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What Is Causing Your Sales Problem?

If your business is finding it tough to win enough sales volume to give you the profit level you want, you may be trying to solve it the wrong way.

To get the best improvement in results, you need to tackle the right problem in the most effective way. Sometimes, business owners can make faulty diagnoses of the underlying issue and this happens particularly when the business owner is under too much pressure.

If you don’t focus your time and attention on the key constraint or bottleneck, you’re likely to get disappointing results. (see The Theory Of Constraints For Small Businesses)

This diagnose the problem to prescribe the right solution is a similar process to your doctor uses to make sure that his prescribed treatment is tackling the most likely cause. For example, there are many different reasons for a patient having a headache – from eye strain to general tension to too much alcohol… all the way through in severity to a brain tumour or a fractured skull.

Sales being too low is a symptom but, without looking in detail, it’s not clear what the underlying problem is and therefore it’s not clear

What Causes A Business To Have A Sales Problem?

First let’s see the way it should work:

  1. There are plenty of people who want what we sell.
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  2. We create an attractive offer with at least as much value for money as our main competitors in terms of the quality of the product, its availability on short lead times and it’s available at a reasonable price. This offer is unique in some way that is important to some customers.
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  3. We word the offer in a way that makes it easily understood, compelling and believable.
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  4. We get that offer in front of our potential customers in ways that attracts their attention and we do it regularly enough to overcome the customer inertia that comes from them having busy lives with many different problems to solve. We understand that different customers will prefer different marketing media and indeed will only see and/or hear messages in particular media.
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  5. When the potential customer makes an enquiry as a result of seeing our marketing, we follow it up effectively. This includes recognises that some leads are in different stages of the buying cycle.
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  6. We follow up effectively and regularly so that, when the customer is ready to buy, we are top of their minds.
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  7. We make sure that we understand the customer’s full requirements so that we can supply everything they need. We avoid the “no batteries for the Christmas present” problem.
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  8. We meet all the promises we make during the selling stage and the delivery stage so that the customer gets excellent and consistent service.
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  9. The product or service delivers on the benefits we promised so that, when the customer needs to buy again, we are the obvious, no-risk source.
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  10. When the customer is happy, we ask for a testimonial and referrals to anyone else the customer knows with the same problem or issue to solve.

When you look at your own marketing, selling and customer service processes like this, you can see that there are plenty of different ways for it to break down.

Someone else has used the analogy of a leaky bucket. Where is the biggest leak in your bucket or is too little going into in the first place?

More simply, in numbers terms:

  • You can get too few leads.
  • You can convert too small a percentage of leads into orders.
  • Too many customers who buy from you once don’t come back and buy again and again.
  • Too few customers give you referrals

Often the most expensive part of the process is getting new leads. Experts have said that it can cost seven times more to sell to a new customer than it costs to sell to an existing customer, which is why it’s key to get regular buyers. Personally I think that seven times is an underestimate for many businesses where supply almost goes on automatic pilot when they are satisfied.

For example, think of your accountancy firm. You probably went through a selection process at the beginning but, since then, they’ve done your accounts and taxes every year without you having to make the conscious decision of who to buy from again. Your accountant has next to no marketing expenses to keep you as a client.

If you’re short of sales, the solution may be:

  1. You might need a clearer strategy – you need to be much clearer about the niche market you can serve best and target and you need to have an offer that differentiates your product/service/business from your competitors and helps to protect you against pressure to lower your prices.
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  2. You might need more marketing – you might have a strong marketing message but you’re not getting it in front of enough potential customers often enough.
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  3. You might need better marketing and copywriting – people in your target market may be exposed to enough of your marketing but they don’t give it any attention because it doesn’t look relevant to them or perhaps it doesn’t have a strong enough call to action to get a response.
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  4. Your pricing may be wrong – pricing that is too high or too low can put customers off from contacting you. If the price looks too high, perhaps because you haven’t communicated the extra value you provide, they will go to cheaper competitors. If your price looks too low, they may have fears about quality.
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  5. You may not deal effectively with the leads that come in. At various times, I’ve seen statistics for companies failing to respond to enquiries that have been alarming.
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  6. You might not effectively qualify your leads. This means that you’re wasting time and money on people who are unlikely to become good customers and, as a result, you’re too rushed with those high quality leads you really want.
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  7. You might not recognise the difference between prospective customers who are ready to buy and those who are getting ready to buy. This will mean that your actions won’t be appropriate to move the relationships along in the best ways. This may mean you don’t nurture the people who aren’t ready to buy yet or you may avoid asking for the order from people who are ready to buy.
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  8. You might not be able to meet the delivery requirements of the customer because stock/inventory levels are unbalanced and lead times are too long.
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  9. Your product or service might not be considered good enough. The Internet has made much more information available on websites like TripAdvisor, TrustPilot and Amazon.
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  10. If you get the order, you might break your promise by delivering the wrong items, broken items or late. Even worse, your customer complaints process may be poor.
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  11. Your business model and processes may not be adapted well enough to get repeat business. Do you create “automatic” customers? Do you sell products that customers might need after they buy the first item? Do you have a process of keeping in contact with past customers?

That’s not an exhaustive list but it does show that the automatic solution to the problem isn’t a better website or more advertisements in the local newspaper or sales training.

It may go much deeper.

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