By Lior Ronen (@Lior_Ronen) | Founder, Finro Financial Consulting

Clients are the heart of every business. Clients' payments pay the bills at the end of the month and pay the salaries. Clients are the basis of every business' pyramid. Without any clients' you have no business.

Capturing the user base forecast correctly is essential.

By essential, I don't mean that you should forecast 2,564 new users next month, and any other number indicates that your forecast is garbage. No.

In this case, the process of building the user base forecast is no less important and sometimes even more important than the actual figures are at the end.

Where to Start?

A business is nothing without clients, and acquiring clients sets the tone for the business's growth.

The initial step of building a user base forecast is looking at the customer acquisition process and breaking it down into small bits and pieces that you can control independently.

In this post, I'll cover the process of building the user base forecast from the customer acquisition in an understandable and straightforward language and avoid (as much as possible) any "pro" terms and acronyms.

You should start any user base forecast by mapping how the business acquires new clients.

Two Ways To Acquire New Clients

There are generally two ways to acquire new clients in any business.

The first way is passive, where clients come to your website or landing page, sign up for the service, or leave their details so you can return to them. This might sound obvious and simple, but this is the result of three different marketing strategies: Search Engine Optimization (SEO), Search Engine Marketing (SEM), and Social Media Marketing (SMM).

The second way to acquire new clients is by actively contacting potential clients. You don't just randomly start asking people to sign up for your service or buy your product. That wouldn't be very efficient.

Instead, you should contact two types of people with a high probability of signing up for your service. The first type includes people signed up for a trial but hasn't joined the paid plan (Inbound Sales). The second type comprises clients you have identified according to specific characteristics and cold-emailed them (Outbound Sales).

Now let's see what each sales channel requires to build that user base forecast.

Sales Channel #1: SEO

SEO is the art and science of persuading search engines such as Google, Bing, and Yahoo, to recommend your content to their users as the best solution to their problem.

In a nutshell, when marketing professionals talk about SEO, they talk about four aspects:

• Technical SEO: how fast is the site, how secured it is, how friendly it is to new users.

• On-page SEO: how well the site helps search engines understand the content and the context.

• Content SEO: The quality of the article matches the search intent and solves the searcher's problems.

• Off-page SEO: the authority of your site and how many other sites link to it.

SEO is usually a long-term marketing strategy that is considered by many as a long-term investment. You plant the seeds at the beginning by building your site's content, authority, and technical aspects that will later turn into high-ranking pages on search engines and generate relevant leads.

When looking at the number of new clients the business acquires from the SEO activity, you need to consider these elements:

• The number of searchers reviewing every piece of content (impressions).

• The rate of people who decided to click on every piece of content in the search engine results (click-through rate or CTR).

• The rate of people who signed up for the service or trial after visiting the site (sign up rate).

Sales Channel #2: SEM

SEM is a strategy using paid tactics to gain visibility on the search engines. It is also known as PPC (pay-per-click).

When forecasting how many new clients you acquire through search engine ads, you're looking at the effectiveness of the ads, so you need to consider these aspects:

• The estimated monthly SEM budget.

• The estimated cost-per-click (CPC) of the relevant keywords.

• Budget / CPC = clicks per month.

• The rate of people who signed up for the service or trial after visiting the site (sign up rate).

Sales Channel #3: SMM

SMM is the use of social media platforms to connect with your audience to build your brand, increase sales, and drive website traffic.

The forecasting aspects of SMM are similar to those of SEM except the CPC.

There are 8 to 10 primary social media platforms, and each one shows a different cost per click for a specific keyword, so you need to research the platforms that are relevant for your case.

The relevant aspects are the same as in the SEM case:

The estimated monthly SEM budget.

• The estimated cost-per-click (CPC) of the relevant keywords.

• Budget / CPC = clicks per month.

• The rate of people who signed up for the service or trial after visiting the site (sign up rate).

Sales Channel #4: Inbound Sales

Inbound sales is a sales strategy that prioritizes the specific needs of potential buyers who have expressed interest in a product. An inbound sales approach helps you identify potential buyers looking for a solution to a problem, and it allows you to take the time necessary to convince them that your product will meet their needs.

To forecast inbound sales effectiveness in client acquisition, we need to consider these elements:

• Percentage of potential clients who left the service after the trial period or didn't join a paid program. These are the potential clients the inbound salespersons will contact.

• Win rate. The rate of leads converted to paying customers after the inbound sales team got them.

Sales Channel #5: Outbound Sales

Outbound sales is a sales strategy that focuses on prospecting leads who have not already expressed interest in your company's product or service. Sales reps first initiate communication with potential customers in the outbound sales process, often through cold calling or emailing.

Outbound sales is a more aggressive sales strategy where the seller seeks to get their general sales message out to a wide net of potential customers rather than personalizing a message for prospects already considering a purchase.

To forecast inbound sales effectiveness in client acquisition, we need to consider these elements:

• The number of outbound sales representatives.

• The number of cold calls/emails per sales rep per month or week.

• Win rate. The rate of leads converted to trial or free plans.

• Conversion rate. The rate of leads converted from a trial or a free program to a paid plan.

What Else Should You Consider?

When aggregating the bottom line of every sales channel above, we'll get the total number of new users.

However, users also leave the service, not only join, so you need to consider the churn rate for your service. If you don't have any historical data, you can use an industry average - in most cases, that will be good enough.

The other side of the churn rate is the renewal rate or the percentage of clients who renew their subscription after the subscription period ends.

You can use churn rate or renewal rate, depending on your business model, but you shouldn't use both of them in most cases.

Some businesses have a few different price plans to choose from, and clients can move between these plans. So you should also consider upgrades and downgrades.