In the midst of a pandemic, it’s easy to pin the problem of why sales have dropped on distancing restrictions, businesses shutting and a lack of consumer spending.
And while re-evaluating sales targets or implementing discounts might be a quick solution, it isn’t always the only, or even necessarily, the right one.
Plenty of businesses have closed and the pandemic is a problem for most industries — but at the same time, new business applications are up by 19%. Over 50% of startups have actually been found to be thriving. The number of bankruptcies aren’t actually as devastating as you might think.
Not all opportunities are doomed, so be careful in being too quick to chalk why sales have dropped to a lack of consumer spending — before taking a closer look at the problem.
The majority of my work lately has been working with businesses to identify the reason for why sales have dropped, and the appropriate solution to remedy this. If you’re just starting this process, you’ll want to consult some of the most knowledgeable and experienced people in the company: your sales team.
Pinpoint the reasons this problem has come about (yes COVID, but get specific)
It’s easy to try and diagnose a problem from a distance, but often ineffective. Your salespeople are the middle man between your company and customers. They’re speaking to the customers, and they’re listening to and speaking FOR the customers.
Combatting a drop in sales by cutting costs and offering discounts is a short-term and tricky solution. As we saw with fashion retailers in the 2008 recession, what starts as temporary discounts becomes a challenge to rise back up to full price, and long-term loss.
Instead, use your sales team to speak to your customers and get to the root of the problem: how have their needs changed? Essentially, you’re conducting market research to pinpoint why sales have dropped.
Taking this outward view provides a valuable opportunity to find out what your customers are looking for from you as an organization. If demand for you product has gone down, there are two likely answers you might get:
- There is no longer demand at this time for your product or service. It may be temporarily redundant as your customers’ needs change with the situation.
- Your price point is too high at this stage with economic pressure – or competitors have entered your market and are able to offer a lower price.
Compare your findings with your current strategy. What is your sales team focusing on? Are they trying to sell the same products in a new climate? Who is your demographic? Has it changed, and how are you reaching them?
Part two of this blog series will come out next week, and help identify and implement solutions to this problem. Stay tuned!