What To Do When Sales Drop
If you are in a situation where your sales have dropped or you can’t find stability in your profit margins you need to be reading this. Nobody wants to think about their business going badly, the great thing is that if you take action early, even in the face of a recession, you can gain strength and take your business to the next level of success.
No matter where you are at, no matter how low, recovery is right around the corner, you just need to know what aspects of your business to reinforce and which to tear down.
This is something I really get fired up about because I was there. I had a successful business that plummeted and went from 6-figures to massive debt – in the blink of an eye. I didn’t ever quit on my business. My perseverance turned things around and I leapt to 7 – figures and was back in the game.
I got into business coaching to help other business owners avoid the mistakes that had me falling over my own feet and crashing, but if you are in that sinking boat of sales drops and you’re learning business the hard way – there is still a lot to fight for.
This article will show you what to do when sales drop, to not just regain your initial profits but to power on to new heights.
What Do You Do When Sales Drop?
With so much change in recent times, both political and commercial, sales fluctuations have become a common challenge for businesses of all sizes. A drop in sales isn’t the time to bunker down and hope for the best, it’s a signal for you to take immediate action, not only to reverse the decline but also to reassess business strategies, processes, and customer relationships.
It’s vital for business owners and sales teams to recognise the early symptoms of slumping sales and act fast to maintain their competitive edge.
Having consistent and increasing sales is not a pipe dream or business extravagance, it’s a key growth area of starting your own business and running it successfully.
What’s Causing Your Sales Slump?
A drop in sales can be caused by a number of factors. Sales can decrease unexpectedly, as part of a seasonal flux, or, as with my early business experiences, costs can rise overnight! There are a multitude of other reasons for poor business performance, which I’ll go through with you here.
Even though this is a highly emotional time in your business, stay calm. You need to put your detective hat on and figure out what’s causing it. Exploring unconventional methods and adjusting pricing and marketing strategies can lead to a turnaround in sales performance.
1. Recognise the Symptoms
Determining the root cause of declining sales can be a complex task. Dig as deep as you can; surface symptoms may be covering a much bigger problem hidden in your systems or business plan.
Understanding how to identify a drop in sales is crucial for addressing the situation as soon as possible. Once you have a list of symptoms, see if you can identify the root cause behind them. You may need an outside expert to give you a fresh take on things.
2. Diagnose the Root Cause
Different reasons can affect sales performance, so knowing the cause helps you apply the appropriate solution. Factors such as ineffective marketing, poor customer support, and constant shifts in market demands can all contribute to a slump.
Monitoring various metrics and sales figures regularly can help determine whether there is an issue.
Here are some common reasons behind your slump:
- Customer needs
Customer’s needs change, as well as their expectations of what is valuable and supportive. If you stick to the same method of operation for too long you will see a drop in customer satisfaction and repeat sales. Stay in tune with your customers’ needs and monitor their changing preferences. It is essential to ensure that your product or service offerings remain relevant and that your target audience is aware of how you are adapting to support them.
- Poor marketing strategy
A weak marketing approach can result in declining sales. Track the effectiveness of your marketing channels, including social media, email marketing, and advertisements to ensure they are reaching the appropriate audience and converting them into customers.
This one is important to do even if your marketing has been strong in the past. There may have been a shift you missed or a fork in the road you took by accident. Revisit and examine what’s happening closely. Just because something used to work extremely well doesn’t mean it’s going to track along like that for your company’s lifetime.
Keep monitoring and continually optimising.
- Lack of product differentiation
When your products or services are too similar to competitors, your potential customers may find it difficult to justify paying your premium. Ensure your products or services have unique features that differentiate and show your value.
- Increased prices
This one hurts because it happened to me. Overnight my costs exploded but I couldn’t pass that on to my customers in one hit, there was no way that could be justified. If this is what you are experiencing you might need to revisit your systems and find ways to work smarter. Some industries can also get creative to repackage their services or products to make them more cost-effective to bypass the price spike.
- Bad reviews
Social proof is wonderful, provided the feedback is positive. As well as getting burned for making mistakes as you navigate the world of business, there are unsavoury characters out there who leave bad reviews just for fun, or to blackmail you. True or not, a bad review will sway potential customers, which is why it’s so important to be proactive about asking for positive feedback and great reviews as they can drown out the trolls.
- External factors
External factors might be market fluctuations, new competitors, supply chain issues or changes in industry trends, none of which you have much control over – but they can have a sudden and lasting impact on how you do business.
Be vigilant in keeping up with what’s happening in your industry and adapt your strategies to suit your business before it starts to hurt your cash register. You don’t have to do all this on the fly; a proper risk and opportunities assessment will help you plot out some new pathways to take and allow you to plan in a less stressful environment.
What Steps Can You Take When Sales Drop?
It might feel like it’s the end of the road when sales drop, but it doesn’t have to be. As long as you take action, seek advice and be flexible enough to make some positive changes, there is no reason you can’t pull clear of your slump.
There are steps you can take to turn things around including;
Internal Action: Evaluate Your Business Process
When sales drop, it’s essential to evaluate your process to identify areas for improvement. For me, the increased costs showed some big flaws in my business processes and systems (or lack thereof). I couldn’t see this myself, I was young and this was my first time in the deep end. I got a mentor who was able to point out that if my business structures were strong, I could easily get around the tanking Aussie dollar and the crisis I was facing.
External Action: Listen to your Customers
If fewer customers are closing you need to be assessing why. What can you do to resolve their hesitation- and if you don’t know, just go out and ask them. It’s essential to address any issues or concerns that your customers may have to maintain a strong relationship and create strong sales patterns. Some strategies to consider include:
- Active listening: Give your customers the opportunity to voice their concerns, and listen carefully to their feedback. This will help you better understand their needs and preferences and make appropriate changes to your products or services.
- Efficient resolution: Aim to provide efficient and effective resolutions to their issues, ensuring that they feel supported and valued throughout their experience with your company.
- Follow-up communication: Stay in touch with customers after addressing their issues, letting them know you appreciate their feedback and are willing to make improvements to enhance their satisfaction.
Finding the Gap: Assess Your Competition
Examine the prices of your products or services in comparison to your competitors. Investigate new competitors entering the market, which might influence your customer purchasing behaviour. Remember, the ultimate goal is to provide value for money to your customers.
- Message and connection
- Ease of completion
- Value for money
Go to New Waters: Try something new
Find innovative ways to boost performance and adapt to the current market environment. This could be the best thing that’s ever happened to you. By embracing solutions and exploring unconventional methods, businesses can overcome challenges and come back better than before.
What can you do not just to bring your business up to speed if you are behind industry standard, but to get ahead and try what might be the next big thing?
- Fill an emerging need
- Satisfy customers currently in a gap
- Find new ways to add value to your current customers
You might need to refocus your marketing communication and check that the channels and language you are using are still effective in growing your audience.
Get Help: Talk to someone with business experience
It’s not always easy to see what’s happening inside your business because you’ve built it from the ground up. Knowing a better way to structure things or where to put your focus comes with experience and practice.
The fastest way to put things right is to ask someone with business experience and practice to take a look at things with you. They can guide you to the top, without the scratches and scrapes you’ll get navigating solo. You’re not alone in this, book a free ‘meet and greet’ so we can work out a plan to get you back on track.
What To Do When Sales Drop – FAQs
1. What is the first thing you do when sales are down?
When you notice a decline in sales, the first step is to analyse the situation. Identify potential reasons for the drop in sales, such as changes in market conditions, customer preferences, or internal issues. Gather data, review sales reports, and consult your team to pinpoint the root causes. This initial analysis provides a foundation for developing a strategic response.
2. How do you solve low sales?
Solving low sales involves a multi-faceted approach:
Market Research: Understand your target audience and market trends. Identify customer needs and preferences to tailor your products or services accordingly.
Reevaluate Strategy: Review your sales and marketing strategies. Consider adjusting pricing, promotions, or distribution channels to better align with market conditions.
Customer Engagement: Enhance customer engagement through excellent customer service and personalised experiences to build loyalty.
Sales Training: Invest in sales team training to improve their skills and product knowledge.
Product/Service Enhancement: Continuously improve your offerings based on customer feedback and market demands.
Marketing Campaigns: Launch targeted marketing campaigns to re-engage existing customers and attract new ones.
Cost Control: Assess and optimise operational costs to improve profit margins.
3. What to do if you are not getting sales?
If you are not generating sales, consider the following actions:
Analyse Your Target Audience: Ensure you are targeting the right audience who have a genuine interest in your product or service.
Marketing Efforts: Review your marketing campaigns. Are they reaching the intended audience effectively? Consider adjusting your marketing channels or messaging.
Website and Online Presence: Optimise your website and online presence to make it user-friendly and appealing to potential customers.
Sales Process: Streamline your sales process and ensure it is easy for customers to make a purchase.
Competitive Analysis: Study your competitors to identify areas where you can differentiate your offerings and gain a competitive edge.
Networking: Expand your network and build partnerships with other businesses to increase exposure.
4. What causes sales decline?
Sales decline can result from various factors, including:
Economic Factors: Economic downturns, recessions, or changes in consumer spending habits can lead to reduced sales.
Market Saturation: When the market is saturated with similar products or services, competition can lead to declining sales.
Product/Service Issues: Quality issues, outdated offerings, or a lack of innovation can cause customers to look elsewhere.
Poor Marketing: Ineffective marketing strategies, inadequate customer targeting, or messaging that doesn’t resonate can result in sales decline.
External Events: External factors like natural disasters, pandemic-related restrictions, or supply chain disruptions can impact sales.
Internal Factors: Poor management, lack of employee motivation, or operational inefficiencies can also contribute to declining sales.
5. How do I get my sales up?
To boost sales, you can take the following steps:
Customer Focus: Understand your customers’ needs and preferences, and tailor your products or services to meet them.
Marketing Improvement: Invest in effective marketing strategies, such as social media campaigns, SEO, email marketing, and content marketing.
Sales Team Training: Equip your sales team with the necessary skills and product knowledge to effectively close deals.
Customer Retention: Build loyalty by providing exceptional customer service, offering rewards, and maintaining ongoing communication with your customer base.
Diversification: Consider expanding your product or service offerings to attract new customer segments.
Feedback and Adaptation: Continuously gather customer feedback and adapt your strategies accordingly.
Pricing Strategy: Evaluate your pricing strategy and consider discounts, bundles, or value-added offerings.
Sales Promotions: Run sales promotions, special offers, and discounts to incentivize purchases.
Networking: Build relationships with potential partners, influencers, or collaborators to increase visibility and customer reach.
Innovation: Stay ahead of the competition by consistently innovating and improving your offerings.
What To Do When Sales Drop – Final Thoughts
It can be so frustrating when you feel like you are doing everything right, but you are just not seeing the results in the bank.
The early identification of declining sales and understanding its causes plays a crucial role in recovering your business’s revenue. This is where having solid business systems and KPIs is essential because you can pay attention to the metrics, analyse your current strategies, and make the necessary changes to get your sales back on track before things get out of hand.
No matter how far things have fallen there is time to recover. Take a step back and assess the situation, get the support you need to find the root cause and put action steps in play.
A great place to start is our free Facebook group, where like-minded business owners will be able to help and support you.