What red flags should I look for when trying to grow my business?
My sales have been gradually declining over the last 3 months. I've tried going back through my records to spot trends, compare prices, etc. anything to try to pinpoint the cause. I'm not sure what red flags or indicators to be looking for. Any advice?
The first thing I will do is to ask am I still relevant. Checking on actual patterns are telling you what had happened in the past, you need to try to see any signal that indicate you are no more relevant. Your website looks impressive, but are your customers still in that buying mood?
There is little doubt in selling techniques.
I would suspect the change in market trend is the main culprit, e.g.:
1. banking facilities
2. real estate demand and general price trend
3. local economy as well as regional
4. global buying habit if your business include overseas customers (this will also mean the financial conditions of the overseas customers)
5. the quality of the strategic partners.
Yes, talk to your key customers and strategic partners to check on the buying trends do help a lot.
1. quality of your salesmen and sales team (include the leader)
2. compensation plan
3. review marketing strategy
4. is the service commission charge too high?
5. did you change anything internally in the past 3-5 months?
6. is there an over reliance of digital marketing?
Finally, you will able to conclude whether you are still relevant ...1. is your business formula still attractive to customers?
2. are your services still fit current and near future market?
Danielle, as you know this is a symptom of an underlying illness. You are right to be seeking the cause and if you find the likely culprit(s) great. Usually the apparent answer is the wrong one however. This results from the fact that factors within and outside your business are inter-dependent (as Kurtis has pointed out). A great place to start is to establish whether this really is a problem or perhaps a seasonal condition that impacts your industry, for example. I'd be happy to chat with you to discuss a bit deeper if you feel it might be of value to you.
Without understanding your current business or product, it's hard to pinpoint. If your product is only interesting to a very small group of people - you may have already saturated your target market.
Or - it could be the quality of the product. What is the trend of returning clients?
Or - it could be that you need to incorporate a client referral program or loyalty program -- to entice your happy clients to do the marketing for you.
It's hard to say.
Talk to your past clients that have not returned to you -- to see why they are not returning.
Talk to your current clients to see if a client referral program is of interest to them.
Talk to all your clients to see if a client loyalty and rewards program would be of interest.
Ask your happy clients for testimonials.
Have you been following up withyour customers? Many businesses lose their edge by neglecting their customers after they obtain them. Has there been a change in your industry or environment that makes your business less unique/desirable or competitive?
I'd suggest talking to your customers. Also what is your primary way of getting new customers? you might look at that as well and examine what you are doing differently or what you might need to do differently.
With experience you should be able to see how sales flow from closing some percentage of opportunities generated from some number of prospects that you mean via some number of calls or referrals or lead follow-ups.
If you don't have any sense of these numbers, that might be the red flag you're looking for.
Do you have any sense of where things are falling off? Closing percentage? New prospects? Number of leads or referrals coming in? Anything?
I feel like there's something missing from your question. How long have you been in business?
The first step you should take is to ask feedback from you client,
the second should be competitor analysis, see how your competitors are performing in the field, and not to forget to examine the trends of the market
the third you should think can I do something new apart from what is already in the market, maybe some new promotional or pricing strategies.
Below you will find most of reasons why your sales activities did not produce the expected result on the bottom line and your cash flow. These can also be used as a guideline when you need to set early warning signals and preventative measures.
If you need more information or help actually doing this, you can send me a private message and I will respond.
There has been an under achieved actual versus sales forecasting over recent times; either the sales target was unrealistic or sales staff under performed
Your business has experienced a drop in market share over the last two years
There has been bad publicity of your company in the news and press
There has been negative trends in your industry
The appetite for your product and services have declined due to a new entrant into the market
The quality of your products and services have deteriorated
Either your pre or post sales efforts have deteriorated which sends out the message that your customer no longer comes first
Pricing for margin
Your pricing strategy has been ineffective leading to a reduction in your gross profit margin
You have not been able to negotiate better prices with your suppliers
Pricing for overheads
Your pricing did not take into account the planned costs of running the business
Your sales forecast growth rate has been in excess of the industry expected growth
There has been loss of key personnel in your sales department
There has been a loss of key customers who gave you repeat business or you customer retention strategy is weak
The costs of new customer acquisition is greater thereby depleting your gross profit margin due to offering them higher discounts
Sales have been increased with customers who are late payers that impact negatively on your cash flow
Sales have increased with new customers who have a bad credit rating
Danielle, I looked at your profile blurb. It seems like it is the very nature of your business not to have repeat sales - You are staging homes for sale, correct? Someone commented that you should look at market conditions. What is the real estate market like in your area of Florida - if times are very tough, you will have to show potential customers that they will sell faster, sell for more or both, and quantify it to show that it will be worth the money and effort. Look to see if the time on market is reduced when you participate, or if your customers are selling closer to their asking price. Consider saying many nice things about the clients' stuff, and suggesting that you can help them make the most of their stuff in their new place. Three months is actually a pretty short period in the real estate business.
Are your customers not reordering from you? If so, send out a survey right after purchase or call them and ask them how was their experience with your company. This will let you know immediately where the problems are in your business.
It could very well be a problem on your website when people order.
Are you constantly getting new customers? What are you doing to hang on to the customers you do have?
I suggest you start with those few items mentioned above.
Who is your target market and ideal client? What do you sell?
What metrics do you have in place to monitor what is going on?
What marketing avenues do you use? Who writes the copy for those marketing messages? Could the message be the problem?
Do you keep in touch regularly (at least weekly) with both clients and prospects? Only 1% of your prospects are now buyers. You also need to keep in touch with the other 99% so when they are ready to buy, they will come to you first.
Have you developed a business plan? If so, you need to revisit your marketing strategies, and specifically your strategic milestones. Most of the time when the initial entrepreneurial strategies stop working it is because they weren't sufficiently flushed out in a business plan to begin with.
How long have you been in this business? Are there seasons in your market?
In my experience you need to review your business fundaments and probably look at a partial reshape
Do a competitive overview, see what your competition is doing. It could be as simple as pricing the same item a few cents cheaper that can be impacting your business.