Why do businesses fail to grow? Why do sales go into slumps, or never take off at all? Owning a business with insufficient sales can be a frustrating, frightening experience. Without adequate revenue, it’s only a matter of time before it shrivels up and croaks. The good news is that ugly sales numbers don’t have to be a terminal condition. There’s a reason for them, and there are ways to address them.
It may require facing some uncomfortable truths. It will require making some changes. But you don’t have to go down without a fight. By identifying the problem, you can save your business before it’s too late. The following are 5 of the most common reasons we fail to sell, and what you can do about them.
Reason 1: Selling isn’t a priority.
Impossible, you might say. Of course, sales are a priority. Of course, you’re trying to sell— isn’t every business owner? However, many business owners are either uncomfortable with selling, or simply don’t know how to. They think that with a little marketing and a little advertising, a great product will sell itself. They don’t want to be pushy. They think a passive approach will work.
I’d say that If you think you’re “selling” enough, you’re probably not. Almost every successful business prioritizes sales. This doesn’t mean they’re going to door-to-door every day, asking people to consider their yoga class or SaaS. It means they’re doing something that will increase sales every single week. They’re hosting a webinar. They’re doing an email promotion. Whatever it is, they’re not letting much time go by without actively chasing sales.
Some small business advocates preach that if you just “do what you love,” the sales will come. I’ve gotta call nonsense on that. Sales don’t come, they’re pursued. You have to sell, actively and constantly. It doesn’t mean turning yourself into some slick stereotype. It just means making a conscious effort. It’s about hustle, not hassle. You can’t be afraid to ask for the sale, day in and day out.
When a business owner with weak sales comes to me for advice, the first thing I ask is how many times in the last month they’ve had some kind of sales event. Usually, the answer is 0. It’s not enough to simply put the product out there. Look at Macy’s: they have a 1-day sale every week. It might seem silly, but it gives people a reason to show up. John Lee Dumas of Podcaster’s Paradise hosts a webinar every week for the same reason.
Set a goal to do some kind of sales promotion every week. It can be as simple as a coupon code at the end of a blog post. Whatever it is, give people a special reason to buy.
Reason 2: Opaque Pricing
Few things kill sales like a confusing price structure. While it isn’t always easy to determine exactly what the customer will have to spend, it’s important to make it as simple as possible. This is because people, like businesses, need to plan their budgets. A convoluted system might make sense to you. It might even be your way of trying to help the customer spend only what they need to. But if it’s too complex, it’s guaranteed to scare people off.
Especially when you’re selling a service, you’ve got to have clear, simple package prices. Hourly rates for things like graphic or web design are particular problems, because neither you nor the customer know how long a given project is going to take. Whatever you charge, make it as easy as possible for the customer to predict how much they’ll ultimately spend.
Charge for the result, rather than trying to charge for the exact time and resources you’re using. Set your prices from the customer’s perspective— all they want to know is what the result will cost them.
Reason 3: Burned by the churn
Churn, if you don’t know the term, describes the rate at which customers cancel their service or get refunds. It’s an especially dangerous business-killer, because it’s sneaky. It makes your sales stats unreliable indicators, because the money you’ve “made” gets un-made. That’s why it’s vital to track this metric. We use baremetrics for our analytics, which includes churn rates.
If your churn rate turns out to be significant, do whatever it takes to stop the bleeding. Find out what’s causing customers who were initially sold to change their minds. Give your customers a good reason to stick around. Improve support, improve communication; improve whatever you have to in order to keep the business you’ve earned.
Reason 4: You’re spending too much
Like the churn problem, in this case the sales numbers can look deceptively good. But in reality, you’re not actually generating revenue. As I always preach, the most important statistic for any business is profitability. If what you’re spending to produce each unit is too close to (or heaven forbid, more than) its price, you’re spinning your wheels.
I had this problem when I ran a clothing line. My sales were great. Clothes were flying off the shelves. However, no matter how much I sold, I was never really making money. What it cost to produce each item was around 90% of the price. With soft products, it’s even trickier. You’ve got to factor in costs like hosting and third-party apps on which your product depends. You’ve got to track your costs honestly and thoroughly, leaving nothing out of the equation— including whatever you’re paying yourself.
Reason 5: You Ain’t Write Good
Finally, invest time in improving your sales copy. The words you use in ads, emails, blogs, and webinars are at the heart of your salesmanship. For help with that, I recommend reading This Book Will Teach You How To Write Better by Neville Medhora. It’s very short (100 pages), but it’s a fantastic primer on articulating yourself in a way that moves product. With the right messaging, you can reach customers who would otherwise ignore you.
When sales aren’t happening, it’s a horrible feeling. The end of your business isn’t around the corner, but you know it’s down the road. The cure is to stay in sales mode. Ask for the sale in every way possible, as often as possible. Offer value, prove yourself to the customers, and entice them with offers that make sense. Chase the sales, and orient your business practices around them.