Business owners run into unexpected sales slumps all the time. When this occurs, though, it’s important to have a solid game plan that will identify the root cause of why customers are leaving so you can take appropriate measures to win them back.
As a business owner, you're always monitoring your customer base and sales figures. Assuming you've been in the industry for a while, these numbers are usually in a range that you would expect – perhaps some lows coupled with some highs. However, one day you might wake up to find that your sales volume has shrunk and that your clients are leaving. If this moment arrives, don't panic. Here are six things you should do to remedy the situation.
1. Identify any recent changes
This should be your first priority. Ask yourself if you've changed any elements of your business that could be impacting your sales or client retention. Often, it is the smallest tweaks that make the largest differences. Even slight changes in how you package a product or what time of the day you display advertisements can drastically affect your bottom line. Creating a list of possible culprits and then assessing each factor one by one is key to bringing back clients.
2. Study your analytics
Of course, you probably discovered this decline in performance by analyzing your data to begin with, but now it's time to dive in for a closer look. The first step is to identify when exactly your clients began to leave. Did the drop in sales begin abruptly this week, or has it been a gradual downward spiral since the start of the month? Learning this will help narrow your search.
The next step is to identify trends occurring around the time sales started to decline. Check Google Analytics, social media graphs and advertising statistics to see if there are any trends in the data that might indicate what the underlying problem is.
3. Check on your competitors
Declining sales and shrinking customers aren't always attributable to what you're doing wrong. Sometimes it's about what your competitors are doing right. Perhaps they changed their website layout, or perhaps they released a new and improved version of their product. Personally, I have a list of all the crucial information about my competitors that I can reference in situations such as these. At the very minimum, you should be keeping track of the following information from your competitors:
- Their products and pricing, along with any package deals and discounts they offer
- A breakdown of where their website traffic is originating from
- Their marketing strategies and ad campaigns
- An estimate of how much money they spend on advertising and a breakdown of how they spend it
- Search rankings for the most important Google keywords in your industry
- Their social media presence
Competitors are changing their business formulas all the time. This makes it difficult to identify which of these changes may be the real reason behind why you're losing clients. Having been through this experience myself, I found that the most helpful thing to do first is to identify which of your competitors are doing well. For example, if you see a company skyrocket in website traffic during the same month you are losing visitors, then this should obviously cause alarm bells to ring. Services like SimilarWeb and Alexa work wonders for identifying the website traffic of your competitors.
4. Ask your customers
What better way of identifying why your customers are leaving than to simply ask them? For some businesses, it can be easy enough to just call clients and ask them for feedback. For others, it might be more appropriate to conduct surveys or exit interviews. Many customers will voice their opinions and express the reasons for their dissatisfaction. However, if you aren't receiving any responses, it may be worth it to give them an incentive, such as free goodies, gift cards or other nice perks.
5. Call a business meeting
When the problem is too big to solve on your own, you've got to call in the Avengers, or in this case, your management team. Despite being privy to information that not everyone in the company is aware of, the CEO can often be blind to customer issues that are obvious to everyone else in the company. This can be due to many reasons. For one, CEOs tend to focus on big-picture issues as opposed to dealing with customers on a personal level. In addition, when CEOs interact with clients, often it is in an artificial setting that doesn't apprise the CEO on how customers truly feel. This is why it’s so important that your employees chime in with their thoughts on what the underlying problem might be as well as how to fix it.
6. Halt advertising
While it's vital to diagnose the underlying cause of why you are losing sales and customers, it's also important to stop the bleeding in the meantime. As business owners, we're all too familiar with how expensive advertising is and how difficult it is to yield a profit after accounting for marketing costs when all is said and done. There's a good chance that with the decline in sales, your conversion rate simply isn't high enough to make advertising worth it anymore.
There are also other reasons to stop advertising, even if your conversion rate exceeds the threshold for profitability. First impressions are often very hard to change, and many businesses lose potential customers by conveying a bad first impression. At the same time, the hassle of dealing with new clients can detract from your efforts toward finding the root cause of why customers are leaving you. It's often best to focus all of your efforts on fixing this problem first before going back to business as usual.