If you find that your business has plateaued or that sales have dropped off then it’s vital to understand why this has occurred. Not establishing the root cause of the problem and simply throwing money in areas where you guess the problem lies won’t help the matter and will only result in wasted spend.
We’ve looked at a few areas that could be affecting your business along with how you can overcome these to grow your sales further and develop a profitable marketing strategy.
It’s not always a bad sign when the growth of your sales comes to a halt – it can actually result from your business topping itself out to the extent where you aren’t able to handle any more sales. Reaching capacity can come in a number of forms. You might find yourself lacking the required space and equipment to produce a higher quantity of goods, or you might find that you don’t have enough staff to deal with any extra enquiries.
If you can establish that this is in fact the reason that your sales have gradually slowed down then you should look to see if it’s worthwhile increasing your capacity. Before scaling up your capacity be sure to identify how much extra demand you have to cater for – if the remaining market isn’t huge then increase capacity accordingly, there’s no point in purchasing a load of machines or hiring tens of staff if they aren’t all going to be needed.
On the rare occasion you might even find that you’ve fulfilled market demand for key target audience. This is likely to only really impact businesses operating within a very niche market or within a localised area. In circumstances where this may be the case you’ll need to look to increase your scope, whether that be in diversifying your offering or extending the region you cater for.
Your sales process
Another area which could need looking at is your sales process. A decline in sales could also result from an issue somewhere within your sales process and it’s vital for you to establish exactly where it is in order to deal with it accordingly.
Many typical sales processes will involve multiple stages and you’ll have to assess this entirely – from generating enquiries to converting them to retaining your clients. Here’s a quick breakdown of how dealing with each differs.
- Generating enquiries – If you find that the number of enquiries you’re generating has declined then it’s time to establish why. Look at which channels that have been the most productive in terms of generating leads in previous months – have you reduced spend in your most effective areas? Have you looked at improving the manner in which you are utilising these areas? For example, if your website was consistent with generating the most leads but now no longer is then see what’s changed – for example you might have dropped in Google search results making it harder to find. There are any number of variables that can impact your level of enquiries however we hope this gives you an idea of how looking into the smallest detail can help to establish where the problem lies.
- Converting leads – So you might find that you’re consistently generating the same number of leads, in that case look at your conversion rate. Once more if your conversion rate has dropped then you need to identify why. Your conversion rate can be impacted by things such as your website and even your staff if the completion of sales involves them. This would mean that either the landing pages of your website need optimising or sales staff could need retraining to improve their sales skills. Alternatively, it could mean that the enquiries you are generating aren’t quite as relevant and motivated to purchase as you need them to be. In these cases you need to establish a way of bringing in better leads – for example using more detailed pay per click (PPC) ad campaigns on Google.
- Customer retention – Sales can also drop from failing to retain your existing customers and dealing with them appropriately to encourage them to purchase. While the figure is hard to nail down, it’s widely accepted that it’s 4-9 times more expensive to acquire a new customer than it is to retain an existing one – so it’s safe to say this is an area you should certainly be investing time and resources in. The effective use of a Customer Relationship Management (CRM) system can help to maintain regular communication with existing clients and keep your business at the forefront of their minds for those occasions when they do need your product or service.
A slump in sales can also be down to factors outside of your direct control. Things such as market trends evolving over time and an increase in competition can also prove detrimental to your sales. In these situations you’re forced to adapt to your business environment (however that might be depending on the factors involved) to stand the best chance of remaining competitive. However, to prevent cases such as these altogether it’s better to be proactive as opposed to being reactive. Developing a thorough marketing strategy which includes a detailed PEST analysis (which takes into account potential external factors) will allow you to anticipate potential changes in the market environment and prepare better for them.
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