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Diagnosing and Correcting a Sales Downturn

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Diagnosing and Correcting a Sales Downturn

“Sales aren’t here; this was the third billing month we didn’t hit our goal; looking ahead, we could have a fourth month where we might not hit our goal. Is it just me, or is anyone else feeling a softening? And who cares what everyone else if feeling, I still need to do more sales to stay afloat. Suggestions?”

Thoughts of the Day: There are times when the economy turns sour, just when it looked like it was supposed to turn up. Use data to figure out what’s going on.
Pick two or three top priorities to focus on. Consider the results and risks of doing an acquisition.

Look at everything, in an organized fashion. Figure out exactly how much additional sales you need to bring in. How short of goal are you?


Now start to take the problem apart. Is the problem that you had huge growth a year ago and now you’re trying to digest it? In that case you might want to sit still, maintaining at last year’s number if you can, buying the company time to catch up with the growth in sales.

Have sales been flat or trending down for a couple years? That’s a warning sign. Push hard on the sales and marketing accelerator and turn things around as quickly as possible. 10% – 15% growth year over year is probably a manageable growth rate, anything over 30% and you’ll want to be cautious. High growth rates have long lasting problems and are difficult to replicate year over year, all while staying profitable.

Where is the problem coming from:

  • Sales or delivery?
  • Are clients getting what they want, or are they frustrated or dissatisfied and going elsewhere?
  • Do you have plenty of clients, or not enough repeat orders?
  • When’s the last time you got a flurry of new clients to refresh the pool?

How are your sales people doing:

  • Is everyone down or are just some of them off?
  • Which areas of the country are down?
  • Did some products suddenly stop selling, while others are slowly gaining traction?

Keep your sales team motivated to work harder.

Give them short wins – things they can accomplish in a week or a few weeks. Don’t bemoan that things are terrible, it only makes believers of everyone. Instead focus on the bright spots and encourage your sales people to do the same.

Look for things that can generate profits quickly. Getting a couple good sales will boost everyone’s confidence. Look boost gross profit, to make up for shortfalls in sales. This will stand you in good stead when sales activity picks up as well.

Black swans like extreme weather, or waves of the flu can be big disrupters. And it may feel like there’s no way to control that. What you still do have under your control is the ability to act proactively to rebuild your company’s sales.

Whatever you do, don’t cut the marketing budget.

When sales are down, you should be spending more on marketing to fuel the pipeline.

Set up meetings with your top customers and see what additional needs they have that your company can fill. Look for decision makers in other parts of the company that might also need what you offer. Ask current and past clients for referrals outside of their company.

Sometimes the fastest way to fix a problem is to buy a solution. Consider an acquisition. You may want to buy a complimentary business, rather than an exact duplicate, in order to open up more opportunities. Hire a broker to help you cover ground faster. Run the numbers on how much you’ll make with the additional revenue; you may be surprised at how quickly the right acquisition can pay for itself.

Looking for a good book?

Try “Professional Services Marketing Wisdom: How to Attract, Influence and Acquire Customers Even if You Hate Selling“, by Ric Wilmot.


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