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10 Surprising Things That Explain a Decline in Sales and How to Resolve It

things that explain decline in sales

Sales play a pivotal role in any organization. This is what they call measurable success. Another important role of sales is connecting the customer’s needs to the products and services that a business offers.

Sluggish sales growth can put a company in hot water, with the worst case scenario being bankruptcy. Yet some business owners aren’t aware of why their company is failing. That's why it's important to understand every piece of the sales process.

Sales performance results from different factors in the business, like the marketing strategy, the product or service itself, the management, customer service, or the market.

All elements of the business must be perfectly in sync. However, no matter how hard you try to keep the business as smooth as possible to get great sales performance, there could still be overlooked issues having a direct impact on revenues. You may not even be aware of some of them.

Reasons Behind a Decline in Sales and How to Reverse It

Here are some easily overlooked reasons for low sales performance that can help you increase sale volume.

1. Not paying attention to the customer’s needs

Understanding customers and being aware of what they need is pivotal to the business’ success. Planning is useless if businesses lose touch with their customers and fail to identify what they really need.

Understanding the customer’s buying behavior, getting feedback and doing a sales growth trend analysis will get business owners some answers.
• Are they satisfied with your current products or services?
• Are they asking for more features? More benefits?
• Do they still love your products?

Finding out the answers to these questions will help you improve or change your marketing strategies.

2. Poor working conditions

One of the most important and sometimes overlooked factors is poor working conditions. Employees must be happy and comfortable in their working areas, otherwise it will hinder productivity which, in turn, impacts your sales performance.

An example would be providing recreational opportunities for employees. Toyota has worked to humanize their production environment since it was founded, as have many Fortune 500 companies such as Google.

3. The product or service has no Unique Value Proposition

There is an e-commerce site called “Pipcorn” where they sell mini-popcorn online. There are so many types of popcorn in the supermarket, some that you can even make at home. What makes Pipcorn’s popcorn so special that you have to order it online?

What sets them apart from other popcorn is that they are small and easier on your teeth and to your stomach. They also claim to be the freshest and the crispiest. They are so successful that they have full distribution across the United States with staff and their own factory.

These are things that set the company’s product apart from anyone else’s, essentially creating its value proposition.

4. Mismanagement or leadership failure

Business decisions should be in line with the vision of the company. One wrong decision could cause the business to spiral down and fail. A lot of business fail because of poor management.

Improper delegation, poor employee management, financial mishaps, unhealthy culture, not being receptive to change, not expecting the unexpected; these are just some examples of poor leadership.

5. Scaling when you’re not yet ready

Let’s say a business is doing great for two months. It’s gone better than expected and revenues have doubled over projections.

So, you hire more people and you get more merchandise. Then after six months people are no longer buying the product. It wasn't ready to scale to that level just yet. You only scale when you’re ready.

when to scale sales growth

6. Marketing and sales are not aligned

Sales and marketing should collaborate on every move, otherwise it affects sales.

Sales depend on marketing efforts and strategies. A solid marketing strategy that focuses on monthly targets and qualified leads helps to drive sales.

7. No organic web traffic to support sales

The company's digital presence plays a huge role in the modern age of doing business. Web traffic can supply a steady stream of leads or potential customers.

For example, if the business has no social media account and most of their customers are to be found there, how will people know they exist? Understand where to get unique, organic traffic that is built on relationships so that you can move those relationships into sales.

8. Not paying attention to the competitors

Your competitor might have just launched a new product with great features that tops all current competitors, yet you had no idea this was happening.

You need to know how your competitor moves at all times so that you can take immediate action and develop strategies that can keep your business competitive in the marketplace.

9. Poorly trained staff

Resources and training should ensure the staff’s competency and effectiveness. For example, customer service representatives without adequate training won‘t be able to communicate with the customers properly.

Allow time and resources for proper training in all areas of your business.

10. Disregarding customer loyalty

Customers who always patronize the business should be treated well. Customer relationships should be of the utmost importance. One unsatisfied customer could have a detrimental effect on the company, especially if that customer takes it out on social media.

Offer loyalty cards or discount coupons for regular customers to know they are valued.

Final Thoughts on Declining Sales

Sales volume that’s trending down is a warning flag that something isn’t quite right.

Evaluate each of the mentioned points in your business and see where you might be costing yourself sales. Make this part of your monthly sales checkup.

Jen-McKenzieOur guest author Jen McKenzie is an independent business consultant from New York. She writes extensively on business, education and human resource topics. When Jennifer is not at her desk working, you can usually find her hiking or taking a road trip with her two dogs. You can reach Jennifer on Twitter @jenmcknzie or LinkedIn.