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Updated Apr 10, 2024

Back to Black: How to Combat a Decline in Sales

Learn how to handle a business downturn with these strategies.

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Jennifer Post, Senior Writer & Expert on Business Strategy
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Marble Slab Creamery has been in business for 40 years and has 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 increase business sales. The strategies it implemented are helpful for any business experiencing a downturn. 

However, before we look at those strategies, let’s examine why your business’s sales may decline.

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 harm 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 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 member’s 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 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 customer relationship management (CRM) software reports, you’ll have more valuable 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. [Read related article: The Best CRM Software]

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 with 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 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 big, but proper training and appropriate compensation contribute to a team of employees who genuinely want to present the best possible experience for their clients. 

FYIDid you know
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 consider how your product pricing can bring more value to the customer. This may initially sound absurd, but Marble Slab Creamery swears by it.

Like many other ice cream shops, Marble Slab Creamery 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 introduced 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 successfully 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.

Another 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.

4. Invest in sales training.

Your employees may know your product, but do they understand how to sell it? If your onboard training needs improvement, consider returning to the basics of building a sales process

Look at your company mission and what processes help you stand out. While you focus on training new employees, don’t forget your veterans. Otherwise, your tried-and-true employees might rush through the sales process and not give customers the best experience possible.

If you are still experiencing a sales slump after revised training, you should boost morale. While motivation is essential to increasing sales, automating tasks and investing in new technology can remove repetitive tasks that cause your team burnout.

5. Analyze your competitors.

When you think about your competitors, ask yourself the following questions:

  • Do your competitors have a superior product or service?
  • Is your pricing too high (or too low)?
  • Do you have enough data and insight into your target audience?
  • Could your purchasing process be more streamlined?

While doing an internal analysis is wise, remember the advantage of considering the competition. You will likely have direct, indirect and future competition. Taking note of what works for your competitors and what does not can help you trim your marketing budget, understand your unique business characteristics and retain valued employees.

Building a relationship with indirect competitors offers a group of mentors when times get tough. Meet regularly to “check-in,” talk about your pinch points and celebrate your successes.

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 percent increase in same-store sales, a 4 percent increase in transactions and a 9.8 percent increase in average unit volumes.

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.

Julie Thompson contributed t0 this article. Source interviews were conducted for a previous version of this article.

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Jennifer Post, Senior Writer & Expert on Business Strategy
Jennifer Post brings a decade of expertise to her role as a trusted advisor for small business owners. With a strong foundation in marketing, funding, human resources and more, she teaches entrepreneurs about the software and tools necessary for launching and scaling successful ventures. From email marketing platforms to CRM systems, she ensures businesses have the technological edge they need to thrive while also sharing best practices for everyday operations. Post's recent focus on risk management and insurance underscores her commitment to equipping business owners with the services needed to safeguard their businesses for long-term success. Her advice has appeared in Fundera, The Motley Fool and HowStuffWorks.
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