Q14 / REVENUE
Problem 9
Am I running out of customers?
Your market is smaller than you think.
TAM tells you who could buy. This tells you who's looking right now - and whether your leads are low because of your marketing or your maths.
- Time: 3 MIN
- Who: SOLO
- Stage: STAGES 2-3
- Access: FREE
Find my active customers
The short answer
How many customers are actually in my market? Start with the total market, split it into greenfield (no solution) and switchers (using a competitor), divide switchers by how often they change supplier, then spread the annual buyers across the year. Active buyers = monthly inflow x sales cycle (months). If that number isn't 3-4x the leads you need, widen your market.
How it works
- Enter your total market and existing customers.
- Split greenfield vs switchers and how often people switch.
- See your active buyers per month - and how that compares to your plan.
Worked example
3,500 UK pizza shops. A third use pen and paper; two thirds use a competitor and switch every 5 years. About 1,620 buyers a year, or ~135 a month. With a 1-month sales cycle, there are only ~135 active buyers at any time - not 3,500. At 10% conversion and £100/month, that's 64 months to £1M ARR.
FAQ
Why does sales cycle matter?
Slow deals stack up. A 6-month cycle with the same inflow means ~810 active buyers in the pipe at once.
Is this the same as SOM?
No. SOM is who you could reach. This is who's actually buying right now.
What if the number is too small?
Look at adjacent verticals or new geographies - but that's back to Stage 1 for that market.
From the book
Problem 9 - Am I running out of customers?
Use this next
Find my active customers