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Back to Black: How to Combat a Decline in Sales

Jennifer Post
Jennifer Post
business.com Contributing Writer
Updated Feb 02, 2022

A business could face declining sales for several reasons. Here's what one company did to turn things around.

Marble Slab Creamery has been in business for almost 40 years, with locations in more than 15 countries worldwide. To reach this level of success, it had to learn how to adapt at the first sign of trouble.

One such instance occurred a few years ago. For roughly five years, Marble Slab Creamery experienced a significant sales decline. The company knew it had to do something to turn the business around. The strategies it implemented are helpful for any business experiencing a downturn. 

Before we look at those strategies, though, let’s look at why your business’s sales may be declining.

Reasons for a decline in sales

Several forces can conspire to weaken a company’s sales. Here are a few examples.

Sales team issues

Sales team missteps can be detrimental to your company’s bottom line, including hiring the wrong sales associates, failing to provide them with training opportunities, and providing poor compensation or incentive packages. When you’re building a sales team, hiring the right people can make or break your business.

Conducting a sales audit is a way to identify sales and marketing weaknesses, because it reviews sales team members’ individual contributions.  

“The actual work completed by the sales team is crucial to your sales audit,” said Amit Vyas, CEO of Nexa. “This information needs to detail the interactions between the sales team and the marketing department, as well as the prospective customers.”

Bottom LineBottom line: Creating a successful hiring process and retaining top talent on your sales team is crucial to success.

Senior-level or brand missteps

Hourly or salaried employees aren’t the only causes of sales trouble. Darren Nix, founder of Steadily Landlord Insurance, says a sudden threat to a company’s reputation – or a threat to a prominent company figure’s reputation – can lead to a sales decline. These reputation hits could come from an executive’s heinous actions or society’s recognition of culturally insensitive branding. This occurred when Uncle Ben’s, a rice company, came under fire for racial stereotyping in its name and logo. 

“Many shoppers care about what their spending represents, and that will only continue to trend upwards,” Nix said.

Lackluster reporting

Sales reports are critical tools that help management understand a business’s fiscal health and profit trends. When your reporting is lacking, your data may not yield critical insights. Vyas said that with deeper and more enhanced reporting tools, such as what you’ll get with CRM software reports, you’ll end up with more useful insights and data. 

“The tools used for tracking need to effectively capture information and be updated,” Vyas said. “This is where having robust analytical software, often included with CRMs, can be helpful.”

Did you know?Did you know? CRM metrics are critical because they establish benchmarks for your company, helping you understand things like customer churn and rate of renewal.

Seasonality

Reduced interest in your products or services due to seasonality is another possible reason for a sales decline. Ryan Craver, CEO and co-founder of Mallary by Matthew, says that all companies are prone to seasonality – whether it’s a clothing company suffering through the ebbs and flows of the retail calendar or a pool chemicals company that has an inherent high and low season.

When you’re suffering from a seasonal sales decline, it’s best to focus on what you can sell. “The best one can do is push products that are seasonally appropriate, while simultaneously marketing any and all products that are season-agnostic,” Craver said.

Poor customer service

Subpar customer service is perhaps one of the most common reasons for a sales decline. Customers don’t want to shop at places where they don’t feel welcome or deal with rude employees. 

“Customer service is key to providing an excellent customer experience, which directly affects sales,” said Alex Mastin, founder and CEO of Home Grounds. “If a company experiences a poor Customer Effort Score and a poor Net Promoter Score, sales are likely to make a steady decline as satisfaction depletes.”

This combination of low sales and an indifferent sales staff can create a vicious cycle: Lower revenues prompt a business to cut down on staff training, thus alienating even more customers and further impacting the bottom line. 

How to combat declining sales

Many companies have found themselves in a predicament where sales are declining, especially after a recession. These are three ways to combat a sales decline, no matter what circumstances you’re experiencing.

1. Improve your customer service.

No matter what your business is facing, improving customer service is key to boosting sales. For example, to increase sales, Marble Slab Creamery set its sights on becoming better than the competition by improving the overall customer experience and boosting customer loyalty.

In his book The Thank You Economy, Gary Vaynerchuk explains how to adopt a company culture that genuinely values the customer. “You have to be no less than a customer concierge, doing everything you can to make every one of your customers feel acknowledged, appreciated, and heard. You have to make them feel special, just like when your great-grandmother walked into Butcher Bob’s shop or bought her new hat, and you need to make people who aren’t your customers wish they were.”

A lot goes into ensuring customers have the best possible experience. Employee satisfaction is a big one, but proper training and appropriate compensation contribute to a team of employees who genuinely want to present the best possible experience for their clients. 

FYIFYI: Customer delight is the new customer service standard, focusing on exceeding client expectations and boosting brand loyalty.

2. Increase the value, not the price.

Another way to combat declining sales is to think about how you can bring more value to the customer through the way you price products. This may sound absurd at first, but Marble Slab Creamery swears by it.

Like many other ice cream shops, Marble Slab previously weighed each customer’s ice cream to determine the price. The more toppings a customer added to their ice cream, the more it weighed, and the more it cost. Because of this method, customers added fewer toppings because they didn’t want to spend more money, ultimately leaving them slightly disappointed with their purchase.

To provide more value to the customer through pricing, the creamery decided to introduce an unlimited mix-ins campaign. Instead of paying more for the weight of each topping, customers paid only a flat rate based on the ice cream cup’s size. Customers could get all the toppings they wanted without worrying about the price, leaving them more satisfied than ever with their purchase.

After the success of restructuring prices, Marble Slab Creamery decided to go a step further and provide even more perceived value. Instead of charging customers more if they wanted their ice cream in a waffle cone, the creamery offered free, fresh-baked waffle cones as part of their purchase. 

Bottom LineBottom line: Everyone loves getting something for free; it drastically improves each customer’s experience. Think about ways your customers could get more value from their dealings with your business.

3. Refocus your advertising strategy.

The final adjustment Marble Slab Creamery made was to focus advertisements on how its ice cream is homemade in every store, using only premium ingredients. While higher-quality ice cream was always part of the company’s business plan, many customers had no idea the ice cream was freshly made right in the store. 

By focusing ads on the product’s homemade aspect, customers realized they were getting a much higher-quality ice cream than competitors offered, and they valued the product more.

Can your business reverse a sales decline?

While the strategies listed here may sound great in theory, you may wonder whether they’d work in the real world. For Marble Slab Creamery, these methods were successful. After two years of implementing these improvements, Marble Slab experienced a 5.8% increase in same-store sales, a 4% increase in transactions and a 9.8% increase in average unit volumes sold.

Your business could also see improvements by implementing similar measures. Ask yourself these questions:

  • Can you bring more value to your customers by restructuring prices?
  • Can you offer a free product to increase the perceived value of your product?
  • Is there an aspect of your product that is being overlooked and needs to be advertised?
  • How can you improve a customer’s experience and beat your competition?

A sales dip doesn’t have to be a dire experience for your business. Adapt by properly training employees, adding value to your products or services, and restrategizing your marketing efforts.

Image Credit:

fizkes / Getty Images

Jennifer Post
Jennifer Post
business.com Contributing Writer
Jennifer Post is a professional writer with published works focusing on small business topics including marketing, financing, and how-to guides. She has also published articles on business formation, business software, public relations and human resources. Her work has also appeared in Fundera and The Motley Fool.