What to Do if You're Experiencing Stalled Sales

stalled sales

Have you Hit Stalled Sales?

When business growth starts to hit stalled sales, it often hard to pin point the reason. All business is cyclical.  Sometimes we grow quickly. Sometimes we grow more slowly. The key is to determine if the current state is a temporary blip or if it is a warning sign. That’s the tricky part. Even great businesses can hit a rough patch. So how do you determine if it’s blip or a trend?  

We’d like you to meet Louis.  We will try to answer that very question in his case study.

Louis' Story

“My business had been growing well. I’m very happy with how well we’ve grown, but lately, we started to slow down a bit. I’m not sure what to do about this. Is it’s just a temporary blip, or is it  a sign that we’re hitting a plateau?”

Louis runs a successful retail and e-commerce business. He’s business has grown well, but it has showing the first signs of slowing down. He’s not sure if this is an indication of something bigger. He fears that he has maxed out his current customer base, but he’s not sure. He’s questioning whether there is more room to grow his current base or into which market he should expand next.

At one point or another, all businesses face Louis’s challenge. It’s often helpful to go back to the fundamentals to what working and what could use a refresh.

 

How We Helped Louis beat Stalled Sales

The front of the tile describes the problem. Flip it to see the solution.

Looking Under the Hood

Few small business owners have time to optimize or to analyze their business fully. Many think, "I made a profit, so I’m okay." While this may be fine for now, eventually something unexpected happens. When it does, it's not immediately clear as to why. Is it a temporary blip or a sign of something more serious? We looked at 3 major areas: customers, staff, and spending

Reaching New Customers

First we looked at Louis's customer base to see why he may be experiencing stalled sales. Based on his slowing rate of growth, it appeared that he had hit a point of diminishing returns with his current target. Louis had done a great job of meeting the needs of the customers in his current niche. Unfortunately, he was starting to hit a point where there were few left to add. Consequently, growth slowed. He needed to look beyond his current base and broaden his appeal.

Acquisition Cost Kept Rising

Louis' advertising spending was becoming less effective. His repeat business was strong, but the cost of acquisition of new customers was rising. This was second indicator that he was hitting a plateau with this niche. He either needed something new to increase the purchases of his repeat business or consider expanding his niche to adjacent markets.

Finding New Customers

After looking at spending and speaking with customers, it became clear that Louis had to expand his base if he wanted to continue to grow. This is long-term process. It had to be done, but we also had to help Louis in the short-term. We needed both. So, for the short term, we looked to increase the average purchase per checkout through bundling like items as limited time offers. It was a good way to cross promote his line. In parallel, we recommended that we identify the right expansion market for us.

Where to Expand?

There are 4 typical ways to expand. The first is vertical markets, and this is what we recommended as our short-term strategy. The second is new geographical markets.Third is new products/services, which is self-explanatory. Finally, there is adjacent markets. For example, selling the same/similar bandages to consumers as you do to hospitals. So, which was right for Louis?

Going After Adjacent Markets

We talked about vertical, so we know that was the first step. Louis was an e-commerce based business. Therefore, geographical limitations were not significantly impacting his growth. Louis had a pretty good assortment of products. So, this wasn’t the first step we needed to take. Given he had a great product with demonstrated demand. We felt exploring adjacent markets would be our best long-term plan. This is a cheap or quick initiative. It needed to be carefully planned so that the expansion did not hurt his current base sales.

Louis' Revitalization Plan

We recommended the following 5 steps:

    1. First, secure funding for the investment required to make the necessary changes to the e-commerce storefront, website, etc.  Louis was in great shape, so an SBA loan was the obvious choice
    2. Use the funding to build the website and supply chain infrastructure
    3. Spend some money in market research to understand the emotional needs and drivers of the adjacent market
    4. Develop, test, and optimize our marketing message to the new target
    5. Launch the updated enhanced website and e-commerce store front

 

If you’re business isn’t quite like Louis’, please take the Business Assessment to be directed to a guide that is right for your business, or you can always contact us for help. We can help you beat stalled sales.