(Last Updated On: April 21, 2019)

Image with downward arrow showing poor sales performance

 

My grandmother often warned: “To everything there’s a season…” Apparently, this also includes poor sales in your business.

 

At the moment, in my country, we are going through a serious contraction in the economy. Therefore, unparalleled poor sales performance is a reality for many businesses…including mine. How you diagnose and address it is key to your survival.

 

So how are you coping with it?

 

Unfortunately for most small businesses…not very well.

 

I am watching small business owners, especially in the retail sector, cut back on key spending, especially on training and marketing.

 

I am watching you lay off or let go staff, try new unrelated products, reduce or increase prices and the list goes on.

 

And worse of all, I am watching you throw established practices and procedure right out the door in favor of unbelievable chaos and on-the-fly firefighting tactics. Sigh...

 

Do I want you to sit and do nothing but watch your blood, sweat and tears go gradually down the drain? Certainly not!

 

But I do want you to try to get to the bottom of your poor sales performance BEFORE you do any of the other things.

 

I want you to slow down and take a measured approach rather than an uptight, knee-jerk reaction.

 

And I want to help you…

 

So, here’s a template with  some basic steps you can use to diagnose the cause of your poor sales problem, and perhaps it will help you find your own workable solutions in the process.

 

 1. Look inside your business

Begin the diagnosis of your problem by collecting information from inside your business. Look at your people, products, procedures and even the way you do business.

 

In this process, there are 2 categories of people you must talk to.

 

  1. Talk to your employees

Usually, your employees are closer to the customers than you, the business owner. And they often have more insight into issues than you give them credit for.

 

Ask them about any changes they have been noticing in customers behaviour e.g. more complaints. Encourage them to tell you about any changes in customer buying patterns, especially those that might be responsible for poor sales.

 

You also need to find out if your employees are still enjoying a high level of job satisfaction. Unhappy employees will be hard-pressed to deliver fabulous customer service.

 

In reality, you are trying to find out if your workers are still effective and if your operations are still efficient.

 

You should use any established processes to collect this information, such as staff meetings, regular briefings, etc. Or you can organise a special brainstorming session.

 

  1. Talk to your Customers

Once you’ve talked to your employees, now it’s time to talk to your customers – the people who might be responsible for your poor sales.

 

If you have a customer database, a survey might be a good way to do this.

 

Whatever method you use, the objective is to find out from them what exactly are the circumstances which led them to reduce their level of purchases from your business.

 

It is easy to believe that as long as the economy is in recession you will be a victim of poor sales. This is not always the case, so the best thing to do is to ask your customers.

 

One great way to get them to participate in your survey is to offer certain incentives or rewards for the time they took to respond to the questionnaire.

 

Remember that the survey is not about you,  it’s about your customers.

 

So, be sure to highlight the key areas that are of importance to them. These include areas such as product/service utility, customer service, order-to-delivery time, price, quality, packaging, communication and so on.

 

  1. Review products, procedures, etc

As part of your inside look, don’t forget your products and the way you do business. Ask your staff and customers for feedback here. You want to know:

 If your product offering is what your customers want

If your prices still represent the ideal combination of value for money

 What other products/services you can offer

Are your opening hours still meaningful?

Are your marketing approaches working?

How user-friendly is your website and instore shopping

Are your employees still offering great customer service

How does your response rate to customer queries compare to the competition

What variety can you add to existing products

How accurate are your product descriptions

How bored are your customers

 

2. Look outside your business

 When you have analysed the key areas of your business, now it’s time to examine your wider business environment. You need to do 2 things here – scan the environment and examine what’s happening in your niche.

 

  1. Scan the environment

When you scan the environment, you are looking for a general trend or changes that are affecting all small businesses regardless of the industry or niche they are operating in.

 

The issues you are checking for could include economic, cultural, religious, political, infrastructural, natural disaster and other major changes in the society that can potentially affect your business.

 

For example, in my country, Barbados, we have just implemented a series of taxes which are sure to lead to a general rise in prices and a reduction in the buying power of all customers.

 

2. Examine your industry or niche

 The 2nd strategic step, after your environmental scan, is to find out what is happening in your industry or niche.

 

This is known as competitive analysis. What you’re trying to discover is whether you are the only one experiencing poor sales or if all other businesses are as well.

 

Consequently, you are looking for answers to questions like:

How many new entrants have entered the market in a key period?

Are you up-to-date about current market and industry trends?

What are your competitors doing that you aren’t?

Why are they doing what they are doing?

Does your business have any competitive edge compared to other businesses in your industry or niche?

Is your perceived competitive edge still relevant?

Any other question that is relevant to your business…

 

Remember, you’re not doing this competitive analysis because you want to blindly copy what your competitors are doing.

 

You want to find out why and how what they are doing relate to the poor sales performance you are experiencing.

 

So, link all your findings back to your problem. Constantly ask the question: “how is this finding relevant to why there is a fall in customers supporting my business?

 

If you get this part right, then you will come to the appropriate conclusions that will lead to a clear identification of the reasons for your low sales.

 

Following this, you will be able to come up with relevant solutions and clear steps to implement them.

 

 Now it’s time to go deep

Now that you’ve collected your information, it’s time to take a really good look at it.

 

This is when you bring your team together to take a good look at the information. Trust your staff and really value their insights and inputs.

 

Be sure to include any outside consultants you may have used to help you collect the information.

 

This is the time to really breakdown the numbers behind your poor sales and take a closer look at them.

 

Check to see if you’re making the best use of your cash flow and become familiar with the key retail terms and how understanding the can help with your recovery.

 

By now you should have identified a combination of problems, which you want to prioritize for solving.

 

Start simple when implementing your solutions

Once you’ve identified some possible problems, brainstorm some potential solutions.

 

It is at this time that most small business owners rush off and start being a lone ranger. You don’t want to do that. This is the best time to strengthen bonds with your team, and in your team.

 

Whenever possible, implement the simplest solutions first before moving on to the more complex ones. This allows you to pick some low-hanging fruit and create some drive and motivation in the team.

 

As you go about implementing your solution, keep checking to make sure that you’re getting results.

 

Now it’s over to you…

So I’ve really done a bit of heavy lifting for you in helping you to diagnose what might be responsible for your unbelievable poor sales. I’ve linked you to other articles to take you even deeper into solving the problem.

 

Now it’s really over to you…

 

Let me remind you not to take any rash, panicked-driven decisions. You may be experiencing some seasonal issues or market forces that simply need to self-correct, therefore the best course of action is informed inaction.

 

So follow the steps above first, but be prepared to take any serious decisions you may have to…

How to Get to The Bottom of Poor Sales Performance

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