, engage, and connect. Sit back, look people in the eyes, and pay attention to what they have to say.
Allow yourself to be open to what you might hear. Be willing to listen to the “experts'” thoughts, ideas, and rationale. And above all, don’t be afraid to change your mind.
Finally, remember that hearing and listening to someone else’s idea or approach is not a sign of weakness or insecurity. This is something that makes a great leader, great. You can’t be an expert at everything, right?
5. Relying on Referrals
Referrals are great in the early days of a company or business – new customers, rewards for current customers, everybody is happy. But you can’t rely on them forever.
Take a look at this:
- In a survey of 1000+ financial service consumers, 83 percent said they were comfortable offering a referral…but only 29% actually did.
- Referred by a friend, customers are 4 times more likely to buy from or use a business.
- Referred customers have a 16%higher LTV than non-referrals.
Don’t get me wrong here, the referrals and word-of-mouth should be part of your overall strategy, but they shouldn’t be the only strategies employed.
New businesses – and even existing businesses – are overly reliant on both because they are unable to find new consumers without them.
How to Identify It
Examine your company’s data and customer accounts. You should have information about where each customer came from and how they found you, for example through a PPC campaign, organic search, a guest post, social media marketing, or a referral.
Compare the numbers. Maybe you don’t have the data you need, or maybe you already know how the majority of people come, so if you do, crunch the numbers. In an ideal world, you wouldn’t depend too heavily on anyone’s channel.
Referrals and word-of-mouth marketing aren’t marketing unless you’re actively involved in it. Otherwise, you’re just sitting around waiting for something to happen.
Your existing customers may love you, but I guarantee that promoting your company and maintaining a steady flow of new leads is not high on their priority list.
If 25% or more of your business comes from referrals and word-of-mouth, it’s time to diversify.
How to Fix It
If you want to fix it, you need a referral system in place, not a sit-and-wait approach.
Here are some things you should do:
- Always go above and beyond for your customers. Make their service as exclusive as possible.
- Ask for feedback. Gather it, analyze it, put it to good use. Then follow up with the people who gave it to you.
- Provide rewards to those who make referrals. Discounts, points, gifts, experiences… studies indicate that rewards raise the probability of a referral, but the size of the referral is unimportant. According to other reports, non-cash rewards are 24 percent more successful than cash incentives.
- After a good customer experience, rating, or review, ask for referrals.
- Thank those that refer you.
Put referrals to work for you by encouraging and tasking your marketing team with managing the program.
Next, draft a growth plan that includes actively going after your ideal customers in the places they can be found. Who are they? Where can you find them?
Create buyer personas to understand what type of customer is most likely to buy from you and where these people spend their time online.
Make a marketing combination that isn’t too reliant on any single channel. That way, even though one of your channels stops working or slows down, you’ll still be able to bring in new customers.
The answers to the questions of “who” and “where” will determine the “right” combination. It may include the following:
- SEM (search engine marketing)
- SEO (search engine optimization)
- Content marketing
- SMM (social media marketing)
- Traditional ads
- Email marketing
- Events and conferences
- Direct mail
- And more…
Find the combination that works for your audience.
Conclusion
Everything seems to reach a point of “diminishing returns.” Whether it’s a fitness plan, diet or business, there is always that plateau moment. And if you are not prepared for change and growth then inevitably you will hit a plateau.
You need to plan for growth. You must keep an eye out for signs of decline.
How many of the following statements apply to you and your company?
- Recently, there have been few, if any, new products or updates.
- Recently, your website has received few, if any, updates.
- For the past six months, your bottom line has been fairly stable.
- There are no clear, measurable goals.
- There is no clear vision or mission statement.
- You’re not keeping track of your competitors, customers, or industry.
Even one ‘yes’ could be a signal that decline is coming.
FAQ: growth plateaus in B2B
How do I know if we have plateaued or just had a slow quarter?
A slow quarter shows up in bookings while the leading indicators hold. A plateau shows up earlier and higher in the funnel: fewer first conversations, longer cycles, more deals lost to no decision. If new pipeline created has been flat or falling for three quarters while revenue looks fine, you are looking at a plateau being masked by existing customers.
Is churn or acquisition the bigger problem?
Check net revenue retention before you touch acquisition. If it is under 100 percent, every euro you spend on new customers is partly refilling a bucket with a hole in it. Fixing retention is almost always cheaper than buying growth to cover it.
How long does it take to break out of a plateau?
Retention and onboarding fixes show up within a quarter. Anything that depends on demand, positioning, content, a new channel, needs two to three quarters before the numbers move, because you are rebuilding awareness that decayed while you were not looking.
Can we grow out of it by hiring more salespeople?
Only if the plateau is genuinely capacity-driven, which is rare. Adding sellers to a market that no longer knows who you are produces more activity and the same result, at a higher cost. Fix the reason conversations are harder to get first.
Related reading: B2B SaaS metrics that matter, 10 growth strategies for B2B tech startups, Revenue acceleration.
This article is from the Funky Marketing blog archive. The work continues at Funky Enterprises: positioning, demand generation and commercial systems for B2B companies.
If you want to look at your own commercial system, book a 30-minute needs assessment. New conversations with people who build revenue are on the Funky Enterprises Show.
