Dropping sales is not a dream for most business leaders. But because the market is in such constant flux, it is not a matter of whether you will see a decline or not, but when. If you notice that your numbers are starting to drop, you can often find yourself out relatively quickly by answering two simple questions.
How big is the problem (really)?
There is a big difference between a 5% drop in sales and a 50% drop. And likewise, the problems of a small campaign running in just a few places may not break the bank as much as you’re pouring everywhere on every channel. If the slowdown is minor, you may not need to take any action. But if it’s going to have a big impact, it needs to do something different. So your first step is to determine how big the hole really is in your boat.
What determines whether a recession is minor or major depends on a number of factors, such as your past performance, the cash reserves you have and your personal risk tolerance. But where your company has no return as your reference point, recovery may be possible, along with analyzing the bigger picture of your business’s capital resources and its current cash flow.
What is really sinking the ship?
If you notice a small crack in the side of your boat while there’s a big hole in the bottom, you’re not going to do your business very well. To get your numbers back, you’ll need to make sure you’ve identified the true root cause of the decline.
Sales can drop for all kinds of reasons, including poor training, a lack of adequate product knowledge or a toxic culture that makes honest communication difficult. But I think one of the most common problems is misreports from company salespeople. For example, they might say that their pipeline is about 50%. After doing some digging and looking at actual sales, you can see that not only are their sales numbers still down, but further analysis may reveal that, based on their past sales, the Pipeline report shows that They are getting only 10% completion rate.
Does it reflect intentional dishonesty and the lies of your employees? Not necessary. A more likely scenario could be that your team has been trained to be optimistic. That’s a good thing in a way—if they didn’t have that optimism, they wouldn’t have stopped hearing “no” day in and day out. So it could be that his optimism is misinterpreting any “maybe” as a “yes”.
Another common issue is the need for better lead generation. For example, one thing we noticed in our team was that live events weren’t drawing the kind of people we needed. We struggled to find out who they really were because they would hand us their business card, which didn’t really tell us much about them. So, we went to a more digital format. That we get more information when they are registered. It also makes more sense in how people operate today. They usually don’t want to talk to a seller right away. They want to connect with salespeople whenever they are ready.
If this is your problem, try creating a lead scoring strategy where different activities (for example, opening an email, visiting a certain page on your website) give different points to the customer. Based on that system, you can get a better understanding of the exact moment when the customer is ready to talk to you.
Additionally, see where you stand competitively. As an example, early in my career, we offered a product that was really hot. But it was not as good as the competition was doing. The cost to investors/customers was too high, and marketing was not done well. So we partnered with an author who wrote a book on the subject. We created an additional supplemental audiobook explaining how to sell the product, package it with the book, and then give it to prospects. Since we were at the forefront of the product, we also adjusted our pricing to match our competitors.
Finally, do some buyer interviews. Everyone brings bias to the business table, and it’s a really common mistake to leave your personal impression of what buyers want from what you do. Interviews allow you to verify your assumptions and receive direct feedback from customers. We used this strategy with our website. We went across the country, asked people what they wanted in a site and then adjusted accordingly.
Recession will come, so be ready
There is no business in the world that doesn’t see their sales going down at some point, even if the decline is a slight discrepancy in their overall trends. But finding out the severity of the fall and doing an objective analysis to find out the root cause can get you back on track. Address the problem as soon as possible to make sure the damage isn’t worse than necessary.