Performance Plateau Report
How do you anticipate the two most common sales plateaus?
What does this report measure?
This report measures:
- Performance plateau: when you’ve exhausted your pool of in-market buyers but have no long-term growth engine
- Penetration plateau: when you’ve exhausted your serviceable addressable market (SAM) and need to broaden your offer to compete for more of your total addressable market (TAM)
How can I use this report?
This report will help you:
- Anticipate sales plateaus before they come so you can plan accordingly
- Secure buy-in from finance for long term demand and brand activity by proving short-term plateaus
- Gut check sales and revenue goal pacing by ICP, product, region and/or price
- Discover products or segments that have no growth potential with performance marketing alone
Performance Plateau Overview
There’s two types of sales plateaus every marketing org needs to plan for:
- Performance plateau
- Penetration plateau
Performance Plateau
A performance plateau, coined by the magnificent Tom Roach and Dr Grace Kite, happens when brands over-invest in short-term, in-market activities at the expense of reaching and influencing out-market buyers in advance of purchase.
As you capture more and more in-market demand, and as more and more competitors enter the market who do the same, and as your sales goals get bigger over time, eventually you’ll exhaust your limited pool of in-market buyers and hit a sales plateau.
To get out of a performance plateau, brands can add new products or segments to their in-market program (though that doesn’t change that their first product or segment has plateaued) or make long-term investments in building future demand, pipeline, and revenue by targeting their biggest pool of potential buyers: out-market buyers.
To identify a performance plateau using this report, use the ‘sales by product line’ chart below. Then look for the point on the chart where the line(s) start to crest. That’s your plateau point- and an indication that there’s no more further growth from performance marketing alone.
Penetration Plateau
A penetration plateau, on the other hand, happens for one of two different reasons:
- You mistake rational demand activity for emotional brand activity, and fail to reach all potential out-market buyers you target
- You’ve exhausted your serviceable addressable market (SAM) and need to add a new product or segment
In the first scenario, brands launch out-market demand campaigns focused on the rational story of the problems they solve and the solutions they’ve built.
But any conversation about today’s problems and solutions is inherently built for the people who experience those problems now.
All good. But what about:
- People who will experience those problems tomorrow?
- People who don't sit in your narrow ICP right now but will when you broaden it?
- People who know their problems intimately but have no means to solve them at the moment- so they don't listen?
- The buying committee?
- The massive heap of potential buyers who don't take their careers as seriously as us marketers so they don’t obsess over educational content about their jobs?
Any talk about problems/solutions is inherently more rational in its delivery, more narrow in its reach, and less memorable in its effect than true brand activity.
Consequently, though you’ve managed to make investments in future buyers, you’re only reaching a fraction of the future buyers you could reach if you also incorporated emotional brand building (broad reach, universal relevance, emotion over logic).
As for the second scenario…
In this case, you’ve built a short-term and long-term marketing engine, and you’ve balanced brand with demand and acquisition, but you still see declining sales because you’ve outgrown your service market (SAM).
In other words, you’ve run out of market to penetrate and need to expand your buying pool once again.
In either scenario, you can use the ‘sales by ICP,’ ‘sales by region,’ or ‘sales by pricing tier’ to identify which target segments you’ve started to exhaust.
To identify a penetration plateau, use one of the reports below to track historical sales by pricing tier, ICP or persona, product, and/or region.
For example, track sales plateaus by pricing tier:
Track sales plateaus by ideal customer profile (ICP) segment:
Track sales plateaus by product:
Track sales plateaus by region:
Frequently asked questions
Where is the plateau on the line chart above?
A plateau happens when the line begins to flatten. This is a sign of declining growth rate and what could be an impending sales plateau. If you’re tracking sales by segment historically, you’ll see the flattening coming before it’s too late.
Is it really this easy to anticipate a plateau?
No. Not at all. Loads of economic, market, customer, and business conditions factor in. However, this is the simplest way to gut check a plateau on the horizon.
Learn more about how HockeyStack helps marketing, revenue, and sales teams surface and action insights like the ones in this template by exploring the interactive demo or booking a virtual demo.
